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13 Tips for First Time Homebuyers

07/15/2010

Purchasing a home for the first time can be exciting and scary. Follow these 13 tips for first time homebuyers to help you find and purchase the home that best meets your needs.

13. Determine how much home you can afford.

Preapproval is based on an in-depth review of your income, debt, credit history, and other factors and offers a fairly accurate idea of how much you can afford to spend on monthly mortgage payments. You still need to make sure the amount is feasible given your overall budget.

12. Create a feature list.

Separate the list it into two categories labeled "must have" and "nice to have." Doing so will give you a clearer idea of what you can and cannot live without. And that'll help you choose the perfect home.

11. Plan for the future.

If a growing family is in your future, look at homes in the school district you desire and consider the proximity of the bedrooms, for example. If you plan to start a home-based business, look for suitable office space within the home.

10. Don't let emotions overrule factual data.

Decisions based on facts like square footage, lot size and what's included in the sale are sounder than decisions based on things that appeal to your emotions.

9. Evaluate resale potential.

If you had to turn around and sell your home right away for the same price you paid, consider how easy or difficult would that be.

8. Factor in the indirect costs of homeownership.

This includes things like utilities, lawn maintenance equipment, pool supplies, moving expenses, renovations, association fees, garbage, recycling and all other costs associated with maintaining that home.

7. Focus on the space rather than the contents.

Whatever furniture and decorations in the home while it's on the market belong to the owner, not you. You're buying room size and orientation, not contents.

6. Get a home inspection.

You need to know the condition of the roof and foundation, electrical and plumbing systems, appliances and other property-related issues before you commit to purchasing the home.

5. Use the internet for research.

It's a great resource to compare mortgage rates, sales, neighborhoods, schools, crime, and more.

4. Don your negotiating hat.

Never be afraid to negotiate what you want. The worst the seller can say is "no." And remember, both parties share the risk. Sellers risk losing buyers and buyers risk losing their "dream" homes.

3. Resist the urge to purchase new.

Outfitting your brand new home with brand new everything may result in more debt than you can handle.

2. Determine what's within your ability to fix.

Non-load bearing walls can be torn down and relocated. But if there's a heavily congested highway out front, you're stuck with it.

1. Determine what's within your budget to fix.

Homeownership can be expensive. Even in brand new homes, things break and need replacing. Renovations should be planned and budgeted for before they're undertaken.

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