65% of Millenial home buyers are first-time buyers.
With more Millennials purchasing their first homes, many are beginning the confusing and sometimes headache-inducing journey that is navigating real estate.
Budgeting, searching, and negotiating are just a few of the worries on their minds.
Here are a few things that first home buyers need to know before signing papers and closing deals.
1. Take Stock of the Neighborhood
It’s important to visit any property before buying your first home. However, you’ll also want to take a tour of the surrounding neighborhood.
Assess the area in terms of potential for future growth. This will play a large factor in how your home will appreciate or depreciate in value.
If you’re able to purchase a new home in an area this isn’t quite popular just yet but has the space and makings of a top-tier neighborhood, then go for it. Look for growth wherever you decide to buy.
2. Manage Your Expenses
If you’re buying a home with the help of a real estate agent, then they might push you a little to go outside of your budget.
This is why it’s a good idea to go into this process with the help of a financial planner. Factor in costs such as homeowner’s insurance, property fees and maintenance costs that accrue each year.
Of the five expenses that shock first-time home buyers, two of the largest are closing costs and property taxes. So, keep an eye out for these.
3. Think Long-Term
Chances are that your first home won’t be your last, especially in the digital age. With more flexible jobs allowing people to live and work from wherever they want, people are moving around a lot more.
It’s hard to predict where life will take you in ten years, so it’s best to think long-term.
If you’re thinking about starting a family, then purchase a larger home. If you think you might want to travel, then purchase a home that is in an area that’s ideal for renting out. Or, opt for a property rental that you can fix up and live in until you’re ready to move out.
4. Save Up for a Larger Down Payment
Experts actually recommend trying to save for a down payment of at least 20% or more. While this might seem daunting and difficult, it will pay off more in the long run.
Homeowners who put down less than 20% upfront generally have to take out private mortgage insurance. This is just another unnecessary added cost that you can avoid.
Instead, use your time wisely and work with a financial planner beforehand. Think about ways you can amp up your savings and take the time to really do it right.
Avoid Other First Home Buyers Mistakes
You’re not the first person to buy a home for the first time. This is good for you! It means that there are a wide variety of resources online you can learn from.
Ask friends and family about their experiences with purchasing a home and do your research online to avoid making mistakes that others have made.
If you need more help, please contact me and request the free “How to Buy a House Roadmap” below.
