Buying your first home can be a daunting task and honestly its a real big girl/boy move. I was 22 when I bought my first home and looking back I was extremely lucky to have an awesome real estate agent and my mom to guide me through the process. That being said, I wish someone had given me a guide through the process and so that is what I am here to do!
Step 1: Ask yourself, why are you buying?
There are many reasons why someone may buy, however, depending on that reason, you may be looking for different things. For example, if you are looking to buy the property as an investment and not planning on living in the unit/home, there are different types of rules and regulations you should be privy to. If you are planning to lease it out to lets say to college students or to vacation goers the list of properties you would look at would look vastly different to properties where you can STR (short term rental - think Airbnb) or can lease year to year.
Fun Fact the market ebs and flows every 7-8 years. Depending on interest rates and the growth of the city, this time table may vary however it is a pretty good indicator/baseline to use. If a market has been hot for the past 5 years with rising prices, unless you plan to stay in the home for a while, buying a home to then sell 2-3 years later may not be the best investment decision.
For me, I found out that I would be spending a couple more years in Nashville, and so as an investment for myself, I decided to buy.
Step 2: Find yourself a REAL good agent.
Finding a really great real estate agent is probably the most important step in your search. I met around 8-10 before I found one that I could trust and really rely on. A great real estate agent:
- Knows the market inside and out. (Ask them questions, like, what are your thoughts on the current market? What trends have you seen in the past 10 years and what are you expecting the market to react within the next 5 years?)
- Is patient and walks you through the process (Find a good agent who plans tours well, doesn't rush you during the process, and is well connected with other agents.)
- Follows Through/Responds Quickly (A good agent always responds within 1 hour (2 max) ..unless its 2am.)
- Has your best Interests in Heart (There are a lot of agents out there that get "bonuses" for selling specific homes. Be wary if your agent stops listening to you and keeps trying to change your mind on your hard no's)
Step 3: Figure out your soft/hard Yes's and No's
What type of property are you looking to buy? Townhome, single family home, condo?
If it is a condo are you willing to pay $x in HOA fees per month (home owner association) and are the amenities worth that?
If it is a townhome or a single family home, and you travel a lot for work and anything were to happen (i.e. roof leak) would you be able to handle that and do you know who to call?
What are your location preferences? Is being close to downtown important or do you have a pet and want a backyard? Is location more important or type of home?
What are you willing to be flexible on?
Figuring out the parameters you want to operate in and what is most important to for you is a HUGE part of the process. For me, location and safety was the most important. As a single young professional who travels for work a lot and lives alone, I ended up going with a condo because with my lifestyle, I wanted to be close to downtown and also I wanted to be safe and not have to deal with the responsibilities that would come with a stand alone home (maintaining the yard, potential roof leaks, etc).
Step 4: Don't be afraid to shop around for a mortage lender.
I would say this was the part that was most unfamiliar with. A good rule of thumb is to start with asking your real estate agent if they have any recommendations as well as ask who you bank with for a quote. From there you can schedule meetings with them and have them quote you. Don't be afraid to ask the lenders a lot of questions and have them send their quotes via email so you can compare all of them. Similar to finding a good real estate agent, the lender should be very knowledgable and should be able to easily answer any questions you have. For me, I found Quicken Loans to be the best fit. They quoted me a good rate and with everything being online and through the app, it was pretty straightforward.
Once you have all of the above, your process should be seamless. If you find the right real estate agent, you will be able to lean on them heavily as they should make the process painless and a fun one!
Buying your first home is a HUGE step and something that you will remember forever.
Have patience and take your time finding your dream home.
It is all worth it. Hope you enjoyed reading!