5 Real Estate Tips for Millennial Homebuyers
If you’re a Millennial, you might think you’re not ready to purchase your first home just yet.
And who can blame you? Fresh out of college and saddled with debt, you probably think you need to pay off all your student loans before a lender will even consider approving you for a mortgage. Right?
But as it turns out, that isn’t necessarily the case.
Sure, buying a house is a big financial commitment. But renting isn’t exactly cheap, either. Indeed, while renting a two-bedroom apartment in Greater Charlotte can easily set you back as much as $1,200 a month, you could own your own 4-bedroom house for the same monthly commitment or even less.
With this in mind, you should at least consider the possibility of purchasing your own home.
Butt before you rush off to look at properties, here are five things you need to know about buying your first home.
1. Talk To A Lender First
While you might think you wouldn’t qualify for a loan, you’ll never know for sure unless you actually talk to a lender.
Speaking with your bank before you start house-hunting is the smart thing to do, because it gives you an idea of how much house you can afford and helps you determine your price range. You can also discuss how much you’re comfortable spending on mortgage repayments each month.
Most importantly, you can ask to be pre-qualified by your lender. This shows sellers you’re serious and proves that you can actually afford to purchase the property.
2. Know Your Strengths
Price is an important deciding factor for sellers, but it isn’t the be-all and end-all of a real estate sale. Some sellers might be prepared to accept your offer even though it’s lower, simply because the transaction will be a lot smoother and less stressful.
Let me explain.
If prospective buyers already own a home, they usually need to sell it first, as otherwise they won’t be able to afford the new purchase. For this reason, they make their offer contingent on selling their current home. This is risky for the seller. If the buyers can’t sell their current property, they can walk away without facing any legal repercussions, leaving the seller high and dry.
You, on the other hand, don’t currently own a property, so you don’t present this risk. This puts you in a position of strength.
3. Keep Closing Costs In Mind
There’s more to buying a home than just paying the sale price. Sealing the deal – or closing – also costs money, and this can add up. Closing costs include:
- mortgage application and processing fees
- appraisal and inspection fees
- attorney’s fees and taxes
But while closing costs are an inevitable part of purchasing a property, there are ways you can keep them to a minimum. This doesn’t make you any different from other home buyers on the market. After all, everyone wants to get the best deal possible at the lowest price.
Get quotes from different lenders and compare them to see which offer is the most worthwhile. Alternatively, ask the lender you like best to match fees offered elsewhere. Lenders, insurance, and other service providers are all in competition with each other, so they may match the price or at least consider lowering it so as not to lose your business.
More to the point, a savvy Realtor® can help you find ways to save money on closing costs. They will also come in handy for other reasons, which is why speaking to a Realtor® is next on our list.
4. Speak To A Realtor®
Even though a Realtor® isn’t strictly necessary to purchase a property, the importance of having a good one in your corner really cannot be underestimated.
While you’ll probably buy two to three properties in your lifetime at most, Realtors® deal with real estate transactions every day. Given the complexity of the transaction (and with so much money at stake), it makes sense to have someone who does it regularly guide you through the process and make sure your best interests are protected at all times. Buying your first home shouldn’t be a guessing game.
More importantly, a good Realtor® will help you get the lay of the land before you even start looking at properties. Which brings us to the next point.
5. Be Prepared
You should contact a real estate professional as early as possible; ideally before you even decide to start looking at properties. Speaking to a professional will help you better understand the process and set realistic expectations.
What’s more, being prepared also means you can deal with any issues – repairing or building your credit score, for instance – before they arise. Because you wouldn’t want to get your heart set on a home, only to learn you can’t have it. Right?
Don’t be too proud to ask. A great real estate agent will help you create the roadmap to where you want to be.
Need help buying your first home? Talk to us today.
About the Author | Ben Lastra
Buyer & Listing Specialist Broker / Realtor® NC/SC
Ben’s passion for Real Estate sparked after his experiences buying and selling his own homes. After his experiences with other Realtors, he decided that he wants to be the Realtor that provides his clients with the best experience possible. Ben believes that communication is one of the most vital components to a successful real estate experience. He feels his job is to be available to answer his client’s questions, concerns, and ensure that their voice is heard.
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