First-Time Home Buyer’s Guide
August 24 // à la Zoe Williams
Top Zara | Skirt Urban Outfitters (similar skirt here) | Shoes Schutz (no longer available)
It has officially been one year since Jimmy and I purchased our first home! We’ve (thankfully) come a long way since the days of having our bedroom in the kitchen and showering at the gym. Now that we’re settled, I wanted to share some tips we learned along the way because, quite honestly, the home-buying process was VERY emotional — I'm talking equal parts stress and excitement.
P.S. In the next few weeks, I’m going to share more about our journey with our first home, including bathroom renovations and what we have planned for the future! (Follow us on Instagram to stay in the loop.)
What’s Most Important
Prioritizing your wants and defining what’s most important to you will set you up for success when looking for your first home. Here are a few basic considerations:
Price + monthly payment
Location (think school district, safety, distance to things you love, commute to work etc.)
Resale or build
Square footage
Number of bedrooms/bathrooms
Are you willing to do renovations?
Size of the lot/yard
Home features (Decide what you aren’t willing to compromise on - updated appliances, hardwood floors, kitchen or bathroom style, exterior of the home, garage, etc.)
Everyone’s wants are different, and this list only grazes the surface, but I recommend taking time to really think about this prior to starting your search. Doing so will help you narrow down options and make your search less overwhelming.
Price and location were #1 for Jimmy and me, so we compromised on square footage and went for a smaller home in an area we loved.
Jimmy and I agreed an open floor plan was a non-negotiable.
Buying Power + Monthly Payment
Understanding your buying power and your ideal monthly payment is extremely important. My taste is definitely Veuve Clicquot, but we were on a White Claw budget, so I knew I needed to determine what was realistic before we started looking in order to avoid setting myself up for disappointment.
First things first, what’s buying power?
Buying power is a measurement of your ability to buy property that’s determined by your debt to income ratio (or DTI.) Your DTI is based on how much income you bring in versus how much monthly debt you have. Your DTI will tell you what loan amount and monthly payment you can afford. Use this calculator to get an estimate of your buying power.
Once you know your buying power, you can decide the maximum monthly payment that works for your budget (I recommend sticking to this and – no matter how tempting it is – not getting emotional when putting in an offer.)
You’ll also want to know your credit score, as this effects which loans you can qualify for and the interest rate you’ll receive (the better your score the better the rate.) If your credit score isn’t quite where it needs to be, think of this as an opportunity to work on it!
Bring in the Experts
Ready to get serious? Once you’re ready to roll, you’ll want to get pre-qualified with a lender and find a realtor. I suggest finding a realtor that is particularly familiar with the area you want to buy in. They might know of listings that haven’t hit the market yet and can give you a serious edge.
Ask friends for recommendations on who to work with, and, if you already have a realtor, see if they have a preferred lender. It’s nice to have a team that’s in sync throughout the process. Also, be prepared. You’ll need to have a lot of financial paperwork together for the process. Your lender can guide you through this as well as which loan options are best for you!
The Search is On
Once you’ve started your search, here are some overall tips I have found to be helpful!
Be aggressive. Stay on top of the MLS listings your realtor sends you and be quick to schedule time to see homes you’re interested in (they go quick.) Save searches on Zillow or Realtor.com and have updates sent directly to your e-mail. Ride around the area you want to purchase in and check for signs on homes that are soon to hit the market.
Looks can be deceiving. Go to open houses (a lot of them) even if the home doesn’t look like something you’re interested in. It’s good to get a feel for what’s available in the area and in price range you are looking for!
Get real. Your first home probably won’t be your dream home, and that’s okay! Little changes can make a big difference and can happen over time, like switching out light fixtures or knobs on drawers.
Be creative. The market is competitive right now, and this probably won’t change anytime soon. Ask you realtor about things that can give you an edge when you put in your offer. For example, you can put in the asking price for the home, but offer money up to a certain amount for things that come to light during the home inspection.
Stick to your guns. When you put in an offer, know the maximum price you’re willing to pay and stick to it. It’s easy to get emotionally attached and go wayyyy above asking price when competing with other buyers. Don’t do it, you will find your dream home and don’t want to overpay (your home is an investment - be smart!)
I hope this has been insightful. Feel free to comment below on any additional questions you have. I would love to hear and help any way I can! Xx!
- Zoe