One of the most common things most young, new homeowners forget to account for is the money they’ll need to spend after they’ve already spent all their money buying a house. Once you’ve made your down payment, you’ll need to set aside a budget for closing your mortgage, which can cost between 2% and 5% of the total loan amount.
One of the first steps you’ll want to take is to do a little shopping around before you make your purchase. You can compare prices of homeowners insurance and inspections, title searches and other closing expenses, as available through different providers.
Preparing to buy your first home doesn’t stop there, however. Once you’ve settled up the down payment amount and factored in your closing costs, you’ll also want to set aside funding to pay for what will actually be inside of your house. Furniture, appliances, furnishings and decor, replacement fixtures and new paint are all pretty common issues and you don’t want to be caught out by them.
Not Planning For Future Needs
Another common pitfall for many new home buyers is buying the home they need right now out of necessity when they should be thinking about what they’re going to need.
It’s easy to understand: a house is a big investment. The process can be intimidating, and you could get caught up in just trying to “get everything right” right now. But, should you plan to grow your family, buying a larger home now will give you the space you need to expand later.
Ask yourself some real questions about your future in the next five years, and then ask whether your house is going to be as appropriate later as it seems now.
Negotiating a price is a tricky issue because, for most people, it’s too awkward an experience to warrant trying it. What if you embarrass yourself? What if they see through you and it makes the situation worse?
The truth is, negotiation is much simpler than most people think, and the stakes much lower. Instead of a lower price altogether, examine the house beforehand and pitch smaller concessions to the person selling it to you. Major repairs you don’t feel like handling yourself.
Closing costs which you’d be happy to cover, but which would also be so much easier if someone else chipped in, are another consideration.
Negotiations are part of the process and, if you voluntarily give up your right to bargain, you’re missing out on a massive opportunity. Not knowing what your house is really worth is a luxury for the superrich or vastly irresponsible.
What Not To Do When Buying A Home First Time
Buying a home first time is a learning experience, there’s no denying it. Still, with a little preparation and the right kinds of insights into the process, you don’t have to go into this purchase blind.