Wondering if it may be time to buy your first home? Take a look at this before you get started.
LINDSAY LISTANSKI NOV 3, 2017
As I approach my four year “homeaversary” I decided to take a moment to reflect on all that I had on my mind as my husband and I prepared to make the biggest purchase of our lives. Here are some of the things I wish I had known sooner that I hope will help you, or someone you, know on their journey toward home ownership.
You Don’t Pay The Agent’s Commission as the Buyer
So many first time buyers wonder, “do you have to pay a real estate agent if you are buying a home?” For some, the thought of having to shell out extra cash when they are already doing all they can to save for their down payment is enough to make them walk away from the entire process before they even get going. Many are surprised to find out that the answer is actually no. A home buyer does not pay their agent, rather the agent earns their commission from the seller side of the transaction.*
Focus on Your Monthly Mortgage Payment, Not the Entire Thing
Getting pre-approved for a mortgage is generally the first step you should take as a first time buyer. A common mistake that people often make is focusing on the total price of the home they can afford instead of the monthly payment they will be making. You may get approved for a $350,000 home, but this may not necessarily be what you can truly afford. Think of the amount your advisor suggests you can afford as a range. There is a high end and a low end and it is your job, not the mortgage advisor’s, to figure out what you are comfortable paying each month. It is crucial that you work with your advisor to understand how your down payment amount, credit, and the current mortgage rate affect your monthly payment.
Make the Jump!
To steal a line from Nike®…Just Do It™! From agonizing over the down payment to finding the “perfect” home there are a ton of moments in the first time buying process that are going to make you feel nervous. Know that it is natural and that similar to having a baby, there is never really a 100% perfect time. You are always going to wish you had more money in the bank, hope that the home had a backyard that was just a little bigger, or that you were just a little more sure what direction your life will be taking in the next 5-10 years. My advice: if you feel comfortable with the payment, love the location and “bones” of the house and will feel proud to make this house a home, then take the leap and don’t look back. That’s what we did almost four years ago and it was one of the best decisions we ever made.
*As with anything exceptions may apply. One example where this may change is a For Sale By Owner (FSBO). To be certain of what the payment structure will be, speak with your agent as soon you begin working to discuss payment/commission.