Things to Remind First-Time Homebuyers

First-time homebuyers are eager to rush into business, but homebuying can be a leap into the unknown. Realtors® can help them on their buying journey by providing insight. Here are some tips and pieces of advice to give first-time homebuyers:

Forget What You See on TV

“My advice is to turn off the TV,” recommends 2022 PAR President Chris Beadling. “Turn off ‘Good Morning America’ and others telling you this is the worst time ever to buy a home because mortgage rates are up X%. Turn off HGTV telling you that you shouldn’t buy a home unless you can pull a 100% return in 24 months.”

Similarly, PAR First Vice President Bill Lublin adds, “Even if your first home is a starter home, it will help you buy your next home, and that home will help you buy the one after that. Only on HGTV is your first house your ‘forever home.’”

Buy the House, Not the Rate

“Any way rates fluctuate; the buyer stops spending money on rent and can begin building equity. If the rates go up, you’re brilliant because you got a better rate. If they go down, you can refinance to get a lower rate. And if they remain the same, you can still benefit by building equity over time. Waiting for rates to drop to buy a home is like trying to catch a falling knife,” Lublin said.

Get a Home Inspection

Home inspections will help ensure the safety of a potential home. Knowing any issues the home may have will let buyers know they know what they’re getting themselves into, and it will help them make an informed decision. PAR Treasurer David Dean stresses the importance, “Even if it feels like a way to differentiate your offer, forgoing a home inspection may lead to more problems than you expect down the road.”

Take Your Time and Think Ahead

“Too often, the first-time buyers are considering their options and reviewing closing costs on the day they are submitting their offer,” says PAR President Al Perry. “It’s a lot to comprehend and often they feel pressured to make a quick decision to get an offer in during this short inventory market.”

“I recommend first-time buyers sit down with a Realtor® at the beginning of their search to review the options in our Standard Agreement of Sale so they can consider their options before a house hangs in the balance,” Perry continues. “This way buyers understand the full financial impact of a potential transaction. Front loading this process educates the buyer and gives them an opportunity to digest the information while there is plenty of time to do so!”

Lublin also advises first-time buyers to think ahead financially. “Take the highest payment you’re able to,” he says. “Your income will typically increase over the years, while your fixed-rate mortgage stays the same, in effect shrinking over the years.”

Be Flexible

2023 PAR President-Elect Preston Moore says, “First-time homebuyers may have to compromise on their must-haves and realize that owning a home is the best way to generate wealth. Even though you can’t get everything you want today, don’t give up.” Lublin adds, “Buy for your current needs. If your needs change, you can always use the equity you build to buy something else.”