Buying a home for the first time can be a daunting experience. While there is so much information at your fingertips, the sheer amount can seem overwhelming.
Where do you even start? And do you have to be pre-qualified for a mortgage before you can begin looking?
While this is a huge step to take in any person's life, buying a home for the first time is also incredibly exciting.
If you are ready to be a first-time home buyer in St. George, Utah, there are a number of important questions you should be asking. To learn more about them, just keep reading...
Finding a High-Quality Realtor(R)
First thing's first, if you're buying a home for the first time, you'll want to find yourself a high-quality Realtor(R).
And yes, you will also need pre-qualification for a mortgage. After all, you don't want to stumble upon your dream home and find yourself in a financial pickle.
When securing yourself a Realtor(R) who can guarantee you a solid deal on your first home, it's important to keep these considerations in mind:
- Are They a Fully Licensed Realtor(R)?
Fully licensed Realtors(R) must complete educational qualifications and undergo criminal background checks.
Along with this, they must maintain their license by completing updated educational qualifications.
Fully licensed Realtors(R) are also overseen by a governing body which ensures they adhere to certain regulations and protocol. This licensing ensures they offer the best possible service for both home buyers and sellers.
- Is Real Estate Their Full-Time Job?
This is important because you want to ensure your Realtor(R) is committing 100% of their time and energy into finding you the best home for your needs.
Additionally, full-time Realtors(R) are more likely to have an in-depth knowledge of the market. Essentially, they are more likely to be there for you when buying a home for the first time.
Now, when it comes to making a final decision on buying a home for the first time, here are some important questions to ask...
The Top 10 Questions to Ask When Buying a Home For the First Time
1. What Type of Neighborhood Do I want to Live In?
This is probably the most important question to ask when buying a home for the first time. The neighborhood you choose is a big deal. Ultimately, your neighborhood pre-determines your lifestyle. Fortunately, St. George has many wonderful neighborhoods to choose from, but you'll still want to choose one that fits your needs.
If you have children, the neighborhood will determine where they grow up, go to school, etc. You may want to choose one with other families with children so your kids have friends to play with.
It's important to consider things like work commute (although it's a pretty small area), local amenities, shops, schools and the look and feel of the neighborhood.
Write down a list of the most important aspects you are looking for in a neighborhood and go from there.
2. What Can I Do to Streamline the Home-Buying Process?
The entire process of buying a home for the first time will become far more streamlined if you outline the type of home you're looking for.
What are the main features you are looking for in your new home? A large garden, a pool, how many bedrooms, the size of the garage?
It's extremely important to remember the 85% rule. Try and find a home which satisfies 85% of what you're looking for while sacrificing the other 15%.
3. What is the Home's Purchase Price Based On?
It's important to gauge what other homes in the neighborhood are sold and bought for. There is no use making an offer on a new home based on other neighborhoods you may have previously viewed.
The offering price you make needs to be relevant to your local area and the homes within that area. Keep that point in mind when making your offer!
4. What Is the Current Condition of the Home?
In other words, does the home need much work or repair done to it once you've signed the dotted line?
You have every right to ask about estimated costs on repairs and whether the owners have deducted those costs off their offering price.
It's important not to assume repair or maintenance costs have been automatically deducted from the price. Be prepared to potentially foot this bill!
5. How Long Has This Home Been on the Market?
You are likely to receive a discount on a home which has been on the market in a decent suburban area for longer than 90 days.
But this largely based on the local real estate market in the area and must be discussed with your Realtor(R) and the sellers.
However, homes located in outlying rural areas can sit on the market for up to 360 days without a discounted price.
6. What is the Cost of the Down Payment?
All-too-often this is a make-or-break factor when buying a new home. It is one of the most important considerations to take into account when it comes to your budget.
The down payment cost comes from your own pocket and is not covered by your mortgage loan.
Generally, you'll need to supply a minimum down payment of 5% of the total asking price, but proof of mortgage loan insurance is essential.
If you are looking at taking out a conventional mortgage, you will need to provide a 20% down payment for your new home.
7. What is Mortgage Loan Insurance?
If you place a down payment of less than 20% on a new home, proof of mortgage loan insurance is mandatory. When a down payment amount is low, this automatically puts you in a ''high risk'' mortgage bracket.
Basically, this insurance is necessary in case you fail to meet your monthly mortgage payments.
Typically, insurance fees range from 1-3% of your total mortgage amount, but also depend on your percentage of down payment.
8. Are There Any Legal Fees and What Do they Cost?
Most of the time there will be legal fees involved in purchasing a new home.
A property lawyer is essential in completing proper documentation and registration of the property. They also register your mortgage and register you as the new owner of the property.
The cost of legal fees varies and is based on the type of property and the neighborhood.
9. Have Property Taxes Already Been Paid?
Taxes, taxes, taxes! This is the reality of becoming a new homeowner. Property tax is based on the value of your home and is charged by the local municipality.
If the previous owner has already covered these taxes once the house is sold to you, you will have to pay them back this amount.
10. How Many Previous Offers Has the Seller Received?
This is an important question as it helps you to gauge whether your offer will have any strong competition.
Don't be intimidated by the number of offers your potential new home has received. Instead, use this as leverage for your own offer.
If there are already multiple offers on the table, don't back out as it's the final offer which normally seals the deal!
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