Tips for a First-Time Home Buyer
The reality is, it didn't exactly happen overnight. First-time homebuyers start the search long before most even realize it.
The National Association of Realtors reported in 2017 that 37% of all homebuyers were first-time homebuyers. That's the highest percentage share reported in four years. Here's what you can expect from your home shopping experience.
Benefits for a First-Time Homebuyer
You've been hearing from friends and family that you should buy a home. So, by now you have likely already weighed the benefits and decided that homeownership is the best decision for you. That's a major hurdle now passed.
Who Are First-Time Homebuyers?
Many first-time homebuyers are millennials, aged 34 years and younger. A survey completed by NerdWallet in 2018 shows that 49% of all millennials plan to buy a home over the next five years.
A first-time homebuyer is defined as a buyer who has not bought a home over the past three years. In that sense, bounce-back buyers, those who had a short sale or foreclosure, are also entering the marketplace. A CoreLogic report says about one-fourth of all foreclosure and short sale homeowners are back in the market, and those numbers average about 150,000 per year.
Defining Search Parameters for a First-Time Homebuyer
Almost 95% of all home searches today begin on the Internet. With just a few clicks of the mouse, homebuyers can search through hundreds of online listings, view virtual tours, and sort through dozens of photographs and aerial shots of neighborhoods and homes. Spend some time defining your goals and have a pretty good idea of the type of home and neighborhood you want. By the time you reach your real estate agent's office, you are halfway to homeownership.
How Long Should It Take to Buy Your First Home?
In seller's markets, an agent may only show buyers one home. A few buyers will look for years, but buyers who do that aren't particularly motivated. A motivated buyer will generally find a home within two weeks.
Many buyers find a home within two days. Good real estate agents will listen to your wants and needs and arrange to show only those homes that fit your particular parameters. Your agent, if they have time, might preview homes before showing them to you as well.
How Many Homes Will a Homebuyer Visit?
In an average market, the typical number of homes agents show to a buyer in one day is seven. Any more and the buyer's brain will be on overload. Therefore, don't expect to see 20 or 30 homes in one day or one weekend. Although it's physically possible to do so, you probably will not remember specific details about any of them.
The "Red Shoes" Experience for a Homebuyer
This experience happens to many first-time homebuyers. Say that you need a new pair of red shoes, so you go to the mall. At the first shoe store, you find a fabulous pair of red shoes, and they fit perfectly. Do you buy them? Of course not! You go to every other store in the mall trying on red shoes until you are ready to drop from exhaustion. Then you return to the first store and buy those red shoes. Do not shop for a home this way. When you find the perfect home, buy it.
How a First-Time Buyer Can Rate Homes
Record the details of each home you visit so that you can review them once you return home. You'll just need to follow a few steps:
- Bring a digital camera and begin each series of photos with a close-up of the house's address number to identify where each group of home photos start and end.
- Take copious notes of unusual features, colors, and design elements.
- Pay attention to the home's surroundings. What is next door? Do two-story neighbor homes tower over your single story?
- Do you like the location? Is it near a nice park or a dingy power plant?
- Immediately after leaving, rate each home on a scale of 1 to 10, with 10 being the highest, and add any relevant notes.
View Top Choices a Second Time Before Buying
After touring homes for a few days, you will probably instinctively know which one or two homes you would like to buy. Ask to see them again, and you will see them with different eyes and notice elements that you might have overlooked the first go-around.
At this point, your agent should call the listing agents to find out more about the sellers' motivation and to double-check that an offer hasn't come in, making sure these homes are still available to purchase.
Making the Buying Selection
Your agent may generally know which home you are going to choose, due to experience and intuition. However, make sure that you don't feel your agent is trying to steer you toward any specific property, and choose the home without interference from the agent because it's your choice as the buyer alone to make. Keep in mind, however, that real estate agents are required to point out defects and should help buyers feel confident that the home selected meets the buyer's stated search parameters.