10 things a first time home buyer should do before making an offer
There are a few defining moments in any person’s life. Graduating high school, graduating college, getting a new job—these are just a few of the milestones that you might face in your early life. For many people, the next few might include starting a family, buying a car, or perhaps buying their first home.
Buying a new home might seem like a daunting task when compared to many other major milestones in life. As soon as you start the process, it is easy to become quickly overwhelmed with all of the different questions you have, criteria to consider, and decisions to make. So to help you out, here are 10 things that every first time home buyer should do before making an offer.
1. Research the Area
Everything starts with a little bit of research, so that is the very first thing that you should think about doing if you are looking to buy a house. Start first with searching for information about the area where you want to move.
When you are doing this, look into things like local schools, average house prices in the area, and proximity to important amenities (like stores, mechanics, doctors, etc.). Even consider how walkable the area is, or if you’ll need a car to get around.
You can also use an internet search engine to find local news about the area, and get an idea about what living in the neighborhood is like.
2. Research the House
Once you find some houses that you like, the research should not stop there. Now, you’ll have to determine certain information about the property before making an offer. Here are some of the main things that you should look into:
- Research the market—when would be good time to buy?
- When you find a specific house, look at similar properties in the area and compare prices.
- Check the square footage and check cost averages based on that size.
- Find out why the current owner is selling—this could give you clues as to how flexible they might be on the price.
- Try to find out how much the seller paid, especially if they purchased the home recently.
- Look at trends for list price to sales price ratios.
- Ask for the home’s history and days on market (DOM).
3. Do a Walkthrough
You should not make an offer without first having a walkthrough. But even one walkthrough might not be enough. Many people might fall in love with the first property they look at, and then forget to examine it more closely before buying.
Before you make your offer, see if you can do another walkthrough, and make sure that you look for anything you may have missed the first time. Check behind doors and under any staged furniture for any potential flaws or problems.
4. Check Utilities
Your mortgage is not the only monthly bill that you will have to take care of, so make sure that you budget for more than just your regular mortgage payments.
It’s a good idea to have the sellers give you a utility estimate that you can review before making an offer.
5. Talk to the Neighbors
Just as important as the home itself are the people you’ll be sharing the street with. Try to talk to the neighbors and get a sense for the local neighborhood community. You might want to check for neighbors who seem noisy, or perhaps have a lot of pets, but keep in mind that you also might meet a few new friends!
6. Get an Inspection
Once you start the process of making an offer, you will be able to get the house inspected by a professional. This is important, as you need to know of any repairs that you will have to take care of, as well as estimates for those or any potential remodeling costs. You will also want to get the house tested for dangerous things like asbestos or lead-based paint. Many people believe that the inspector is hired by the real estate agent or lender, but it’s important to know that you can hire any inspector you want.
7. Give Yourself Options
No matter how much you love a house, sometimes it just doesn’t work out. As a result, it’s important not to get too attached to one property. Make sure that you have second and third options in mind for possible houses. It’s also best not to take the first house you see unless you take the time to examine it closely for any potential problems.
8. Secure Financing
It’s unlikely that you’ll have enough cash to buy a house up front. As a result, securing financing is a crucial step in the process. Make sure that you have good credit, and you secure a good rate for financing before making the offer. The best way to do this is to get a mortgage pre-approval before you shop. This will also help you figure out exactly how much money you have to set aside for new home costs. You can use the mortgage payment calculator from Discover® Home Loans to get a better idea for what your mortgage payment might be.