Buying your first home can be both exciting and a bit daunting. There is a lot you don’t know about the process. A good Real Estate agent will help you avoid potential problems as you make the big investment.
The first thing you need to do is to change your thought process. You’re moving out of an apartment or house where nothing was yours. You couldn’t make any changes or improvements, if something broke you had to make a call to the landlord, and your rent was constantly in danger of increasing. The rent mindset does cause you to have a certain outlook about the place where you live. It’s easy to bring that way of thinking into your search for a new home. Here are four areas that will require a new way of thinking when you are considering purchasing your own home.
Being turned off by problems that are easily fixed.
Almost all first-time buyers are looking for move-in ready homes. They don’t want to have to fix the kitchen or redo the bathroom before settling in. But finding a house that is exactly what you’re looking for is highly unlikely. And many smaller fixes are relatively easy to change such as dirty carpet or a scratched hardwood floor, wrong paint color, or dated wallpaper. Before you scratch a potentially great home off of your list because of a scratch on the floor talk to your Real Estate agent about what it would take to repair it. In many cases that can be a negotiating point with the seller. The more important issues are things you can’t necessarily see such as the condition of the air conditioner or foundation. Those are things that will be inspected before closing on the house. Right now you’re looking for a house that will fit your lifestyle. Many of the cosmetic issues are easily addressable so you can make this new place to live your own castle.
Overlooking hidden costs.
And then of course there’s the yearly expense of upkeep on your home. All of those expenses were rolled into that high rent payment for the 900 square foot apartment you were living in. Now those responsibilities will be yours. It is said that home maintenance typically costs 1 to 3 percent of the purchase price. For the average first time homebuyer in Tulsa purchasing a home costing around $150,000.00 that could add about $1500.00 a year to your home ownership budget. You can control some of that exposure up front by staying away from distressed properties and bank owned homes, even though they may look like a bargain when they go on the market. The previous owners lost the property in the first place because they couldn’t pay the mortgage. Chances are good they weren’t keeping up with home repairs either. It’s a good idea to stick with homes where the current owner shows an obvious pride in ownership. You may not like their choice of colors in the bathroom but you’ll love the way they kept up with repairs to the appliances.
Failing to budget for DIY projects.
Although it’s easy to change paint color or carpet, the changes do cost money. If you do intend to make changes to your new home right away you should plan ahead for the expense of doing it. Some of the upgrades such as paint are do-it-yourself types of jobs. Others such as carpet or hardwood flooring will most likely require an installer. And if you do intend to do it yourself you’ll need to consider when you’re going to work this into your busy schedule. Painting is at best a weekend project. Putting tile down in the dining room may take a bit longer. And then there’s the issue of resale. Don’t ever do a job yourself to save money if you don’t know how to do it. Take classes to learn the install tricks or hire a professional. The reason is very simple. Installing tile on your kitchen floor is a permanent upgrade. If you don’t do it right, when you get ready to sell your home it can bring the value of your house down or even worse prevent you from getting it sold.
Misunderstanding new homeowner’s insurance coverage.
New homeowners often falsely believe that their homeowners insurance covers flooding for example. If you don’t live in a flood zone you won’t need this coverage. But if you want it anyway, you’ll pay extra for it. Then there’s the issue of deductibles. In Tulsa it’s highly unlikely that you’ll find an insurance company that will give you a flat deductible of, say, $1000.00 or so. Most all policies now put the deductible at a minimum of 1% of the value of the home. Over time as the home value increases or if you add riders to the policy that cover other things, that number automatically will be higher. Then there’s the questions you need to ask, such as what happens if your washer breaks and ruins your carpet or if you experience a fire caused by an electrical short. This isn’t meant to alarm you. But you need to know what the word “insurance” actually means for your family in the event of an unexpected event that damages your property. You need to know up front what you will be responsible for and what the insurance company will cover. The day after a catastrophe isn’t the time to ask. A little time spent up front with your insurance agent will keep you from being unpleasantly surprised later.
Owning your own home is a personal achievement that can bring a lot of satisfaction. It can mean safety and security for you and your family and will give you a level of comfort that you can’t experience in an apartment. Searching for your first home can be exciting if you know what to watch for in the meantime. When you get ready to investigate your own options give me a call at 918-809-5199. Let’s see if what you’re currently paying in rent can give you more return in home ownership than you’re currently getting.
Ideas for this article were taken from a blog by Kimberly Palmer | U.S. News – Mon, Aug 5, 2013