Understanding your wants, needs, and what you're qualified to purchase will make the search for a new home or property much easier
One of the biggest investments people make in life is the purchase of a home. When it comes to the decision of buying a home or property that you will own for 10 years (or more), it pays to have as much information as possible before finalizing your purchase.
For first-time homebuyers, this decision can be even more daunting. Choices, prices, interest rates, location, amenities — these can all become overwhelming and can lead to buyers making a rash decision on the first home they see or never making a decision at all. We asked William Gary Allen, a long-time real estate developer, for his advice to first-time homebuyers on making their first home purchase as stress-free as possible:
Get informed on the rules if you’re buying in a deed-restricted development.
-Experienced homebuyers know that surprises can pop up after they’ve bought their home, so they’re likely to get detailed information before making a purchase. First-time buyers, however, may be in a hurry to make a purchase or simply not know which questions to ask. This can be a costly mistake down the road. Always ask the developers and builders for information on any deed-restrictions within the community.
According to Mr. Allen, “If you buy an existing house, you already know what you’re getting. But if you’re buying a lot, find out who the builder is; see if there are architectural reviews that would protect you from having your property harmed by what’s being built next door.”
You’ll also want to know what you are allowed to do with your home. We’re reminded of a story of a homeowner who tried placing a large, custom-built playhouse in his backyard. While the playhouse was not an eyesore, it did not match the existing construction in the neighborhood and could be seen from other people’s yards. The homeowner had to have the house removed and created unnecessary tension in the neighborhood.
Bottom line: Always find out what can and cannot be done by homeowners in your prospective neighborhood.
What amenities are going to be available to homeowners?
Amenities such as recreation centers, walking and jogging trails, and parks are important to many new homeowners. The trend toward including family amenities is something that runs through all demographics.
First-time homebuyers interested in a new community that’s still under development should find out the list of amenities that are to be built and a timeline for their completion. “Whether you are buying a house or a lot, you want to know as much about the project as you can,” said Mr. Allen.
Bottom line: Know what amenities your community will have and when they will be available to residents if they’re not yet built.
Avoid “analysis paralysis.”
The sheer number of decisions to make and amount of information available to new buyers can be overwhelming. Be careful not to create extra stress for yourself when making these decisions.
There is no doubt that a home purchase is a big decision, but too much information can be a bad thing. You should set a few, perhaps three to five, major points of interest you are looking for in a home and use that to narrow down your choices. Understand that you may have to compromise on one thing or another, but if you find a house that meets 80 percent of your major points then you just may have the best home for you.
Information overload doesn’t only apply to homes and amenities; it’s not uncommon for homebuyers to shop around for the best deals and interest rates, as they should. But the amount of time spent trying to save a quarter of a percentage point could be better spent elsewhere, and would certainly be less stressful.
Bottom line: Recognize when good enough is enough and stop there.
DIY home searches and purchases are not the best idea for first time buyers.
Buying a home on the “do-it-yourself” plan can save you some money on the purchase, but in reality, first time homebuyers should avoid that route to home buying. A reputable real estate agent is more than just someone who finds you listings. They assist with all the legal paperwork, scheduling the viewings, planning for inspections (if you’re buying an existing house), and they also understand what prices the market will bear better than the average person.
All of this means they are a key part of the homebuying process. Ask around and meet with a few agents to get a feel for their personality and whether you think you can work with them. They will be your best friend in the home search process.
Bottom line: Do not go it alone, especially if it’s your first experience with home buying.
Get pre-qualified for a loan.
The days of easy loans are over, and that’s a good thing for everyone involved in the real estate market. So it’s crucial that buyers get pre-qualified for a loan before they even think of making offers on lots or houses.
A seller (or his or her listing agent) will no longer accept an offer without assurance that the buyer is qualified to purchase. A letter from your lending institution stating you are qualified for financing is what most sellers (and their agents) are looking for. You do not want to lose your dream home because you didn’t get pre-qualified.
Bottom line: Know what your bank will be willing to allow you to finance and get the lender’s letter stating you are pre-qualified.
Being knowledgeable about your local real estate market and understanding your wants, needs, and what you’re qualified to purchase will make the search for a new home or property much easier. Follow these tips when making your first house purchase for peace of mind and you will soon be enjoying your cozy new home.
About William Gary Allen
William Gary Allen has more than four decades of experience as a developer of luxury, custom-home communities. In addition to his real estate development knowledge, he is known for his philanthropy and support of higher education in his hometown of Charlotte, North Carolina.