The American dream is to buy a home.
But is it realistic for you?
I’d love to buy a home one day, but right now, it’s not in our budget.
We live in one of the most expensive housing markets in the nation, the San Francisco Bay Area.
For example, a 2 bedroom/1 bathroom house can range from $680,000 to over one million dollars!
I’m perfectly content with renting as I don’t have to worry about maintenance issues, mortgage insurance, property taxes, and water and garbage is included in our rent.
I have also seen all of the work throughout the years, that my dad has done to maintain his house. After more than 30 years, it is still a work in progress.
Since I am not an expert in home buying, I reached out to my Facebook fans for advice. I was blown away by the brilliant responses.
What I’ve learned is that YOU have the best advice and tips. Thank you for those of you who shared your top tip on home buying! I mentioned you after your tip.
If you are a first time home buyer, check out the sage advice from current home owners.
1. Work with a Good Realtor.
A good agent is everything (just helped a good friend buy his first house by hooking him up with a trusted friend who is an agent. He was amazing for my friend!) but the biggest tip I could give? Never, ever feel rushed. read EVERYTHING at closing – and if you don’t understand something, get a lawyer. My husband found huge mistakes in the paperwork on both houses he has bought! – Sarah K.
Work with a great Realtor. Not only do we have access to houses as they hit the market, we are a wealth of knowledge that is absolutely free for buyers (at least it is here in NJ). Tap into our resources, use our negotiating skills, we will also recommend great mortgage resources (your local bank isn’t always best) and guide you through the entire process. Best of all….it’s FREE when your using us as a buyers agent. – Carol V.
Find an awesome Realtor (like me! haha) who can show you homes the moment they come on the market (and often times BEFORE they hit the market). If you only go visit open houses you are only seeing the houses realtors’ buyers have already passed over. If you only look online at Trulia, Zillow, Etc you are missing out on the first few days a house is listed. They have a 2-3 day lag time. Ask friends for referrals and find yourself a buyer’s agent. Doesn’t cost a buyer one cent to be represented. The service is totally free to a buyer. – Wendy W.
2. Calculate the total cost.
Don’t forget down payment, closing costs, moving in/settling in costs, mortgage insurance, property taxes, electric/gas, water/garbage, maintenance, and HOA fees (if it’s a condo).
Know that your mortgage is only one of the many expenses associated with a house and plan your budget accordingly. – The 20-Something Budget
Know what you can afford to pay monthly. That may not be the figure you are approved for. – Alice H.
Know what your budget says you can afford, not what the lender tells you that you can afford. The lender simply looks at your credit score, income, and debt, so they may not have the full financial picture. You know your finances best. We just bought a house in June, so we have just been there, done that. – Jennifer of Live Simply, Live Thrifty, Live Savvy
3. Can you afford the house on only one salary?
Make sure you can afford it on one salary if there are two of you. Don’t be a slave to owning a home. #Overrated – Jennifer C.
4. Compare the 15 year with the 30 year mortgage.
Look at the 15 yr term vs. the 30 yr. term. Can you afford the 15? Then take the 30, and always faithfully pay what you would have paid if you took the fifteen, just pay it towards the principle every month. That way, if your income ever gets cut, job loss, divorce, other major life event, you have room to adjust without losing your home. – Brenda P.
5. Will this be an investment or a home?
Answer this question for yourself: Are you buying an INVESTMENT or a HOME?
You’ll be surprised at what you can live with if it’s the former and what you can’t live without if it’s the latter. How much are you willing to spend on each will usually differ, too.
We just purchased our third house, for more than the asking price, although it was reasonable since it was a HUD home. We knew this was more HOME for us than investment only so it has been worth all the updating and improvements (although we are trying to stick to a budget! – Carolyn G.
6. Think about heating and air conditioning costs.
Consider heating and maintenance costs yearly. We bought a house 5 yrs ago…very old and drafty, at a good price for the local and real estate prices at the time…and have had to heat with scavenged wood to afford heat in the winter.
While working to close up air gaps in the house. We cannot afford the hydro bill without free wood heat. And we are barely getting by with the costs on our fixed disability income if 28,000 a year. – Ril G.
7. Don’t settle.
Really know what you want and don’t settle. Also helps if you like or get along with your realtor and have patience. – Jessica R.
8. Consider buying a home on auction.
Research this option thoroughly first.
Wait on auctions..they are always cheaper and make sure you inspect the place before buying. – Evelyn K.
9. Don’t buy impulsively because you feel like you’ll miss out on a good deal.
Don’t buy a house because you think the prices will go up and you’ll miss out a good deal. Buy when you can comfortably afford it and you’re ready.
There will always be deals if you watch and wait. I just found an affordably priced condo in my neighborhood. – Fanny