Everything First-Time Home Buyers Need to Know About House Hunting
They make it look easy on TV. House hunters look at two or three houses, have a five-minute chat, and pick a favorite. Done deal. Hooray! In real life, the hunt for the perfect home rarely fits into a single television episode.
Ready to get started? These are the things you should consider before you go house shopping.
Pick a neighborhood or two. Or three or four.
Your real estate agent will need to start somewhere. If you've been living in the place where you're house hunting, you likely have some idea of which parts of town you enjoy, and you probably want to be near friends. If you're relocating, do a little research into the neighborhoods in your new town before you decide. Figure out what you want in a neighborhood. Do you want to be close to your job? Do you need sidewalks and a coffee shop you can walk to? Which neighborhoods have the kind of house you're drawn to?
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Figure out what you can afford as a first-time home buyer
This is a great time to take stock of your finances. Do you know your credit score? Is your salary likely to stay the same or will you probably be making more a few years from now? What kind of debt are you carrying? Talk to a mortgage broker before you start looking so you know what you can and can't have. And remember that getting approved for a large mortgage doesn't mean you should take all the money. Take a good luck at your budget and see how a mortgage payment will fit into it.
Be realistic about how much space you need
If you're living with someone else, or if you have overnight guests often, how much privacy do you need? Do you have any hobbies that take up a lot of space? Do you own a pool table? Do you mind storing out of season clothes in the guest room or do you need a closet big enough to hold it all? You may need more or less space than you assumed.
Do you plan on raising a family in this home or will it just be you? No one expects you to say exactly how many children you want and when -- and don't even try, because advice columns are full of questions from people who made definitive statements about that, changed their minds, and are married to someone who wants to stick to the original plan. Do you need a five bedroom house for a family of three or would you be more comfortable in something smaller? And we're not arguing with you: If you love to have houseguests, or if it looks like an elderly parent may have to move in with you sooner rather than later, you need more room.
What do you really want and what are your dealbreakers?
If you have a pet, you may really need a yard where your dog can exercise. Or a home office may be essential if you have kids and need peace and quiet to work at home. For some people, an eat-in kitchen is a big deal. For others, not so much. Will you be miserable if you can't walk to a few local restaurants? Now's the time to be honest with yourself and make a list.
How long will you stay in your first house?
If you're only staying for a few years an adjustable rate mortgage (ARM) might save you some money. On the other hand, if you can't commit to staying in the house for a while, you might want to consider if it's really worth it. What happens if you relocate in a few years and can't sell? Will you rent in the new place while you lease out your old place or can you afford to maintain two houses?
You may also want to consider how your house can grow with you if you plan on staying for a while. If you love your dog and plan on getting a second or third, make sure there's enough room. And if you love the neighborhood "for now," make sure you can live with it later.
House hunting can be daunting but fun. And the results can be thrilling. Knowing what you want and can afford before you buy can save a lot of time and money, so spend some time preparing and you'll enjoy finding your new home.