The Basics of Home Buying
By: Serena Patel
As a first-time home buyer, I didn’t know where to start, what to ask or look for throughout the process. After a long six months, I’ve somewhat figured it out and am here to share what I’ve learned with you!
So, where to begin?
First, I found an agent. I asked friends and family who recently bought a home to see if there was anyone they recommended. My agent was instrumental from start to finish. She provided great information, asked the right questions when I didn’t know what to ask, showed me what to look for (and look out for), and ensured all people associated with the process were on top of their individual duties (lawyer, title company, etc.).
Agents don’t cost anything to buyers. An agent is paid a percentage of the sales price by the seller during the closing. This made me a little skeptical because it seemed like a conflict of interest. Why would an agent prioritize a buyer's best interest when they make more when the sales price is higher?
Find a “buyer’s agents,” who are agents that are legally bound to keep a buyer’s best interest in mind.
But also, be aware. If you want to low-ball the price, do it. If you are negotiating with the seller and the price is above what you’re comfortable with, don’t do it. You will find another home. Don’t feel rushed by your agent to jump into something you’re not sure of or pay more than you are comfortable with. Take your time.
I personally felt my agent went above and beyond, so if anyone is looking for an agent in Chicago, please contact me personally and I can give you her info.
On that note, do your own research. Narrow down the areas you want to live in based on aspects that are important to you - commute, schools, food, and drink, etc. Google statistics about the homes in those areas. Understand the average price per square foot is, recent market trends, the future of the area, interest rates - the list goes on! Your agent may present you with this information, but you need to do this yourself as well. This is the one-time you need to do your own homework.
Know what you can change vs. what you can’t change. This is crucial. Don’t scratch an option off the list because of cosmetic imperfections or things you don’t like. Remember that you can change those things (flooring, paint, etc.). What you can’t change and should weigh your options by is size, location, and layout.
Last (for this article at least), understand the costs of buying. I may do a whole article about this because the costs associated with home buying are both important and shocking. As a buyer, you may have to find a mortgage lender and compare interest rates - shop around. Some other costs you may not have considered include the closing costs of a home inspection, lawyer, appraisal fee, credit report, title fees, recording fees, transfer taxes, homeowner’s insurance. This can add up to over $10,000 on top of your purchase, so do not put everything you have into the down payment or the price of the home because you may have upcoming or unexpected expenses in the near future.
Again, this barely scratched the surface of the process of home buying, but it was a start. Hopefully, you’ve learned something. Please comment below with questions you have or things you’d like to see in upcoming related home buying articles!
Please comment if you’re interested in reading future articles about:
What to Look for When Checking out Condos
Dissecting the Expenses of Buying a Home