We’re not going to sugar coat it - buying your first home can be terrifying. With a billion things to keep in mind plus a ton of new details and processes that you’ve never even thought about prior, approaching such a massive milestone in your life without a game plan is risky, to say the least.

Here are a few things to keep in mind to help you purchase your ideal home or piece of property with confidence.

Buy a Home at the Right Time

Repeat after us: Do not buy a home based on emotion only. Do consider the market just as much as your own headspace. Do not just buy a house because you are getting low mortgage rates. Do buy a home when you have a contingency set aside of at least 10%. Do buy a home when you have a plan as to how to afford the property financially for years to come, and not just the next few months. Do buy a home only after you understand the different options available to you, and not after the first house you see that you love. Do keep an open mind. There are a lot of incredible opportunities out there on the market with the right out-of-the-box thinking!

Another thing to keep in mind when it comes to both property values and getting a good deal is to keep your eye out for more long term market trends and not just what it’s doing at the moment.

Research and Prepare Before you Begin the Home Buying Process

Start preparing yourself to buy a house long before you’re ready to pull the trigger. Study and preparation can easily make the difference between successful and unsuccessful home buyers. There are numerous resources online on specific topics regarding real estate, which you can find informative and helpful before you make a purchase.

Additionally, make sure to review your financial position and make necessary preparations. Start saving early in advance for a down payment and don’t forget about other expenses you may have to incur before you start house hunting, such as closing fees, home inspections, etc.

By saving and planning early, you will protect yourself from last-minute scrambling to meet the required amount to purchase a house.

Review Your Credit History and Score

Mortgage lenders rely on a credit report that highlights how you borrow and pay back your loans to determine if you are creditworthy and if you will pay back the mortgage. Your credit history and score is what will help you secure a financier and what will help you get the right loan.

The better your credit score is, the better the interest rates you will get. Therefore, if you have a low credit score, look for ways to improve it so that you can secure a mortgage with a manageable interest rate. The best place to start is with reducing your debt, as well as making sure all bills are paid on time. Also, a full credit history will help you find blemishes on your score and potentially remove them.

Find a Local Realtor

Most houses in the market have a listing agent that works to protect the interests of the seller. It is a good option as well to find a real estate agent that will protect your interests.

One thing a lot of people don’t know is that using a real estate agent will be free since it is the seller that pays the agent commission. Nevertheless, keep in mind who you are hiring, as they are also pocketing a healthy interest on one of your biggest transactions ever.

A local real estate agent can help you understand the benefits of different neighborhoods, types of houses, as well as what red flags to avoid. A good realtor should be able to quickly identify problems with a home, allowing you to execute your home search even faster.

They can additionally advise you on the best places to secure financing, as well as the best mortgage to go with. A professional real estate agent should make the entire house purchasing process relatively simple.

Get a Mortgage Preapproval from a Local Mortgage Lender

First things first, consider getting your mortgage from a local lender since they have a better understanding of the local real estate market. Before you’re ready to make an offer, it’s incredibly beneficial to acquire a mortgage preapproval ahead of the search process. Not only will it give you a realistic sense of what your price range is (and what your max is), but it will help you put in an offer more quickly, which will give you a high advantage against other buyers.

Once you get preapproved for a loan, you can search for houses that are within a range you can afford. Just keep in mind the budget of any home improvement you will need to do before moving in.

And while there are definitely exceptions to this rule, it is a general rule of thumb to purchase a house whose mortgage is two times your gross income. But again, don’t forget to include expenses such as property taxes, contingency costs, potential HOAs, and other day-to-day costs like utilities in your calculations to determine how much you can afford. You can use the best housing loan calculator to determine the amount you prequalify.

Searching for the Right Property

What kind of property are you looking to own? Are you a fan of an old neighborhood, or do you like only new builds?

An already existing home may have a traditional charm and established neighborhoods. However, they may also be a financial burden, requiring numerous repairs and makeovers.

As well, the location of a house is crucial for several reasons. How close is it to amenities such as good schools, shopping centers, and healthcare facilities? Is it in an area that will maintain home value throughout the years? What are the projections for the area in the next 5-10 years?

You might also want to think about whether you plan to buy in a rural area. If you are purchasing a home in a rural location, there are other key considerations. For instance, you might need to make special allowances for energy choices. It could be necessary to find a propane and heating oil delivery service if the area doesn’t have the right set up for electric heating.

Make a Home Offer

Of course, before buying a new home, plan to sell your home first to avoid having to pay two mortgages. This can also help you understand what kind of down payment you will have, and what mortgage you can afford.

One of the biggest mistakes you can make is not sticking to your budget - and trust us, when you see a ton of gorgeous homes with all the amenities you want, it’s easy for your original budget number to start creeping up. Taking the emotion out of making an offer is probably the best piece of advice we could possibly offer. It’s fine to get excited and fantasize when you walk through the home, but if you crunch the numbers and they don’t make sense, walk away.

Once making an offer, you’ll obviously want to pay the lowest amount possible, but high enough so that the seller is willing to accept the offer. An offer that is too low could also potentially offend the buyer, which can hurt your chances of closing. Another little tip is to write the seller a personal letter. Often if there is more than on the table, a little personalization can go a long way.

Inspect the Property

Once the seller is satisfied with your offer, you should immediately conduct a home inspection. A home inspection will get you unbiased documentation of the conditions of your new home. It helps identify any unseen damages of the house and gives you an approximate of the maintenance and repair costs the house may require. Make sure to use a company that knows the area and the types of homes within the area. Your realtor should also be able to help you with setting up your inspection.

Conduct a Final Walkthrough

Although it is avoided by many, a final walkthrough is a critical pre-closing stage. However, do not confuse it with a home inspection. It is a crucial opportunity to ascertain that all the repairs agreed upon during the inspection have been made.

Have checklists that include all the areas you want to visit. Check your utility readings and ensure there are no discrepancies after the closing. Arrange for a utility transfer by notifying the utility companies.

Closing ON Your New Home

After doing everything above, it’s finally time to close on your new home. As you close, you have to sign an agreement between you and the seller on transferring ownership of the property. Working with an attorney to help you with all the legal matters of the process can be super beneficial and put your mind at ease.

It takes a lot of preparation and work to buy a house. Start taking care of your finances early in advance and manage your credit score so that you can secure a loan with low interest.