Buying a home can be a particularly stressful, and time-consuming process. Buyers may learn through experience some valuable lessons for buying a home. Here are 5 useful tips for first-time homebuyers to consider when entering the real estate market.
#1 Get your documents in order
To apply for a home mortgage, you will need income and tax documents. Typically, lenders will ask you for 2 recent pay stubs, 2 previous years’ W-2s, tax returns, and the past 2 months of bank statements. Having these documents in hand will save you a lot of time when buying a home.
#2 Watch the market
Stay up-to-date with the housing market on both a national and local level. Just like the stock market, timing is key in the real estate market. If inventory is decreasing, it may be best to buy a home quickly before more buyers enter the market and spark a bidding war. If there are clear signs that the market is unstable in the area, you may want to wait or look for a home in a different city.
#3 See if the HOA contract allows renting
It is common for homeowners to have the long-term goal of renting out the property when they decide to move. It can be a big disappointment to find out after you buy a home that your neighborhood does not permit rentals. Make sure to check the homeowner’s association contract before buying a home if this is your goal. Here in Bozeman, for example, the city has a temporary ban on short-term rental permits in its historic neighborhoods
#4 Read the ENTIRE contract
Buying a home will be one of the most important, and obviously expensive, purchase in your life, so don’t overlook or ignore the terms of your contract. If there is anything you don’t understand, ask your mortgage broker and your real estate agent to clearly explain the terms to you.
#5 Meet the neighbors
You might forget that you’re not just buying the house, you’re buying the neighbors too. Have you watched the movie Neighbors? Don’t end up like Mac (Seth Rogen) and Kelly (Rose Byrne) and wait until after buying a home to find out that your next-door neighbors are a bunch of college kids who throw wild parties every night.