A Quick Guide On Purchasing Real Estate For First Timers

Introduction

Acquiring property can be a stressful process. Chances are, you’re not clued up on how to verify the quality of your house, and then there’s all the paperwork and red tape that come with buying.

With this short guide, we’re aiming to let you know that first-timers purchasing real estate have some benefits that others don’t, and we’ve also gone through some of the main points you need to consider when going through the buying process.

It helps to have your financials in order when going through the process, but everybody needs a little help sometimes. Finding an IRA custodian to help manage your finances can be a great way to manage finances and take the stress off, so consider finding the best self-directed IRA custodian for real estate that you can work with.

First-Time Homebuyers

If you’re a first-timer, you may not know that you actually have a lot of advantages that a lot of people don’t. So, how do you know if you’re a first-time homebuyer? You need to satisfy any one of these points:

  • You have not owned a principal residence for three years.
  • Your spouse owns a home but now you’re buying somewhere together.
  • You’re a single parent whose only owned home was with a spouse. Similarly, if you’re displaced but your spouse owned a property, you should be eligible.
  • Your only owned residence wasn’t connected to a permanent foundation.
  • Your residence violates building codes and cannot be made compliant for less than it would cost to build a new place altogether.

If you fit any one of these, you may be eligible for classification as a first-time homebuyer when going through the purchasing process.

A Step-by-Step Guide to Buying

Now that you know where you stand as a real estate buyer, check out this step-by-step guide to buying real estate for the first time.

Question Time

Before doing anything, you need to ask yourself a set of questions to make sure you have everything in order. You’ve probably asked some of these already if you’re already researching the process but it’s handy to have a checklist to make sure that you’ve considered everything.

  • How are your finances? – Audit your finances to make sure you can front both the initial cost of buying and the recurring payments that will need to be made for upkeep, groceries, etc. Be honest with yourself and spare no prisoners. Take stock of your savings, trim your spending, get good credit.
  • How much mortgage can you get? – Back to finances, check with mortgages you qualify for with your lender. They get a say in what home you can afford too, so you need to clear it with them before getting any ideas. They’ll look at any debt, your income, and your job position and calculate that into your mortgage. Get preapproved before placing any offers on your new property.

Find A Home

Now you need to find the property you wish to acquire. Thanks to the Internet, this is easier than ever with so many listings online that you can access and sort through properties by price and how close they are to your current area or place of employment. If it’s close by, you can go and scout the neighborhood yourself. Also let people know you’re looking to buy so that family, friends, and colleagues can refer to you if they come across any buying opportunities.

Make An Offer

Assuming you’ve done your financial due diligence as outlined above, and you like the place, then it’s time to make an offer. Your real estate agent will help with this and relay your offer, where it’ll either get accepted or countered. You can play the negotiation game forever, theoretically, but if you’ve done the math already then you should have an idea of the highest offer you can afford.

Inspect, Then Close or Move On

Finally, you can start to think about closing the deal on your new property. Not so fast though, if you’re savvy then you want to have the place inspected by somebody that’s qualified to tell you how well-constructed the premises is from both the exterior and the interior. If the inspection reveals defects that you weren’t told about, ask for them to be solved and withdraw your offer until any problems are solved or re-negotiate a new offer with those defects taken into account. If you’re happy with the outcome, close the deal.

A Quick Guide On Purchasing Real Estate For First Timers was last updated March 16th, 2021 by Charlie Short