Are You Ready for Home Ownership?
Owning your first home is one of life's big milestones. For many, home ownership represents freedom, maturity, and independence—owning your first home is a sign to the world that you've completed the transition into adulthood. Others think of their first home as more of an investment, whether in a space where they can begin to raise their family or in a piece of property that will gain value over time.
Home ownership has many advantages over renting. Unlike renting, owning gives you a great deal of freedom to redecorate, paint, or even renovate your living space exactly the way you want. You also build equity with each monthly payment, rather than simply giving a rent check to someone else. For these reasons, many buyers expect home ownership to be a wholly positive experience.
However, to get the most out of owning your first home, you have to be prepared. For all the freedom it offers, home ownership also comes with burdens, from mortgage payments to property taxes to maintenance costs. You're also more heavily committed to the neighborhood you live in. First-time homebuyers should follow the steps in this guide to make sure that they're fully prepared for the task of owning their first home. And if you're not ready yet, don't worry—it's better to wait a few more years to make sure that you can do it right.
Are you ready to buy? The answer to this question is about more than your finances. You want to make sure that you're mentally prepared for all the challenges and opportunities that home ownership will entail. To make sure you're mentally prepared, we recommend that you figure out three things: what you need, what you want, and what you're getting into.
What Do You Need?
Before looking at potential homes, you should know exactly what you need. For example, if you have a few children, you definitely need to find a home with enough space for them. The same goes for if you're planning to have children while living in your new home. Another factor to consider is how much work you'll be able to do on the home while you live in it. Some people need a recently renovated home, while others are happy with a fixer upper that they can shape into their dream home.
What you need goes beyond the house itself. Do you need to live near a park? Is it important that you're not too far from your parents? How far away are you comfortable being from the schools your kids will attend? Knowing the answers to these questions will help you determine which neighborhoods are worth looking in, and save you time when you can instantly rule out homes that don't meet your needs.
What Do You Want?
In real estate, the secret to knowing what you want is knowing what you don't need. You probably want a large back yard, but will you be okay without it? What about a fully furnished basement, or an easy commute to work? Remember that you won't necessarily stay in your first home for more than five years, so there are "nice-to-haves" that you can sacrifice for now in order to have the independence and security of home ownership.
Why is it so important to know what you're willing to sacrifice? Imagine comparing two homes, one of which has everything you need but none of your "nice-to-haves." The other homes has everything you want, but is missing one or two of the qualities that you need. Without preparing yourself, you will likely think that the second property is more attractive, and be lured into buying a home that's missing something essential. But with a clear understanding of your needs and wants, you can make the choice that's best for you overall, even if it isn't the obvious one.
A good realtor can help you determine which qualities are non-negotiable, and which ones you can sacrifice. Then, your agent will help you find properties that meet your needs.
What Are You Getting Into?
In addition to knowing what you need and what you want, you should be fully prepared for what the responsibilities and hidden costs of ownership will be. Without knowing what to expect, you might have your first home ownership experience spoiled by unforeseen costs and inconveniences.
First, with any home that you view, you should try to estimate what repairs and maintenance costs might look like over time. Even the nicest, newest homes can have something go wrong that will create an expensive or unpleasant situation. While doing your due diligence with getting the property inspected is a good first step, you should never assume that a home will stay in perfect condition while you have it.
But it's not just the unexpected repairs that you need to think about. There are plenty of regular maintenance requirements that you can predict before you buy a house. Beautiful, large yard? Be prepared to spend an hour every other weekend mowing it. Nice, tall trees? Get ready to rake the yard and clean the gutters every fall. If you let these responsibilities of home ownership sneak up on you, you could end up with a bad taste in your mouth—but as long as you're prepared for them, you'll be ready to enjoy owning your first home.
Being financially prepared means understanding how much you can afford. When people begin searching for a home, especially if it's their first home, they almost always fall in love with a property before realizing that it's beyond their budget. This can be a demoralizing experience, or worse—it can lead them to make a purchase they can't afford. You can avoid these pitfalls by knowing exactly what your budget is before you begin looking.
Consider your debt-to-income ratio. Many experts advise keeping your housing debt no higher than 30–32% of your gross household income, and overall debt below 40%. If you follow this advice, then you will know how much your monthly mortgage payments, combined with property taxes, can be. Our mortgage calculator is a tool you can use to figure these numbers out.
Get pre-approved for a loan. Getting pre-approved is a way of finalizing your budget, but it has other benefits—it shows sellers that you're serious and may help motivate them to choose you over other buyers, even buyers with a higher offer. If you're unsure about how to find a lender to pre-approve you, just get in touch with one of our agents, who will be happy to help you find someone.
Having a Plan
Once you know your needs and your budget, you can start looking at homes. Once you're ready to make an offer, make sure you have a plan that includes the following steps. Doing your due diligence will pay off in the long term.
Hire a real estate lawyer. A good real estate lawyer will be able to guide you through the complex process of your first property transfer. By ensuring that you have a lawyer, you make sure that you won't suffer from any surprises down the line. So, while it can seem like an extra cost, a real estate lawyer can provide peace of mind and save you from long-term expenses. If you're not sure where to find a good real estate lawyer, let us know so we can help you out.
Know how much to offer. You already know your budget, and the asking price, but a good offer is more complex than simply matching these numbers. A good offer is all about finding the balance between saving yourself an unnecessary cost and still outbidding the competition, and can include a variety of additional factors such as size of deposit and move-in date. Hiring a good buyer's agent is the best way to navigate the process of making an offer, as a skilled agent can save you money and time on your purchase.
Get all necessary inspections done. No matter what kind of home you're buying, make sure to get it inspected. Older homes can have problems with asbestos, lead paint, or mold. Newer homes can have faulty wiring, leaky pipes, and pest infestations. When you have the home inspected before buying, you ensure that you won't be stuck fixing it yourself later on. Let us know if you want to be put in touch with the best home inspectors in Kansas City.
Do a final walkthrough. Before closing the deal, make sure to do a final walkthrough with your agent, to make sure that everything is right. This includes confirming that all agreed-upon renovations and repairs have been done, and that the home is ready for you to move into it. Having your agent with you is essential, because they will know exactly what to look for and what commonly goes overlooked at this stage of the transaction.
Welcome to Your First Home
Buying your first home can seem like a lot of work, and it is. But the results are worth it. Owning your own property provides freedom, independence, and long-term financial stability. By following the steps we've outlined, you can make sure that the process goes smoothly, and that you end up with a home that meets your personal and financial needs.
The good news is that you don't need to go through this process alone. Contact the Glennon Real Estate Experts for your personal guide through the complex process of buying your first home. We'd love to help this milestone in your life go as smoothly as possible.