Top 5 Things First Time Home Buyers Should Know
I love working with first time home buyers in Utah. Being their guide through the entire home buying process is a great feeling. It makes my knowledge of the home buying process the most useful. Don't get me wrong - I love working with move-up buyers, downsize buyers, and relocation buyers as well. However, they don't need quite the same guidance that a first time home buyer does.
With that being said, let's get to the 5 things every first time home buyer in Utah should know...
You must know what price of a home you can afford before you start looking. Most first time home buyers in Utah start their search online. Go ahead and browse to see what is out there, but before you start walking through the homes in Utah, you should at least be pre-qualified. It's a bummer to see a home that you are dying to live in, and then find out it is not in your price range.
Better yet, get pre-approved for a home loan.
What is the difference between getting pre-qualified and pre-approved?
Getting pre-qualified for a Utah home loan is when you give the lender your information. They take your name, check your credit, ask about your job and how much you make, etc. With the information you give the lender, they can tell you the amount you may qualify for.
Getting pre-approved, however, takes the process a bit further. To get the pre-approval process going for a first time home buyer, you must provide the lender with proof of the information that you gave them. Items to have ready to give to the lender would be pay check stubs, bank statements, tax returns, etc. Once you are pre-approved, all they will need is a property to work with to complete the approval process. If too much time has passed, you may have to give the lender updated documents to show that nothing has changed.
Who should I call for a home loan in Utah?
To begin this process as a first time home buyer, I suggest finding a local mortgage lender. A mortgage lender can search several banks, loan programs, and interest rates to find a loan that is right for you. You may already know some mortgage lenders that you would prefer to work with, but the preferred method is to ask your real estate agent which lenders they work well with. Having a dynamic duo of real estate agent and mortgage lender makes the entire home buying process much smoother. To find out what mortgage lenders I work with contact me.
DO NOT CALL LISTING AGENT ON THE FOR SALE SIGN
A Utah listing agent is on the for sale sign because they are working for the seller. The seller has hired them to market their home as well as represent them in selling their home. I suggest that you find yourself a buyer's agent, especially when you are a first time home buyer.
What is a buyer's real estate agent?
A buyer's agent specializes in working for Utah first time home buyers. They represent your best interests throughout the home purchase.
What does a buyer's real estate agent do?
- They will educate you about buyer agency, outlining their fiduciary responsibilities to you, which include: Disclosures, Loyalty, Confidentiality, Obedience, and Accountability.
- A Utah buyer's real estate agent will save you time searching the market for an affordable Utah home that meets a first-time home buyers criteria.
- They will view homes with you and provide comparative market analysis.
- They will help you explore your financing options, so you make the best mortgage decision.
- A buyer's real estate agent will negotiate the best possible price for you and take care of all the documentation.
- They will also assist you in finding any home-related services you need. Directing you to an expert Utah home inspector, finding the best home insurance company, helping you order the right home warranty for your new home, etc.
So what does a buyer's real estate agent cost?
A buyer's agent costs you absolutely, nothing! A first time home buyer in Utah gets access to an experienced Utah real estate agent for FREE. How does that work, you ask? The home sellers pay the fee for both the listing agent and the buyer's agent. So find you a Utah real estate agent and tell them you are ready to buy your first home. They will walk you every step of the way to home ownership.
SAVE FOR A DOWN PAYMENT
It is a good idea to have some money to put towards your new home. Typically, depending on the loan program, you will need to have 3%-5% of the purchase price. If you have already spoken with a lender to get pre-qualified, they will be able to tell you how much of a down payment you will need to have for the Utah home purchase.
What if I don't have a down payment to put towards my first home?
Don't fret. There are loan programs that will allow first time home buyers 100% financing. In Box Elder County, we have a rural housing loan program and a Utah housing loan program that will allow 100% financing. However, you can't buy just any home with these loan programs. Each loan program has guidelines as to what the home must have in order to fit their specifications. Your lender and Utah real estate agent will be able to guide you.
What is the absolute minimum I will need to bring in to buy a home?
If you qualify for a Utah home loan that allows 100% financing, the bare minimum a first time home buyer would need to bring in to purchase the home could be as low as $500. This is usually the minimum you want to bring in for earnest money. Although I have seen as little as $100; however, times have changed, and most Utah buyers offer at least the $500 in earnest money.
What is earnest money?
The earnest money deposit is an important part of the home buying process. It tells the seller you are a committed first-time home buyer, and it will help to fund your down payment. When a buyer's offer is accepted by the seller, the buyer will then write the check to the real estate brokerage to be held in an escrow account. If all goes well, the earnest money will go towards your down payment or closing costs. However, if the purchase falls through, you can get your earnest money back as long as you have cancelled within your deadlines. Your real estate agent, should be able to keep you within your deadlines to ensure you don't lose your earnest money.
CONSIDER A HOME INSPECTION AND ASK THE SELLER FOR A HOME WARRANTY
What is a Home Inspection?
A home inspection is a thorough visual assessment of a home conducted by a certified professional home inspector. Home inspections usually occur before a home is sold, to reveal any issues that might become problems for the first-time home buyer.
Home Inspectors evaluate the systems and components inside and outside the home from foundation to roof top. Home inspectors further conduct a visual inspection of all accessible areas of the home and report on functionality, wear and tear, safety and maintenance.
I have seen the home inspection reports. They are very detailed and have pictures of any problems included in the report. To find out more about home inspections please visit one of our preferred contacts, Pillar to Post Home Inspectors.
What does a home inspection cost?
The cost of a professional home inspection is based on the size and age of the home. You would want to call your local home inspector to request a quote. Typically, when my buyers have chosen to get a home inspection it has cost between $300-$400.
What is a home warranty and why should I ask the seller for one?
A home warranty covers the repair or replacement of common home systems and appliances that fail due to normal wear and tear. Depending on the home warranty plan you choose, the plan could cover A/C and heater units, plumbing and electrical systems, and many of your home appliances.
When making an offer to purchase the home you have chosen, ask the seller to pay for a home warranty. The average home warranty costs around $400 and will cover you for a year. After that, you can choose to continue to pay for the home warranty or let it expire.
Having a home warranty has saved many new homeowners. No one enjoys buying a new home only to have the furnace go out after the first week. Especially being a first-time home buyer. You never know what might go out after you move in. Ask for the home warranty. To find out more about home warranties visit our preferred home warranty company's website, Landmark Home Warranty.
DON'T JUMP ON THE FIRST HOUSE YOU SEE
What I mean by this, is that I suggest you view at least 5 Utah homes before making your decision on which house you would like to make your home. When I say viewing homes, I am talking about actually walking through the homes in person.
How do I start my home search?
To start the Utah home search process, after you have been pre-qualified of course, I recommend beginning your search online. According to the National Association of Realtors®, 92% of buyers use the internet in some way in the home search process. Fifty percent of the home buyers used their mobile device.
Don't start your online search just anywhere. I have come across many first-time home buyers mentioning a home that they liked only to find out it was not for sale. This has happened because they were using a website that was not up-to-date. Use our property search to search all Utah homes and land. Our property search is linked directly with the multiple listing service (MLS) and has the most up-to-date information. Click here to start searching for your new home.
Search for properties that are in your price range and have most of the features you are looking for. Keep in mind that unless you are building your own home you mostly likely won't find everything that you are looking for in your first home. Figure out your needs versus your wants, and search based on your needs.
I am ready to view homes in person, what should I do?
So, you have found the homes that interest you most. Now it is time to take a walk through these homes and see if there is one that you can see yourself living in. Call your buyer's agent NOW! (We are your preferred Utah real estate agents, right? Our contact information is found below- we also text if you prefer.) Have your agent set up a time to see the homes that interest you, and view the homes in person.
Once you have found the home you want to invest in, your professional real estate agent will be able to walk you through the entire buying process. Buying your first home doesn't have to be stressful when you have a good agent to guide you.
Please remember, that many first-time home buyers are nervous and scared of the idea of a house payment, and sometimes the entire process, really. This is completely normal. Your lender won't allow you to borrow more than you can afford, and your real estate agent is there to answer your questions every step of the way.
To sum it up
So in the end (or shall I say beginning) I recommend you find a Real Estate agent first. If you are looking to buy in Northern Utah you can give us a call at 435-225-5200. If you are searching for a home in another location, email us, and we can refer you to a great agent in that area.
Once you have found a Real Estate agent, let them know you are a first-time home buyer and you would like them to recommend a mortgage lender to you to get started. The agent should be able to walk you through the rest.
Have you been through the ups and downs of first-time home buying? Comment below about your experience. The good, the bad, and the ugly.
Additional Helpful Articles For First Time Home Buyers
- Major Money Mistakes to Avoid as a First-Time Home Buyer via Bill Gassett
- Five Mistakes to Avoid When Buying a Home via Keith & Kyle Hiscock
- Guide for First-Time Home Buyers via Ryan Fitzgerald
- Why Do I Need to Get a Mortgage Pre Approval? via Lynn Pineda
The above article Top 5 Things First-Time Home Buyers Should Know was provided by Angela Duong. Angela can be reached at firstname.lastname@example.org or by phone at 435-225-5200. With over 10+ years experience, if you're thinking of selling or buying, I would love to share my marketing knowledge and expertise.
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Angela Duong is a Realtor® assisting buyers and sellers in Northern Utah. Particularly in the towns of Bear River City, Bothwell, Brigham City, Corinne, Deweyville, Elwood, Fielding, Garland, Honeyville, Howell, Mantua, Perry, Plymouth, Portage, Riverside, Snowville, Thatcher, Tremonton, Willard, and it's surrounding areas.
"You can't go wrong using Duong!"