Every homebuyer faces a few hurdles along the way, but first-time buyers seem to have the most. Their inexperience, combined with a crowded market and sometimes time-consuming mortgage process, can make homebuying significantly more difficult for these new buyers.
Fortunately, if you’re a first-time homebuyer, the process can go smoothly. Simply study up on the all-too-common hurdles below and be prepared for the road ahead. You’ll find the perfect home in no time.
- The Down Payment – In general, you’ll want to aim for a down payment of 10 to 20 percent of the home’s price, but it’s possible to buy a home for as little as 3.5 percent down. For a $200,000 home, the down payment would range between $7,000 and $40,000, depending on how much is put down. For a first-time homebuyer, these numbers can be pretty daunting. Sure, you might have a little savings in the bank, but you may need to spend several years saving up for your down payment. It takes an average of 12.5 years to save up a 20 percent down payment, according to real estate data firm RealtyTrac.
- The Wish List – Many first-time homebuyers come into the process with a checklist of features they want in their home. It is rare to find a home that has every single feature you’re looking for at a price you can afford. Most buyers will need to make a few compromises along the way in order to find something they love, while also keeping on budget.
- Supply – There’s a big supply problem when it comes to U.S. real estate. They’re just aren’t that many homes on the market, and this can make it difficult for first-time buyers to find properties that meet their needs and fit their budgets. It may prolong the buying process, as buyers are forced to wait until the right home hits the market.
- The Home Inspection – Home inspections are a great tool for first-time homebuyers, shedding light on potential problems, necessary repairs and other important issues in the home. But sometimes, these inspections reveal things that pose a real problem for the buyer. The question becomes, do you ask the seller to lower the price or fix the problems before closing? Or are the issues so big that you need to back out altogether and risk losing your earnest money?
The key to tackling these common hurdles is to enlist the help of expert professionals along the way. A knowledgeable real estate agent, a trustworthy loan officer and a great home inspector can all be valuable allies in your homebuying journey. With their help, any first-time homebuyer can overcome these hurdles with ease.