7 Crucial Tips For First Time Buyers

Source: By Cameron Huddleston for Kiplinger's/www.Kiplinger.com

If record-low mortgage rates and plummeting housing values have you primed to get into the market, don't get antsy - get educated. Here are some essential steps to take when buying your first home.

When buying a home...

Lay the groundwork. Our first step was figuring out how much house we could afford and how much we could borrow. If you're moving to a new community, be sure to find out what home prices are there. Housing prices can change dramatically from state to state and even city to city. You might also want to talk to friends or colleagues in the area about neighborhoods and other considerations only a local might know.

Take your time. We thought we were ahead of the game by looking on the Web for homes. But every house we found online that we really liked was snatched up before we had a chance to go to Kentucky to check them out. I started to worry that if we didn't move fast enough, all the "good" houses would be gone.

By the time we actually went to Kentucky to look at homes, we had only two months before my husband had to start his new job. I was determined to find something - anything. My husband, the levelheaded one, urged me not to rush. Did I listen? No. As a result we settled for a house that had only a few of the things I wanted and many of the things I didn't want.

In retrospect, I realize homes constantly come on (and off) the market. You might not find your dream home, but you don't have to settle for any old house just because you feel under the gun to buy something. Consider renting to give yourself time to find the right home.

Realize you won't find the perfect home. Forget the idea of finding your dream home. It doesn't exist. You will not find a house that has everything you want, and none of the things you don't. Real-estate agents tell you to make a list of what's important to you - size, condition, location, style and price. That way you can zero in on a home that comes closest to suiting your wants and needs.

We wanted an old home with hardwood floors, a small yard, a garage that didn't face the street and a basement. We got a newer home with wall-to-wall carpeting, a big yard, a garage in the front of the house and a crawl space. That's because we had to give up some things to get others - like a big kitchen and plenty of bedrooms.

Accompany the inspector. Most stories on homebuying advise you to have a home-inspection clause in your contract, giving you the right to have the property inspected and to withdraw your offer if the inspection report isn't satisfactory to you for any reason. What these stories often neglect to mention is that you should be present during the inspection. We weren't because we didn't want to spend the money on a flight to Kentucky. Now we know it would have been money well spent.

Sure, you'll get an inspection report. But it can be difficult making heads or tails of it. If you're present during an inspection, you can see problems with your own eyes, get an idea of how serious they are and ask the inspector how much he might think it will cost to repair them.
Pay attention to the little things. Because I thought I needed to rush to buy a home, I wasn't as objective during our home search as I should have been. When we finally walked into a house that met many of our requirements, we turned a blind eye to some things we should have paid closer attention to. And because the inspection didn't turn up any major problems, we decided to look past the minor ones. Well, it's the little things that can become big headaches once you move into a home.

Pay attention to how a home smells. A strong odor - especially a musty one - can be an indication of a bigger problem such as mold.

Look at small details, not just the big picture. If there are cobwebs in the corners, dirty windows, weeds in the lawn and leaves in the gutters, the sellers obviously didn't do a good job of keeping the property clean. If they haven't taken the time and money to maintain the little things, there's a chance they've let big things, such as plumbing or the heating and cooling system, fall into disrepair.

Don't think just because the house needs a few minor repairs or new paint on the walls, it will be cheap, quick and easy to tackle. Before you know it, the costs add up, it's taken a lot more time than expected and you've had to call in the experts to finish the jobs you couldn't handle on your own.

Be ready to negotiate. We got the sellers to lower their price by $7,000 and throw in a one-year home warranty, which will cover the cost of repairing or replacing the home's mechanical systems and major appliances. And we got a good deal on our homeowners insurance, with guaranteed replacement coverage at no extra cost.

Don't spend all your money on the down payment. If you're moving into your first home, you'll have to buy things you never needed before, such as lawn mowers, yard tools and major appliances. You'll need cash for these purchases unless you're planning to mire yourself in credit card debt.

When you're ready to move...
Check out the movers or moving truck. If you're entrusting all your worldly belongings to movers, make sure you check out the company first. We opted to take the cheaper route by renting a truck and making the move ourselves.

If you go this route, protect yourself by asking to see the truck's maintenance records. Also check the fluids and the lights before leaving the lot. Finally, be sure to take a good test drive before loading the truck.

We went through three trucks before we found one that we thought would make the trip. The first truck had a steering problem - the wheel jerked back and forth once the vehicle exceeded 40 mph. The second one made a loud squealing noise when we accelerated. The third was missing a taillight. All three had more than 100,000 miles on them. The fourth, we discovered 400 miles down the road, had a bad tire.

Get the sellers out before you move in. When we finally drove into our new home's driveway, we quickly discovered that the sellers had not packed a single box the day we arrived in Kentucky and were supposed to close on the house. An unsuspected lien on the house delayed our closing by a week. Because we didn't close and become the rightful owners of the house, we couldn't really tell them to hurry up and get out.

They were nice enough, though, to let us move our stuff into the garage while the closing fiasco was sorted out. It's pretty easy to guess what happened. While they were moving their stuff out, they mistakenly loaded some of our belongings onto their moving truck. We did get our things back (after I'd spent a night worrying they were lost forever).

Give yourself time to unpack. If you're relocating for a job, build in some time to clean your new home, unpack and get settled. As a result of the delay in our closing, we had a day to move in before my husband had to start his new job.