What You Need to Know As a First-Time Homebuyer
Buying your first home can stir all kinds of emotions from the excitement of owning your own home to nervousness of working through the buying process. You can ease the process by remembering these 5 things. Here's what you need to know as a first-time homebuyer browsing new homes in DFW.
- Figure out what you can afford
It's tempting to go to the high end of what you can afford. But things happen and a home comes with other fees. These fees can include property taxes, insurance, homeowner association dues, maintenance, and utility. And the rate for these can change depending on your location. So what's the formula for determining your price range for a new home in DFW? First, beware that your credit history can affect the interest rate for your loan. Zillow has an affordability calculator. You enter your household's combined annual income, debt and monthly expenses, and the amount you'll make for a down payment. The calculator displays other fields you can fill in, but these make up the key items.
- Find a real estate agent you can trust
No doubt, a lot goes into the process of buying a home. Real estate agents do more than help you browse homes and get you inside. They can walk you through the buying process. Agents who know the DFW area can advise you on the pluses and minuses of the areas in consideration. Ask friends and family to refer you to an agent they know. Even if you get an agent referral, interview a few. Once you sign the contract with an agent, it means you can't work with other agents. You want to select the right one for you.
- Understand that a perfect home doesn't exist
You create a list of everything you want in a dream home. But there's no such thing as a perfect home. Knowing this will help limit disappointment. At the very least, you'll want to consider three things: price, location, and size. You may have to compromise by selecting two of those three. For instance, you want a large house for $400,000 dollars. The homes closest to your office cost more. You can either look for a smaller home in your price range or look further away from your office. Be ready to compromise. Remember you can always change the décor, but not the location. Not all homes can be expanded to make it bigger. If you browse for homes by builder, you can see if their website lists floor plans and neighborhoods. For example, Sandlin Homes floor plans lists the square footage and number of bedrooms and baths. This page has a search tool to help you browse homes by area, price, and keywords. Here's a map of Sandlin's DFW communities, which can be useful if you want a home near an office or city.
- Do your due diligence
New homebuyers don't simply find a home they love, bid on it, and start the paperwork upon receiving an approved bid. After the seller accepts your bid, you'll want to do your homework and add contingencies to your contract. This gives you a way out of the deal should anything go wrong. One contingency to include is a home inspection. The inspector looks at the foundation, roof, and other factors to verify the home has no serious issues. Request an appraisal contingency. If an appraiser values the home at price less than what you offered, you'll be able to back out. Otherwise, a bank will give you a loan at for the appraised price leaving you responsible to come up with the difference. A financing contingency gives you the right to back out if you don't get a loan approved. Even if you obtain pre-approval, it does not guarantee final approval. Ask the builder of your home if they have a warranty. Here's the Sandlin Homes Warranty to give you an idea of what a warranty may look like.
- Investigate tax incentives
The U.S., state of Texas, and some cities may offer tax incentives that may provide a full or partial exemption from property taxes. So search for incentives in your city and state. You may find a database like the one from DSIRE, which lets you search renewals and energy incentives. For an example of a city's offerings, check out North Richland Hills Rebates and Fort Worth Tax Incentives Program. If you find a home builder you like, check out their website. For example, Sandlin Homes lists the DFW neighborhoods where it builds new homes. You can read a description of the neighborhood and see the average price and size of the homes. Keep these five tips in mind while shopping for your first home. You'll be prepared and have contingencies in place to protect your investment.
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