Buying a house is probably the most significant investment you are ever going to make. Buying a home means taking on a considerable loan, as well as all of the care and maintenance of the structure and the property. It is a huge commitment, but it is also highly rewarding. The personal accomplishment of buying a house, of owning something, is a step many people are excited to take. However, if it is your first time buying a home, you may be feeling apprehensive about the whole process.
Here are a few things you should know before buying a house.
Types of Mortgage Loans
You can get several different types of loans to buy a house, and knowing the difference between those loans will allow you to feel more confident in your decision-making. There are traditional mortgage loans that you get through traditional lenders. This includes VA loans, FHA loans, and conventional loans. There are also other types of loans like hard money loans or soft money loans. You may be wondering, what are hard money loans? A hard money loan is a loan through a private lender for properties listed as cash only. This is most common with investment properties, so if you are looking for a personal residential property that you can fix-up, you will likely be looking at what are considered investment properties because they need work to be livable.
Expensive Repairs
When looking at properties, you need to be aware of what the expensive repairs are going to be to determine how much of an investment you are going to be making. For example, roof replacement, windows, siding, and HVAC systems will be expensive projects. As a new homeowner, you need to know what needs to be done to make an educated decision about whether or not you can afford the house. If, for example, you see the house is going to need a new roof, you can get estimates from a roofing contractor before bidding on the house. You can talk to the roofing contractor about roofing materials and the price difference between asphalt shingles and a metal roof. While they are there, you can also get information about the chimney, skylight, underlayment, or anything else that may concern you before buying the house.
Negotiating
Before buying a house, you should learn a little about negotiating and talk to your realtor about their approach. The asking price for a home is just that: an asking price. It is not abnormal to offer a price that is below the asking price. It is also not strange to ask for conditions on the sale. For example, you may offer the asking price to replace the windows first or cover the closing costs. You may request they pay for the inspection or offer less than the asking price and waive the inspection. You can negotiate with many factors when buying a house, and your realtor can help you get a better understanding of what your options are. You will not be negotiating directly with the sellers, and the meetings will be between the two real estate agents.
A house is a significant purchase, so you want to understand how the loans work, what repairs will need to be done, and the best tactics for negotiating the purchase before you place a bid on a property. You don’t want to go through with a purchase and then realize you made a poor financial decision for one of these three reasons. You want to save money while also getting what you want in the house and the property.