Tips and Techniques for First-Time Home Buyers

Are you a first-time home buyer eager to get into the market? Whether you're a first-time home buyer or a veteran, buying a home is a complex process. The challenge of buying a home for the first time can seem so daunting that it's tempting to either just go with the first house that falls in your price range or continue to rent. Buying a home is a significant, monumental occasion in anyone's life. It's completely natural for a first time home buyer to be nervous, but it is important to be through in your selection and ensure that no mistakes are made. The home you buy will likely be with you for years to come, so make sure it's a good one. Here are some handy tips and useful techniques to give you a boost in the home buying process.

1. Attend a First-time Home Buyer's Seminar
You had to study up to learn how to drive before you got behind the wheel. It's the same with buying a house. Making the wrong decision on your first house can come back to haunt you, so why not take a little time to learn from the pros and go straight to the head of the class with your investment knowledge?

First-time home buyer seminars are offered by a range of organizations, including city housing departments and non-profit organizations. You'll get tips on shopping for a home, financing a purchase and even maintaining your home once you've bought it. Plus, many of the seminars are free.

2. Budget
Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28% of their income on housing costs. Go much past 30% and you risk becoming house poor.

3. Get Started a Home
Be an educated consumer. Almost 80% of home buyers begin their searches online. Aside from reading up about the process, get comfortable with all the new terminology and the decisions you will be faced with down the road. Take an in-depth look into your finances so you will be prepared when asked about your price range. Know the different styles of houses and which ones suit you most. You can browse through loads of online listings, most of which are complete with virtual tours and photographs.

4. What specific features will your ideal home have?
While it's good to retain some flexibility in this list, you're making perhaps the biggest purchase of your life, and you deserve to have that purchase fit both your needs and wants as closely as possible. Your list should include basic desires, like neighborhood and size, all the way down to smaller details like bathroom layout and a kitchen that comes with trust-worthy appliances.

5. Find a Good Home Inspector
A knowledge home inspector is just as important as a great real estate agent. Getting a home inspection can save you thousands of dollars in the long run, but it has to be thorough. Ask friends and co-workers for referrals, or find out if your real estate agent has anyone they would recommend.

Once you've gotten a few names, interview potential candidates. Don't be afraid to ask question: find out what their process is for inspecting a home, how long it usually takes, what their expertise is and what kind of information and paperwork you will receive after the inspection. If there's anything special about the property you're interested in - for example, a septic or propane tank - be sure the home inspector knows what to look for. Finally, be sure to follow up on any red flags in the home inspection report by hiring experts to come in and take a closer look at a possibly radon issue or evidence of a pest infestation.

6. Get a Loan
It's not always necessary to have a mortgage broker or bank in your back pocket before buying a home, but it's smarter to get loan pre-approval in advance. This way you know for certain how much home to buy.

Popular first-time buyer loans are FHA loans because the minimum down payments requirements is much less than a conventional loan. However, if you are thinking about buying foreclosures, for example, conventional buyers tend to get priority with REO banks.

You can ask your agent for a referral to a mortgage broker or check with your own bank/credit union. Compare the types of mortgage available to you and your GFE(Good Faith Estimate).

7. Avoid Family - Assistance Tax Traps
Before applying to the Bank of Mom & Dad, note that outright cash gifts can result in big tax bills. Avoid them by structuring parental assistance as a bona fide loan with minimum interest rates set by the Internal Revenue Service. Forms for such transactions are posted at sites like

8. Negotiate the Offer
You've found the house of your dreams, and you're ready to start the process of making it your own. Well, that all begins with making an offer. While there's no way to know exactly what type of  offer the seller will accept, when making your offer you should take into account several things. Knowing how long the house has been on the market, the asking price's position related to comparable properties in the area, and even the number of available comparable properties in the neighborhood can make a difference. Realize that negotiation is usually inevitable, so be sure to leave a little leeway within that first offer.

Make sure that your offer includes contingencies such as financing  and property inspections. You don't want to be bound to purchase a home if you don't have enough money. You also don't want to purchase a home that has a cracked foundation or some other deal breaker without having the option to go back to the negotiation table.

9. Consider High-Deductible Home Insurance
If you're a do-it-yourselfer moving into a new home, consider lowering your homeowners insurance premium by raising the deductible. Even if you're buying an older home, or aren't too handy, it might not be cost effective to pay a lot in extra premiums to insure against that last dime of potential liability.

10. Take a Second Look
After narrowing down which home you are truly interested in, go back for a second look. You will likely notice many more details that you may have overlooked the first time around. Have your real estate agent double check that the house is still available and that the seller is motivated to sell. If it is a green light, congratulations, you've bought yourself a home.

Please have a look at The Benefits of Choosing New Home

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