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4 Vital Factors to Consider for First-Time Homebuyers in 2023

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Think, for a moment, just how much your life has changed from January 1st of this year to today. For some, 2020 brought completely new working conditions as offices closed down and employees relocated to their home offices. Others took the opportunity to move back in with their parents and save some extra cash. Regardless of your particular situation, there’s no question that 2020 has had its fair share of curveballs—and nothing could be closer to the truth for first-time home buyers.

Purchasing your first home is intimidating enough under normal circumstances, and the current state of the world only makes the home buying process that much more complicated. While the underlying process has stayed the same, those shopping for homes must also contend with social distancing measures and fluctuating markets before they can even think about signing on the dotted line.

Whether you’re looking for a cheaper alternative to renting your city apartment or are just ready to settle into a more permanent living situation, here are four of the most important changes in the home buying process that you should keep in mind.

Virtual Tours

House tours have always been one of the most important steps in the process of shopping for a new home. A well-staged house and persuasive realtor can help even the most skeptical viewer envision the space as their new home, and for many, home tours are one of the largest deciding factors alongside a trusted home inspection.

So what happens when you aren’t able to meet in person for a house to tour your potential dream home? To help replicate the in-person experience, many realtors have turned to virtual home tour technology.

3D virtual tours take the online home buying process to another level and provide a much more immersive glimpse into the houses you’re considering—especially when compared to a simple photograph. That’s because virtual tours allow viewers to see every angle of the space, such as how each room flows into the next. Virtual tours also allow first-time home buyers to buy homes on the market that would otherwise be too far away to visit in-person.

That being said, there are a few important factors that first-time homebuyers should consider when touring homes online. Asking your realtor to describe any distinct odors or loud sounds is a great idea, as these senses don’t translate well over a screen. And it’s always a good idea to tour the surrounding area to ensure the home is in a neighborhood suitable for your lifestyle needs.

Home Size

More likely than not, the events of the past year have changed not only how you looked for homes but also what you look for in a home. Thanks to shelter-in-place and social distancing restrictions, many new homeowners are looking for new types of amenities that will help them live comfortably during and after quarantine.

Remote work has made designated home office spaces a must-have in the search for new homes, and houses with ample outdoor living areas—from screened-in decks to lavish patios—are some of the most competitive on the market. In general, homes that feature rooms dedicated to a specific activity, such as a media room or wine cellar, have also become much more popular over the past few months.

This makes it even more important to look for a home that accommodates your needs today and well into the future. Investing in a more sizable home may come with a higher price tag, but it could save you time, money, and energy if you can avoid moving after only a few years of occupancy. To ensure you aren’t overstepping your financial boundaries, you should calculate in advance the amount of house you can afford in your current situation. These resources help you navigate the delicate balance between increasing your square footage and minimizing the hit to your savings.

Competitive Markets

If you’re already shopping for your first home, you might be all too familiar with the dread that comes with losing your first choice home to someone with a better offer. The most competitive housing markets in the country include major metropolitan areas like New York City and San Francisco, but even smaller suburban neighborhoods are facing unprecedented levels of new home buyer interest as people look to escape the high costs and cramped quarters of city life.

An uptick in real estate interest means that you’ll have to prepare for houses to sell more quickly and for a higher number of offers to be on the table. The key to navigating a hot housing market is to approach your search with an open, flexible mind. Looking into opportunities as they present themselves is a good mindset to ensure that you don’t get too discouraged should your search stretch into the foreseeable weeks or months.

In order to jump on new homes in your desired markets, you’ll consequently need to make sure that you have everything in order first. Being prepared is the key to moving through the homebuying process as quickly as possible, and first-time home shoppers who do not have their financial records, paycheck statements, and other personal information readily available are only lessening their chances.

Savings and Stability

Ask any financial advisor and they will tell you that savings are paramount within a personal finance portfolio. But a well-stocked savings account has only become more important when grappling with all of the challenges that 2020 has presented. Depending on the stability of your income, some experts recommend keeping as much as six month’s worth of expenses within grasp to keep you afloat during emergency situations.

Understanding how much you should have set aside in your savings is a critical step in vetting your personal finances before a first-home purchase in 2020. While a lack of established savings doesn’t inherently mean you should avoid shopping for your first house, it will make you much less prepared for any financial hiccups along the way—everything from closing costs to an unexpected HVAC replacement.

The same concept applies to your income, where having a stable, regular paycheck will prove invaluable in balancing the financial constraints of quarantining with the purchase of your first home. Not only will a volatile employment history make it harder to manage your monthly mortgage installments, but it may also impact the size and rate of your mortgage. Keeping your income in check is a key financial indicator that you’re ready for your first home, and it’s a habit you should take with you long after 2020 is over.

Things to keep in mind before you buy a house

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Looking for the perfect home might sound exciting. But sometimes, when you venture out in the hope of finding a paradise, you are shown nothing more than pigeonholes. The path leading to your perfect home may feel like a treacherous one, but that’s far from true. All you must do is keep the important points in mind while you are looking for your next home.

Here are simple tips to keep in mind while hunting for a house so that you can avoid making an expensive mistake.

Know your budget

The process of looking for a new home starts by evaluating your bank accounts, assets, cash flow, and liabilities. The most common mistake people make is that they set their hearts on a house that is beyond their budget. Yes, you can get a home loan to cover the deficit, but luxurious homes come at luxury prices which can throw your budget out of the window.

Know your loan amount eligibility

You can easily check how much loan amount you are eligible for using online home loan calculator, but keep in mind that these are only an estimate and not the final word. To get a true amount, you should contact your bank before starting your search.

There could be a significant difference between what you think you’re eligible (pre-qualified) for and what you receive (pre-approved). It’s important to be sure you know the amount of loan you can get before you set your final budget.

What about the other costs?

People think that, once they have bought a house, they are done with the expenses, but that’s not true. As soon you purchase a home, you’ll have a monthly mortgage payment (assuming you took out a home loan), you’ll have to spend money on maintenance, utilities and more. You also might have to purchase new furniture as well. Also, don’t forget to include insurance costs in your budget. All US mortgage lenders require insurance on your property to protect against costly losses.

Be open to change

Finding the exact home you’ve been dreaming of is extremely difficult. For example, you may want a swimming pool, three balconies, and attached bathroom with every bedroom, but when you may only be able to find properties with two out of the three.

If you spend too much time or are too picky, you might miss a good deal on a house. So, it is best to keep an open mind and a keen awareness of your priorities.

Don’t get carried away

People often make the mistake of overspending money just to decorate their new home. You don’t have to spend extra money if your old furniture is in good condition. Instead plan to replace it with new over time, helping you save a lot of money in the short term.

See through the drama

Builders often offer cosmetic changes or upgrades to change the look of your house for extra money. These fixes can alter the look of your house, but it’s important to consider if these are these additions or alterations are worth it.

Many changes and upgrades can be added later by a handyman or contracting service, often at a much lower price than if purchased from the builder. If you’re trying to save money on a new construction home, this may be a good idea to consider for those “nice but not necessary” improvements like decks, patios, or even central air conditioning units.

Pick and choose

Yes, you should keep an open mind when home searching, but that doesn’t mean you have to make bad choices. If you have a big family, buying a big house with 3-4 bedrooms makes perfect sense. You don’t want to feel cramped in your house just because you wanted to save some money.

Make the list of things that you are not willing to compromise at any cost. This allows you to make the right decision.

Keep an eye out

Builders usually promise to finish work at lightning speed, but the truth is, they take ages to complete the project. If you have made the payment for the house, make sure your visit the property regularly and contact the builder for regular updates. If you sense something is wrong, contact the local authorities to ensure your investment is safe.

If you’re purchasing an already-constructed property, make sure you do a proper survey. For example, if you are looking to find homes for sale near Las Vegas, make sure you check every nook and cranny before making your final decision.

Find your own agent

Hire an agent of your own if you want to know all the secrets of the property. You will have to pay a fee to the agent, in return you will get guidance that will be true.

Important Things to Consider Before Buying Your Next Home

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Whether it be your first home or you’re deciding to make a change, buying a home can be a time-consuming and complicated process. To ensure your purchase goes as smooth as possible, it’s essential to know what you’re looking for and go into home buying with your priorities in order. Here are a few things to consider before buying your next home:

Move-in Ready or Fixer-upper

When you’re on the hunt for your next home, it’s crucial to know if you’re looking for something move-in ready or a fixer-upper. There are benefits to buying each type, but ultimately it’s up to you, your needs, and what you’re willing to take on. A move-in ready home has the perk of being able to enjoy it right away. Once your purchase is complete, and your family settles in, all that’s required of you is to kick back and relax. Turnkey homes also come with attractive upgrades such as high-end fixtures, appliances, and flooring, that require little to no work from you. Search move-in ready homes on the market right now!

If you decide to find a diamond in the rough, you’ll be able to do so for a lower price tag. Due to this, homes in need of updates are perfect for people who are looking for something budget-friendly. A cheaper price point can provide you with extra money to complete renovations and transform the space into your dream home.

Kitchen Layout

The kitchen is one of the most popular rooms in the home, and can also be a key selling point in the home buying process, so it’s essential to keep the layouts in mind as you’re viewing homes. Don’t feel as though you have to stumble upon your dream kitchen, or sacrifice other aspects to acquire a luxury kitchen as you can always make updates and minor renovations. As long as the layout is functional and what you’re looking for, you can make changes to transform the space into what you truly want. 

Kitchen remodels are one of the most common projects that homeowners complete, and it’s no surprise since they are a gathering point in the home. Should you decide to perform a kitchen renovation to achieve your dream kitchen, consider kitchen remodel costs to help you assess your needs and wants for the room. For example, refinishing cabinets, new hardware, and light fixtures, flooring, and appliances can all be incorporated into a minor kitchen remodel, without having you redo your entire living space. 

Price Point

Before you begin looking, you should determine your price range and ensure you’re pre-approved for a home loan. This will help you stay on budget and find a home within your means to live comfortably. It’s also essential to research the house and ask questions before you move forward and are left feeling as though you received a poor deal. 

Once you’re ready to move forward, you must assess your monthly debts to determine your down payment percentage. Many argue that at 10% downpayment will do the trick, and can leave you with extra money in your pocket for home improvement projects or other additional expenses. The downside of a lower downpayment is that it can lead you to high monthly mortgage payments and can even be more challenging to receive approval. 

Instead, consider a down payment of 20%, as this can be beneficial in the long run. This can provide you with a smaller loan, lower monthly payments, and more equity. Just keep in mind that a 20% downpayment will require some saving ahead of time! 

Location is Important

Wherever your new home may be, you will be driving to and from each day, and that can be a dealbreaker for some, if not most, people. Viewing a home before researching the neighborhood can lead to problems down the road. 

Most buyers want a location that provides them with easy access to their everyday commutes, as well as main roads or other places you may frequent the most. If your previous drive to the grocery store was short, and home farther away may make routine tasks feel like a hassle. Be sure to speak with your realtor about neighborhoods and streets you prefer, as you want to be happy and comfortable where you settle down. 

Needs vs. Wants

It can be easy to fall in love with large houses that come with all the bells and whistles. It’s important you remember your budget and develop a list of needs and wants for your future home. Don’t buy over budget as that can lead to issues down the road, and make living in your home more complicated than it needs to be. 

Be sure to begin simple, and slowly upgrade. You don’t have to furnish each room with brand new items. Instead, start with what you have, and with every new purchase, you integrate into your home, remove or sell something old to prevent clutter. 

If you take these considerations with you into the home buying process, you’ll be sure to have a smooth sailing purchase and a home you love.