Buying Your First Home summary

You’ve probably heard that when it comes to real estate, the three essential rules are: “location, location and location!”

The neighborhood you choose has an impact not only on your quality of life, but also your home’s resale value. So, the easy choice is an area that suits your personality, gives you a good sense of well-being and also makes your everyday life convenient.

If you’re like most people, you don’t have millions of dollars lying around just waiting to be invested in real estate. But don’t worry, there are other ways to pay for your first house.

The most common, a mortgage, is a loan given for the express purpose of buying real estate. In such loans, the property acts as collateral for the money. So, if you take out a loan to finance your house and fail to make the mandatory payments to the lender, they can take possession of the house to recover their investment.

So, you’ve identified a few properties you’re interested in. What’s the next step?

Visit them!

Hypothetically speaking, if the home you’re about to move into was once a drug lab, would you want to know?

Well, while such information disclosures can be helpful, you should tend to approach them skeptically. In the United States, sellers are legally obligated to let you know about any important facts concerning a property, especially ones that may negatively affect its value. However, depending on where you live, such legal disclosures will be more or less detailed.

Real estate agents are experts at making total dumps look like lovely homes. You should always be on the lookout for the traps they set.

In fact, to get the maximum return on a property, sellers and their advisors will gladly give a home a quick and superficial makeover. The most common industry trick is to empty the place out and rent furniture, artwork and flowers to dress it up before you visit. It may be shocking, but these simple additions, known as staging, can increase the selling value by tens of thousands of dollars.

Do you have reservations about hiring an inspector to assess a property you’re in love with? Well, you shouldn’t – inspections are par for the course. In fact, purchase contracts often include a clause that states the buyer can pull out of the deal if he’s displeased with the findings of an inspection.

That’s why most buyers set up a general inspection to get an overview of a house’s condition. There’s also a secondary inspection often required by the mortgage lender: a pest inspection. That being said, this isn’t a legal obligation. For instance, in the United States, the buyer can decide the number, type and extent of the inspections they want to order.

Assuming you’ve found a place you like, that’s within your price range and for which you’ve been pre-approved for a mortgage, you’re ready to make an offer. Naturally, the trickiest part of this is deciding on how much.

To decide on this magic number, you have to strike the right balance: if you offer less than the seller expects, you’ll face rejection; if you offer too much you’ll be overpaying.