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Navigating the real estate market as a first-time homebuyer can be daunting. After all, you’re making a huge decision and there are so many factors to consider. In an effort to help clear up the process, I went to the experts and asked real estate agents across the country to come clean and share the one thing that they wish all first-time homebuyers knew.
Here’s what they had to say.
Shop the neighborhood, not the upgrades:
“It’s easy to fall in love with a newly remodeled house that has shiny floors, an open kitchen, spotless bathrooms, etc. However, I warn all of my clients that while you can always update a kitchen—or entire home—you cannot update your neighborhood. It goes back to the all real estate adage, ‘location, location, location.'”
– Luis Dominguez, an associate realtor with Douglas Elliman Real Estate
Be prepared to act quickly:
“Today’s market is a seller’s market. Inventory is low and there are often bidding wars, where the seller ends up selling for a higher price than the initial listing price. Buyers need to know that they can’t wait around in conditions like these. If you’re serious about buying a home, you and your agent should be prepared to view the home as soon as possible and to submit a winning offer quickly.”
– Cheryl Eidinger-Taylor, president of ERA Key Realty Services
Be patient:
“First-time homebuyers must understand that purchasing a home is often a lengthy process. While the majority of homebuyers would prefer to spend only a couple months looking for a new home, it’s not uncommon for it to take longer than that to find a suitable property that works with the buyer’s budget. Rejected offers and being outbid by others is common. Stay positive about the situation and don’t get frustrated. It will happen.”
- Jeffrey Hensel, broker associate at North Coast Financial
Set your own budget:
“It’s important for buyers to have a maximum budget that meets their own needs. Although a bank may be willing to loan you a large sum, you don’t have to borrow that much. It’s crucial to set a budget where you know you’ll be able to comfortably make the payment each month. From a cash flow perspective, ideally, a buyer should not spend more than 25-30% of their monthly income on their housing expenses.”
– Jared Barnett, an New York City agent with Compass
Create a ‘Wants vs. Needs’ list:
“Whether you’re buying a multi-million dollar home or something less than $100,000, it’s rare to find something that perfectly checks all the boxes. Break down the checklist of all things you’d like to find in a home to 3-4 things that you absolutely must have in a home. Then, move onto things that would be nice to have. This helps narrow your focus and get beyond waiting for something perfect to come along.”
– Star Densford, an agent with Douglas Elliman Real Estate
Ask questions:
“The process of purchasing a home may seem daunting, but the benefits of homeownership far outweigh the stress. Find a real estate agent with whom you are comfortable with and do not be afraid to ask as many questions as possible about the process. Your agent is trained to have answers on anything from financing questions to, ‘When should I change the utilities into my name?’ Don’t be afraid to ask!”
-Priscilla May, an agent with Century 21 CARE