First Time Home Buying: Advice from Realtors
By Emily Klemme
For first time home buyers, although the decisions and responsibilities that come with buying a first house can seem overwhelming, it is also an exciting time of possibilities and hope that the ideal home is out there just waiting for you.
To assist first time home buyers, we asked three real estate agents for their advice for those looking to buy a first home. Timothy Schutte with Exit Realty Capital City, Janis Robinson with Iowa Realty, and Sharon Rooney with Iowa Realty, offer tips such as evaluating whether it’s better to buy or rent, compiling a realistic home wish list, common mistakes to avoid, and financial matters first time home buyers need to know.
This article is split up into two parts: the first part will have advice on the best tips, common mistakes, and realistic wish lists and the second part will have advice on when to buy instead of rent, what finances to be aware of, and additional advice from the Realtors.
Best Tips
The home buying experience can be an exciting and chaotic time with a confusing mixture of many things going on at once. However, there are some ways for home buyers to take hold of the process.
“The process is stressful, and you need to take it with strides,” says Timothy Schutte.
He believes it is very important for first time buyers to understand the buying process. Buyers need to be aware that there may be a few bumps in the road, such as delays in the closing process. It is also important for buyers to be mindful of their budget. Buying a house is a large financial decision, and buyers need to make sure their decision is going to work for their budget. The lending process is very important to understand so gaining some knowledge of what’s involved on the financial side is also helpful.
Janis Robinson shares that realistic expectations are important for first time home buyers. “Lots of first time home buyers are coming from apartments, which are very nice and have upgraded features, but homes in their price range might disappoint the buyers, or be below the expectations they had.”
Sharon Rooney shares that determining price and location at the start is an important step, and finding a real estate professional is helpful to the process. She encourages her buyers to look at the properties they’re thinking of buying during different times of the day to get the full effect of what the property would be like if it ends up being their home. Visiting the location numerous times helps to see if the neighborhood is safe, and buyers can ask neighbors if they ever worry about theft or other issues. Buyers can see if it’s kid-friendly neighborhood if there are many children playing outdoors, if a park is nearby, and where the nearest schools are.
Rooney emphasized that in today’s market, a pre-approval letter is essential.
“In today’s competitive seller’s market, a letter of pre-approval from a lender is a must. This way, the buyers will also know how much they want to spend.”
Common Mistakes
Everyone makes mistakes, but with some helpful advice, first time buyers may be able to avoid mistakes others have made with their first home purchase.
Schutte says the biggest mistake he finds is when first time home buyers wait on a property they want.
“If people wait on a property they like and keep searching, or don’t make an offer, there is a good possibility someone else is going to come along and snatch it from them.”
Robinson sees a similar mistake of first time buyers losing a house they liked because they wanted to “get a deal” on the house. She feels it’s a mistake to lose out on a home that buyers want just because they feel like they’re not getting what they consider a good deal on the property.
She explains while it is important to not overpay for a house if it is priced unfairly, if the home is at market value and seems to be well priced, buyers shouldn’t miss out on the valuable home they want.
“There is competition among buyers for the same houses. If a buyer waits on a property trying to get a deal they think is fair, they need to know someone else might come along and take that house away.”
Rooney says a common mistake she encounters with first time buyers is that they lose focus.
“It is so easy to be captivated by a house that has a beautiful kitchen, or an inviting great room. I find that many first time homebuyers lose focus quickly and easily,” she warns.
However, Rooney has a way to counteract losing focus when working with her clients. Her homework for buyers is to make her a list of ten important items to them, including things like pricing and location. She says if she has a couple looking for a house, she uses two lists to determine wants versus needs, because most likely the lists will have many differences.
She has had success with her idea and shared that she helped a client who wanted a quiet neighborhood where he could sleep with the windows open. By knowing he wanted a quiet neighborhood, the buyers eliminated a home on a corner lot, one they may have otherwise wanted.
A Realistic Wish List
When it comes time to buy a property, everyone has specific things they would like to have in mind. Maybe it’s beautiful hardwood floors, an open concept first floor, or a large kitchen island. When it comes to a first home, however, expectations might not be able to meet the dream house in mind.
“First time home buyers, usually in their late 20’s to early 30’s, might have unrealistic expectations for their first home, especially if they are moving from a parent’s house they’ve been living in. They have to understand they need to scale down from their parent’s home,” Schutte says.
He shares that home prices have been climbing and that housing is getting less affordable. In 2010, first time home buyers were able to have nicer houses than the current market offers.
A few years has made a difference in the market, and first time buyers will have to keep that in mind when they’re deciding what’s most important to them in a home. They need to keep those expectations in mind when they’re house hunting.
For first time home buyers, Robinson explains that she likes to be selective about which home inspectors she uses. Some home inspectors will dramatize small things about a house that don’t necessarily need to be fixed or upgraded inadvertently overwhelming a first time home buyer.
If first time buyers are worried by the home inspection report, they might end up spending funds on things that don’t need to be fixed right away or upgraded. This can cause further stress about the budget the buyers have in mind.
Rooney says a pre-approval letter will help determine price. She also shares that for a buyer’s wish list, it is essential to determine what is important to the buyer. Some of the factors will often include things like location, size of the home and layout, and livability.
She advises factoring in where the buyer works too. “It’s a good idea to practice what a drive to work would be like from the home.”
She also sees millennials are renting longer and looking for the long-term when becoming first time home buyers.