There’s a lot more to buying a house for first time home buyers than simply looking online and checking out the photos that sellers or agents provide for the listings.
If you’re looking at foreclosed houses, for example, the photos probably aren’t go to show the results of a leaky roof, animal smells and damage, mold, etc.
So here are some more tips for first time home buyers and new investors when starting on the journey of home buying.
Important Tips for First Time Home Buyers
- Set your budget and don’t go over it. Whether you’re buying your first home to live in or purchasing a property to flip, your budget needs to include the cost of any repairs, taxes, and the mortgage payment, unless you’re buying with all cash.
- Next, unless you’re a real estate agent yourself or you’re buying the property at auction, a good agent will should have plenty of connections in the industry for mortgages and possibly even contractors that you can ask to go with you to inspect the property.
- You may need to weed through a lot of potentials before making a final decision, and that will entail some research.
- Whether you have kids or you’re going to flip to potential buyers who may have kids, research the neighborhood and schools.
- Check out the neighboring properties. Are they well-kept? How much have they sold for in the recent months? Your agent can help with that too.
- Look beyond the curb appeal! A house may look absolutely adorable and well maintained – from the outside. But you’ll need to do an in-depth inspection of the inside before making your decision.
- How updated is the kitchen? The appliances? The layout?
- How are the carpets? Will they need to be cleaned or torn out?
- Does the house have hardwood floors? In what condition are they? Can they be repaired or must they be replaced?
- Are there any signs of water damage? Termite damage? Foundation issues? These things will definitely add costs to the purchase price but you may be able to negotiate a lower purchase price if the house needs some major repairs.
- How is the house heated and cooled? How does it receive the water?
- If the house has central heat and air, be sure to check the whole system. If it has a gas or oil furnace, check the maintenance dates on the system.
- If the property is connected to the public water/sewer system, check for any damage to pipes or leaks to the inside of the house. If the property has its own well and septic system, that will need to be professionally checked.
These are just a few things to keep in mind for all first time home buyers, and especially for new investors. If you’re buying a home to live in, you can make these repairs over time.
But if you’re investing, you want to make sure any major repairs aren’t too costly and time consuming. It’ll end up eating into your rehab budget and may even throw your timeline way off.
If you budgeted to have the house back on the market within 30 days, but it’s going to take 60 days to make the repairs, you will have to adjust your budget for holding costs while the repairs are done.
Plan and Budget, But Expect the Unexpected!
When we bought our first home, we figured out what we could afford, and bought a property for less than half of what we were pre-approved for.
We did a thorough inspection, inside and out. My husband had bought houses before and we had an excellent real estate agent who knew her stuff.
The house was built in 1969, so it wasn’t new, but it the previous two owners had kept it pretty well maintained.
There were no termite problems, no dry rot anywhere; the foundation was still in excellent shape too.
But – the septic system was in bad shape, so we had some negotiating to do with that at closing. Fortunately, the sellers were willing to work with us. We had a new drainage field built and even got a new well!
The sellers disclosed that there was sometimes “minor flooding” on the lower level. Minor? About four or five months after we moved in, there was a torrential, ongoing rain storm that totally flooded the lower level of the house.
Well, there was nothing we could do about it but bite the bullet, clean it all up and replace the flooring throughout the lower level. Fortunately, since we’d stayed under budget when we bought the house, we were able to take care of the repairs ourselves.
Eventually, after the rain stopped, the whole area fell under an emergency zone and we were able to get all the money back from FEMA.
Overall, because we did our homework as first time home buyers; we researched, inspected, had a great agent and stayed within our budget, we bought and still have our house eleven years later!