Buying your first home is often the single most important purchase you can ever make. Making the right purchase could have you and your family set for years and allow you to make even more acquisitions in the long run. Making the wrong decision could end up putting you in debt indefinitely, and turn into a financial black hole. But, with the right team on your side, and an understanding of the fundamentals, you’ll be able to make a sound decision and avoid disastrous mistakes. Here are some of the do’s and don’ts of buying your first home.
Do - Understand Your Credit Situation
You first have to make sure that your credit is in order before you do anything. This will influence how much money you may have to put down, how much you should be expecting to pay, and if you’re even eligible.
Request your free annual copy of your credit report from all three credit bureaus: Experian, TransUnion, and Equifax. Check if everything is in order. Make corrections if necessary and make repayment deals where payments will be reported to these agencies. Don’t take them by their word either; make sure that it is written down on paper.
Don’t - Not Considering Income Property
For some people, the first home they buy should automatically be a family house. Blame it on the whole white picket fence thing. But, have you and your family thought about income property?
There are many benefits to going with income property as your first choice. For one, you can always enjoy a great quality of life, even if you share the building with other tenants. But more importantly, these tenants will help you pay for your mortgage. And once the mortgage is paid off, you’ll then be able to use this asset as collateral to negotiate your next deal, which can be the single-family house you always wanted or another income property.
Do - Work with a Title Company
While in most cases, transactions go smoothly without issues, title issues do happen and can have serious repercussions. For instance, the property may have outstanding tax payments that need to be made. In other cases, there might be issues with successors or undisclosed owners. Or there may be some forgery.
This is why it’s essential that you work with a title company to make sure that there’s nothing wrong with the title. A company like Bay Title Company will be able to run a title search, but also offer title insurance. Title insurance will cover you for the price of the purchase in case any issues are found after the search.
Don’t - Let Emotions get in the Way
Some people fall in love too fast with a property. Others are too picky because they had a specific idea of their dream home and always think that it is somewhere out there.
Dream houses rarely become a reality, unless you build them, so you’ll have to be ready to make some compromises. The chances of you finding the perfect house in the perfect neighborhood at the perfect price are slim to none, so focus on your needs more than your wants.
Now that you know a bit more about shopping for your first house, make sure that you take your time and do your research and due diligence. Also, make sure that you work with the right people, and make sure that all your bases are covered before you sign anything.