All home shoppers should make a checklist before setting out on their quest for that perfect abode. First-timers, however, should take special care, and be willing to do their “home”-work with respect to issues like credit, budgeting, inspections and similar parts of the real estate puzzle.
An excellent resource for consumers is the CNN Money home-shopping lesson plan, which breaks a massive topic into small, easy-to-understand chunks. Sub-categories of the site’s curriculum (all of which is free online) looks at aspects of home ownership like “picking a team,” budgeting, closing a deal, the search itself, and other relevant topics. The whole series is an invaluable resource for people in the market for a home.
The short version
Before you head over to the CNN Money site and read through all the lesson chapters (highly recommended!), here is a tiny taste of what you need to know if you are shopping for your very first home:
- Do what you can to bump your credit score up: This means doing things like double-checking your three major credit reports and removing any errors and paying off small, negative items several months before you begin shopping for a home.
- Know what you can afford: Even if you hate math, there are countless online resources that feature calculators for helping you arrive at your maximum buy price. Or, you can use the old rule of thumb to guesstimate by limiting the purchase price to 2.5 times your annual salary.
- Gravitate toward high-quality school districts: Even for single people, this is good advice. Good schools mean better selling prices in the future. Buying in an area with top-notch schools is a smart way of protecting your investment!
- Don’t go it alone: Appropriate advice for anyone, but it applies double for first-time home buyers. This is not like buying a used car or a major appliance. Mortgage laws and regulations are complicated stuff, so it’s wise to have a pro on your side. Put a professional real estate player on your team, and you won’t have to worry about making newbie mistakes that are so common in complicated transactions like home sales.
- If at all possible, get pre-approved with your bank: This step will save you oodles of time by letting you focus only on properties that you know you can afford. Note that pre-approval is not the same as pre-qualification, but is a more detailed look at your personal finances and ability to repay a loan.
Buying a home can be a daunting process. Thankfully, resources like CNN Money are around to lend a hand to first-timers (and old-timers!) in the real estate game. Arm yourself with as much information as possible before heading out to shop for your first home, and you will be more likely to find a property that you can live with for many years to come. Happy hunting!