Smart Strategies for Your First Home Purchase: A Practical Guide

This is an exciting time! You or you and your partner have decided that now is the right moment to become first time home buyers. Now that you have made this decision, you might be rushing to your computer to search for your dream house. Of course, you want hardwood floors. Of course, you need stainless steel appliances. Oh, don’t forget about those great walk-in closets. But wait—stop for a moment!

First things first. You and your partner are about to make one of the biggest financial decisions of your lives. Buying a home should be done with careful thought, not on emotion. Listed below are tips and recommendations for the smart way to start the home-buying process. If you tend to buy on impulse, you will want to stick to a clear plan. There is a lot to consider, a lot to organize, and many good decisions to make along the way.

Establishing Your Financial Baseline

How Much Can You Afford? This is more than just a conversation between you and your partner after looking at your bank accounts. It’s a real evaluation done by a financial professional. Whether you work with your bank or a company whose expertise is mortgages, you should do so before you start your house hunt. Knowing exactly how much you qualify for is the best place to start. These professionals will not only tell you how much you can borrow as a first time home buyer, but will also explain the different types of loans and mortgages, and help you find what best fits your needs. A pre-approved mortgage lets you start your house hunt knowing your exact price range.

Distinguishing Needs from Wants

What Must This First Home Have? Here’s another tip for a first time home buyer: Once you know what you can afford, make a list of your priorities. If you are buying the home as a couple, both of you should do this. Divide your list into two sections: Really Need or Really Want. Always keep in mind that there are some things you can change in a house and some you can’t. Location is something you should put at the top of your list. Once you buy a home, you can’t move it. But things like countertops, decks, and appliances can always be upgraded when you can afford it. So take some time to think about this step. Keeping your priorities straight will help you stay on track.

Selecting the Right Expertise

Which Real Estate Professional Should I Use as a First Time Home Buyer? There are plenty to choose from, so do your research. You’ll want someone with experience and an agent who knows the neighborhoods and community. A full-time agent will be available when it fits your schedule. Research and review their marketing strategies and online presence. Realtors who are active online are also likely to stay up to date with current trends in the industry. When hiring any professional, ask questions to ensure they are a good match for you and your partner. After you finish your “Need and Want” list, write down some questions you want to ask your real estate agent.

Launching Your Search as a First Time Home Buyer

Where to Start with the House Hunt? Now that you have your pre-approved mortgage and your real estate agent, you’re ready to get started. There will be other professionals such as lawyers and home inspectors to work with throughout the process, and an experienced agent can help guide you in sorting that out. Many people search for homes online, while others leave finding the perfect first home completely up to their real estate agent. A mix of both approaches works too. Now the fun begins! When you start the house hunt, bring your Needs & Wants lists. Another great resource to have is this downloadable worksheet. The Home Hunting Comparison – This form from Canada Mortgage and Housing Corporation will help

Do you need more tips as a first time home buyer? Would you like me to create a checklist based on the “Needs vs. Wants” section to help you organize your house hunt?

Author: Deb Rhodes, REALTOR®