Buying a house is not something that takes one day. It’s a process and something you want to be 100% sure with in the end. Of course if you realize that place is not for you down the road, you can sell it. It’s not something that you have to keep for the rest of your life, but in the meantime it’s something that you want to be happy with. There are many different factors that you should take into consideration before signing the papers and today is your day to learn just what those factors are. From learning how to budget for that perfect house to winning a bidding war – the tips in the article are sure to influence your buying process and leave you on a positive note and ready to make that decision.
Sometimes life will throw hard decisions at you, but with a bit of research and perseverance, you can get through almost anything. Think back to when you took your first steps and said your first couple words. How crazy is the concept of learning and growing and changing as a person? All these steps are preparing you for the bigger life decisions you will need to make down the road and one of those decisions is buying a house. So cheers to being at this place in your life and with enough information you will set to go.
Let’s start of by learning how important it is to have a budget. With anything in life, you need to have enough money and enough income to pay for the things you want and the necessities you need in life. When you make money, you need to make enough to pay for a roof over your head and food and water to survive. Of course there are many other necessities we need to that money will buy but as long as we have the basics than we are set… until it comes time to put a downpayment on a house. Depending on where you are in your life and how much money you are making, it might take a few years to be able to afford a down payment on a house and monthly mortgage payments. Which is completely reasonable. However it is important to start saving whenever you have extra liquidity, if that it something you want to have happen. When calculating your expenses you will soon realize how much money it will take to own a house and be able to cover the mortgage and bills needed each month. Don’t forget about the most important factors when evaluating your assets and remember that you still need to eat and live. I encourage you to save and buy a house when you are young and when you are completely prepared to do so. If you know which place you want to spend a period of time in and what your budget is- than it might be easier for you then you think. Also, what’s the point of wasting your money for rent when you can put that towards a mortgage to pay off your house? With a mortgage you are not losing money, most likely your property will appreciate over time and you will make money off of it. With rent unfortunately you will not gain anything from that other than a roof over your head for that period of time. There is such thing as a rent-to-own opportunity and that is something you could consider as well. This is good if you enjoy the place you are renting and you want to start paying it off but you cannot afford to full on buy it out right now.
Let’s go over how to stick to a budget and what you need to set in place in order to do so. Like I said budgeting can be difficult if you are not making as much money as you would like too, especially when it comes time to buy material things that you don’t need but would like. You have to come to the realization of what you want and look at the bigger picture. If buying a house is something you really want, than maybe investing in a boat right now is not a smart idea and is something that you should put on hold at the moment. You need to create a list of wants and needs and create a budget to match. Making a piggy bank is something that might help you out with adding extra money every now and then when you can afford too. This all ties in with budgeting. Maybe going out for dinner every night of the week is not feasible, when you could spend half that amount of money and buy groceries at the supermarket. It’s all about coming to a compromise with what you want and how to achieve that.
So let’s say you are in the process of buying your first home and you have all the money you need to do so. You have hired a good real estate agent and you are ready to put in an offer on the place of your dreams. The place you desperately want is set at a price of $350,000. So you are told that putting an offer for $345,000 should secure that house for you. Unfortunately you are not the only one who is interested in the same place and there are now three other people who put in similar offers. You are now told that there is an offer in for $365,000. You could be given the decision to increase your offer and this is what you call a bidding war. If you really want that specific place, you will have to bid the highest amount in order to get the house. If you are bidding against another person, you are not necessarily going to get the place unless you offer the highest bid. Click this link to learn about winning a bidding war.
Once you realized you were ready to purchase a house, you would need to hire a good real estate agent who is familiar with the market, the area that you are looking to buy and who can fix up a good deal. It’s not just contacting the first realtor you find, it takes a bit of research and work to make sure you will work well together. Once you have gathered a couple real estate agents, meet up with each of them and have a consultation. Make sure you feel comfortable around this particular person and that they understand everything you are looking to get out of this experience. If you see any red flags, than it’s important to move on with the next agent. You can often find good realtors by word of mouth and doing some research on the Internet. You may think it doesn’t matter about the agent, but trust me- it really does. Spend the extra time finding the right match or you will wish you did in the long run.
See, it’s not just about having the right amount of money to buy a house. There are little things you need to remember to do in order to make your experience the best possible experience you can have. Now when discussing your options with your agent, make sure you are looking at reasonable possibilities and you are not going way over your head with choices that you cannot financially afford. There is a time and a place for everyone and maybe a house with six bedrooms, located on the water is not the right thing to invest in right now. I am not saying it is not the right thing, it all depends on your income and expenses and if you can afford to pay for a house at that level. This is something you should already know before you consult your agent. Maybe a trip to your accountant’s office would help give you some clarity in this step of the buying process.
Now remember to weigh out everything. How far away is this house from your work. Will you have a parking spot with this house or will you need to purchase parking? Is it better to spend the extra money and live downtown closer to your work? These are questions that you need answers too before you start your walk through. Clear communication is key during this important time in your life.
It’s important to understand that you do not have to buy a house at this time if you cannot afford too. You can continue what you are doing until you save up a bit more. Do not let pressure get to you and make sure this is something that you have thought long and hard. Remember buying a house comes with a commitment, so if you are not ready to take on that commitment- maybe rethink your decision on buying right away. There are so many factors when it comes to commitment that might influence your decision. Maybe you are looking at getting married? Your six-bedroom house that you just bought might now belong to your wife too. If that is something that you do not mind, than that is one less issue that you will have to worry about. Another commitment is the repairs that you will have to fix. Since you own the house you are now committed to fix your dishwasher or water heater if it happens to break down. These are repairs that you didn’t have to think about when you were renting because the owner of that house had that responsibility.
This may sound funny, but look beyond how the house is decorated. You do not have to keep the same paint in your house when you move in that is in there now. You do not have to keep the TV mounted on the same wall, as it is when someone else had this house. Decorating a house is easy; it’s the things that you can’t change that need the most thought. How do you like the layout of the house? Will the bedrooms be big enough for all your stuff? Does this house have two bathrooms that you will need for your family of six? These are the important things you need to look for when picking the right place.
Ok, great. You have found the house to meet your budget and you have taken into consideration how much your mortgage is going to cost and how much money you will have over for leftover use. Did you forget about the realtor fees and house insurance? Make sure you have calculated every last piece of expense that goes along with purchasing this house. I don’t mean to scare you away, I just want to prepare you with all the information that you will need. It’s not as easy as just having the right amount of money to buy the house. There are a lot of hidden fees that most people are not aware of if it’s their first time buying a house. I feel great knowing that you are prepared now to look for that dream house that meets your budget.
At the end of the day, buying a house is actually fun and exciting. As long as you know what you are getting into and you have the money to pay for it you are good to go. Embrace this part of your life. I am sure this is a day you have been dreaming about since you were a child. Keep a clear mind and don’t be upset if you lose out on your first opportunity. There are many places on the market and eventually with a little time and effort searching- you will find the perfect place in the perfect location to meet your budget. Last but not least, do not make irrational decisions and think long term. Good luck and I hope you find the place you are searching for.