1st Time Homebuyer Prep Tips in this Crazy Market

Are you a first-time homebuyer who is overwhelmed by the current crazy state of the housing market? 

I don’t blame you. Buying a home for the first time can be scary, but in a market where your offer is going up against 5, 10, 20+ other offers, it can be extra intense. 

The best thing you can do is to be prepared as possible and understand that this process is going to be anything but simple. Here are a few things that I help my clients do to get prepared for buying a home for the first time:

1. Get pre-approved. I wouldn’t even suggest looking at homes online or in-person before you get pre-approved. Getting pre-approved means filling out an application with a mortgage lender to see if you would have a good chance of getting an approved mortgage if you were to find a home, make an offer, and have your offer accepted. Keep in mind that you may not get pre-approved the first time you try, and that’s okay. Knowing where you stand is the first step so you can make and execute a plan that gets you into a home when you’re ready.
2. Know what you can afford for your monthly payment. Shopping for dream homes on Zillow can be a ton of fun, but make sure you’re talking to your mortgage lender about what a $350,000 mortgage means for a monthly payment. Online calculators often do not take into account your specific situation (down payment, credit score, etc) or include homeowner’s insurance or property taxes. So, get a clear understanding of what you can afford monthly so you can shop with confidence. 
3. Know your max purchase price. This is especially important for the hot market we’re in now because a lot of buyers are going to have to offer more than what is being asked for a home’s sale price for their offer to be considered. So, if a home goes on sale for $200,000, chances are there’s going to be quite a few offers coming in and your realtor is going to suggest you offer more than $200,000 to be competitive. If $200,000 is the max amount you can afford, you might be wasting your time writing an offer and have better luck looking for homes around $180,000, so you know you can offer $200,000 if needed. 

Knowing these things can be extremely helpful, but really, just understanding that this is going to be a wild ride and it’s going to take a lot of work and patience is the best thing for you. 

It may not be easy, but believe me, buying a home for the first-time in this market can still be done 🙂