Buying your first home is one of those big milestones in life. It’s a massive accomplishment that normally means you’ve made many sacrifices to save a deposit and get a bit more security into your life, especially if you’re a millennial. However, it’s not all a walk in the park, and there are some things that no one ever seems to tell you about buying your first home – perhaps because they don’t want to kill your buzz – that it would be useful to know so that you’re prepared for every eventuality.
With that in mind, here are some of the most important things no one tells you about buying your first home:
It probably won’t be perfect
With so many homes for sale it’s easy to fall into the trap of thinking that you’ll be able to find your dream home, but that just isn’t realistic, well not unless you have an unlimited budget and endless time to search anyway. When you’re just starting out, you can’t expect to find that perfect home that has everything you want and more – you need to work your way up the ladder to find that. That’s not to say that you can’t find a great home that meets your needs and which you’re proud of – you absolutely can – but perfection will almost certainly come later and that’s fine. Don’t expect too much and you won’t be disappointed.
You don’t need to blow your budget
Another thing that’s rarely mentioned is the fact that you absolutely do not have to spend your whole budget on your first home. Just because you’ve qualified for a particular mortgage amount doesn’t mean you need to choose a home that uses up every last dime.
This is good news actually because it means you can spend a little less on monthly mortgage costs and save your money for other important things. So, instead of just applying for the maximum mortgage amount, take a look at your needs and the homes in your area that will meet them and only borrow what you need to secure the right place for you, even if it is cheaper than you could absolutely afford.
It’s smart to check out future plans for the neighborhood
Buying in an up-and-coming-neighborhood is a great way to get a home you can afford, and be relatively sure that it will grow in value. People love to live in thriving neighborhoods where there is a lot going on, and neighborhoods that have a lot of plans for things like new shopping malls bars and entertainment venues, museums, and galleries, etc., in the works are likely to grow in popularity. If you can buy in these areas before all the work is done, you could see a healthy return when you decide to sell, and what’s more, you can be sure that you’ll live in a fun and lively location for as long as you’re there.
It’s smart to buy in a good school district
Even if you don’t yet have kids; even if you don’t plan to ever have kids, it’s smart to buy your first home in an excellent school district because parents care about that kind of thing and it will increase the value of your home when you come to sell.
Realtors aren’t always honest
Obviously, most realtors are perfectly nice people who wouldn’t dream about lying to you about the state of a property, but there are a few bad apples out there which is why it may be worth investing in a buyer’s agent – someone who will be on your side with the sole aim of ensuring that you get the right property for you at a fair price with no nasty surprises. They’ll help you negotiate a great price, and since they’re so much more experienced than you, chances are you’ll get a better deal than you ever would without them, especially as a first-time buyer.
Rogue realtors are also why you should ALWAYS pay for a home inspection before you make an offer on a property.
Talking to the sellers is a good idea
If you can, when you’re looking around a potential property, take some time to talk to the sellers because you may be able to glean a lot of important information that way. Sure, they are unlikely to disclose the fact that the neighbors love wild parties or anything like that, but they’ll probably be willing to talk about the neighborhood and what’s going on there in general. You’ll also be able to ask them about local schools and businesses that you may want to use, so you can get a general idea of the place. If they like you, they may even give you preferential treatment should two similar offers on their home be made.
Maintenance is expensive
A lot of millennials end up completely shocked by the cost of maintaining a home that they own. They’re so used to renting that they don’t realize how much things like plumbers, electricians, and roof repairs cost because no one has ever told them. But the fact is when you buy your first home, you are your own landlord and that means you’re going to have more expenses to deal with than you did as a renter. Just for reference, the average cost of a plumber is $500-800 for a significant repair and $45-160 for a basic callout. The average cost of an electrician is $40-100 per hour! Now that you know, you’ll realize just how important it is to save some of your paycheck each month for emergencies.
Furniture is expensive
Or it can be. If you’re happy to buy second-hand furniture you may get away with a bill in the low thousands, but if you want to buy everything new, you may need to pay up to as much as a quarter of your home’s value for all of the furniture you need! If that’s shocked you, you’re not alone, but don’t worry because you can always start by purchasing just the essentials and add additional pieces as and when you can afford it, and of course, if you have any old furniture, depending on its dimensions and the size of your new home, you may be able to use that too.
Because furniture is so expensive, you may also want to hold off on decorating sand focus on buying fixtures and furniture first, After all, it’s easier to live with as paint color you hate than it is to do without a couch or with only shabby kitchen units that are falling apart, and anyway, tastes change so often that it makes sense to wait a while until you get a feel for your home and what your style as a homeowner is really like.
You’ll encounter numerous hidden expenses
When you buy your first home, you may be shocked by all of the hidden expenses that come with it. For example, a lot of millennials are required to purchase mortgage insurance because their deposits are under 20 percent of the home’s value. This can be as much as one percent of the home’s value annually. Then, there’s property taxes, pest control, emergency repairs, Home Owner association, or Condo fees, and well you get the idea. All of these things can add up to a huge expense that can wipe your finances out if you aren’t prepared for them.
A good home insurance policy is vital
One of the expenses new homeowners will accrue that doesn’t seem to get much attention is that of an insurance policy, but a good insurance policy is really important because it will ensure that you and your finances are protected should the worst happen. Ideally, you’re going to want to take out a policy that covers your building and its contents. That way whether you’re burgled, flooded out, or whatever, you will not have to shoulder the burden of repairs/replacements at a time when you’re just starting out.
To get the best insurance deal, use a comparison site.
Walking away can be a great strategy
A lot of first-time buyers are so scared to walk away from a deal when they think they’ve found their ideals home because they don’t want to lose it, but actually, when negotiations stall it can be a great way to get what you want. You see, buyers are often scared of being unable to sell too, so if they know you’re really interested, should you walk away, they may well come back to you with a slightly better deal that will enable you all to move forward.
Now you know what it’s really like to buy your first home, and you know a little about the costs you’re likely to encounter, you can do so with far more confidence in yourself and your choices. So, take your time, see as many properties as you need to in order to feel comfortable with your decision to buy, and enjoy your brand new home!