For first time buyers, buying a home can be both very exciting and pretty frightening. For many people, it’s the realization of a dream., but because it’s their first time, it can also be stressful and frightening – it’s a new and intimidating experience. Knowing a few things beforehand, though, will increase the excitement and exhilaration and decrease the stress and fear. And that’s the purpose of this advice for first-time buyers in Chicago.
Know Your Goals
Our first piece of advice for first-time buyers in Chicago is to know, understand, and be clear about your goals. (Actually, this is good advice for anyone considering any major undertaking or transaction.) Having a firm grasp on your goals – short-, medium-, and long-term – is essential for preventing disappointment and financial disaster.
For many people, their short-term goal is simply to get out from under the wasteful burden of rent payments. But first-time buyers in Chicago really need to examine their home-ownership goals far beyond that. Do you, for example, plan to live in the home for a long time, or will it be just a starter house for you? Are you purchasing the house primarily for investment purposes or as a home to pass on to children?
Figure Out What You Can Afford
First-time buyers in Chicago often jump into house hunting – and even buying – without knowing what they can really afford. And this can be a costly, life-impacting oversight.
Although you may be able to qualify for a $250,000 mortgage at your bank, you may actually be able to afford just a $150,000 home. Affordability is determined by much more than just the sale price. You absolutely have to take into account all your other debt and recurring monthly payments. And don’t forget to factor in all the other costs of buying and owning a home, such as closing costs, mortgage and title insurance, agent fees, property taxes, home owner’s insurance, and so on.
Be Clear About the Mortgage
Another thing first-time buyers in Chicago often neglect is the crucial task of knowing how much mortgage they can qualify for early on in the process. You can waste a lot of time, effort, and gas searching for and looking at houses that are actually beyond your financial reach. The best course, then, is to get pre-approved so you can avoid this waste, as well as the possible embarrassment of making an offer you can’t make good on.
Be Prepared for the Process
Buying a home can be a very lengthy and complicated process. First-time buyers in Chicago need to be prepared for the process and the many hoops they’ll have to jump through.
First, there’s the process of negotiating after you’ve made an offer. You’ll want to try to get the best deal you can with some of the closing costs paid and necessary repairs done. This is a process that will likely involve offers and counter-offers and counter-counter offers and so on till you reach agreement’
Then, before the bank will put a check in your hand to hand over to the seller, there will have to be an inspection. After all, your bank has to protect their investment by making sure the house has no major problem. But if the inspection does turn up problems, you’ll have to head back to the negotiating table to try to get the problems fixed or the sale price reduced accordingly.
Buying a home. then, doesn’t have to be as intimidating as it seems for first time buyers in Chicago. Just keep in mind, though, that this advice will only get you started. There’s much more to know and do. That’s where a qualified real estate professional can be a big help.