5 Secrets About Buying Your First Home | Equity Prime Mortgage

5 Secrets About Buying Your First Home

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5) Be Prepared for HOA Surprises

Homeowners' Associations are everywhere. It has become increasingly difficult to find a home that is not controlled by an HOA, and since 2008, 88% of new homes automatically belong to one. While many HOAs are lovely and provide a pleasant neighborhood to live in, there are a few things that first-time home buyers simply don't know and should know. HOAs are too complicated to cover fully in a single sub-heading, but here are the key facts you should be aware of:

HOA Key Facts

  • HOAs charge a regular membership fee to all homeowners.
  • You must follow all HOA rules, even if you didn't vote for them
  • HOAs can levy fees and special membership costs at any time
  • HOAs can foreclose and sell your home
  • Your house is a permanent part of the HOA.

 

Be very careful about buying a home inside an HOA neighborhood, and always get a very clear Yes or No on whether a home is an HOA home. If a home is inside an HOA, never close the deal until you have read through the CC&Rs (neighborhood laws), the recent meeting minutes, and know the state of the neighborhood treasury. This will tell you if you're buying into a healthy neighborhood that suits your lifestyle.

7) Research the Neighborhood, and Your Neighbors

Of course, whether or not your home is part of an official governed neighborhood, it's also important to know your new home region. The schools, parks, and shops nearby will become your nearby haunts. The roads will be the same roads you drive every day for years to come. The area of your new home matters almost as much as the home itself. Where you buy will shape how you live, so take a walk through each neighborhood and get to know the area.

You may also want to say hello to a few potential neighbors, for a number of reasons. Not only will a few friendly chats with locals give you an idea of what it's like to live in the neighborhood, you can also ask about local tips and expenses. Ask how much utilities tend to be per month, when garbage day is, and where the secretly delicious little local restaurants are. This may help you fall in love with a home and neighborhood more than anything else.

8) Have an Emergency Fund

Buying a home can be much more unpredictable than most first-time home buyers are prepared for. Homes are not like packaged retail products, they have details and flaws that can be changed, damaged, repaired, and remodeled. You might find your dream home, and that it has terrible old pipes that need replacing. You might think that you're ready to close and move in when a last-minute delay puts off the moving date. 

All sorts of final expenses can come up at the last minute, from delays to closing fees to unusual repairs. Make sure that you don't empty your household funds acquiring the home, always a thousand or more back as an emergency fund to make sure everything closes smoothly.

9) Hidden Gems vs Beautiful Lemons

The real estate industry has many secret and behind-the-scenes techniques for finding the perfect property. Most people pick a new home based on their emotions and impressions of the place when they tour. This means that staging, the art of prettying-up a home for sale, can tack on many thousands of dollars to the final price and help a home sell quickly. But this can create the beautiful lemon phenomena, when new wallpaper covered rotted drywall or when shining new fixtures cover rusted pipes. Always get inspections to avoid being fooled by clever staging to hide a home's fatal flaws.

On the flip-side of this, savvy home buyers know how to look for hidden gems, diamonds in the rough. Look for homes painted outdated colors, homes with a great floorplan but unfashionable details. A scraggly yard, imperfect siding, old carpets, and stained walls are not deal-breakers. They are easy to fix but will scare away competitor buyers and bring down the price of a home. Know a hidden gem when you see one, but only when the bones really are ideal.

10) Be Ready to Walk Away

Finally, and here's the most important secret of all, always be ready to walk away from any single home. There are plenty of houses and there are always new properties going on the market. Don't tie yourself to a property that isn't good enough, is too expensive, or comes with too many unpleasant strings attached. Don't let a bidding war or a coy seller lead you on, and don't feel forced to pay more than you can afford.

Remember that (almost) no home is unique and if one opportunity is too much trouble, you can always wait for something better to come along. This attitude will keep you safe and make sure that when you do make a decades-long commitment to a property, it will be a decision that you will always be happy about. For more guidance finding the perfect first home for you and your family, contact us today!