Buying a home is one of the most significant personal and economic decisions in life. It marks a new chapter, full of excitement and new opportunities. However, homebuying can often feel overwhelming and stressful – especially your first time. We asked long-term homeowners to share insights and lessons they wish they’d known sooner. Whether you’re a first-time homebuyer or looking to upgrade (or downsize), these tips can help you navigate the process more confidently.

1. Establish a Realistic Budget

A crucial first step when home shopping is setting a responsible budget. Owning a home comes with various expenses beyond the mortgage, such as property taxes, insurance, maintenance, and utilities. Take a big picture look at home expenses so you don’t stretch your monthly budget to the limit. Assume that taxes will go up and that mortgage rates won’t drop for as long as you own the home.

 2. Shop the Neighborhood First

Choosing the right neighborhood is vital for your comfort, convenience, and long-term property value. It will hardly feel like a dream house if your neighborhood doesn’t feel like home. Take time to visit during different times of day to gauge the atmosphere and get a feel for the community. If you’ll be commuting to work, take a drive at peak hours to see if traffic conditions test your patience.

Use independent websites to research crime rates, nearby amenities, and potential development projects. If you have children or are planning to, GreatSchools.org is a helpful website for assessing the quality of local schools.¹ Even if children aren’t in your future, buying in an area with good schools can affect future resale. Also think about the pros and cons of an HOA and the costs. It’s a decision that will be with you for the life of your home.

3. A Good Realtor is Almost Priceless

Most future homeowners are wise to rely on an expert for guidance. A certified real estate agent will understand the market and be there for you when tough questions arise. Read reviews and ask for multiple recommendations before committing to the first realtor you meet. A real estate agent will get paid a fee, but ultimately can save you money during negotiations. Most importantly, a realtor can help you get a jumpstart on new homes hitting the market.

4. Don’t Skip the Home Inspection

No matter how beautiful a home appears inside and out, never skip paying for a proper inspection. A certified professional can reveal hidden issues like structural problems, water damage, or faulty electrical wiring. Understanding the home’s condition can save you from costly repairs in the future or give you leverage with the seller. Most home inspections will inform you of your flood risk and the need to buy insurance to cover it.

5. Shop Around for Mortgages

Finding the perfect mortgage is as essential as finding the perfect home. Research various lenders, compare interest rates, and understand the different types of mortgages available. Get pre-approved before house hunting, as it strengthens your position as a serious buyer and simplifies the purchasing process. Remember, just because you’re qualified for a mortgage doesn’t mean you can afford it. While first-time homebuyers focus on the long-term investment, being stretched financially can limit your leisure and life goals.

6. Be Ready to Walk Away

The most important part of price negotiation is not being afraid to walk if the seller’s terms make you nervous. Consider negotiating on closing costs, contingencies, and inclusion of appliances or furniture. Being a confident negotiator can save you thousands or tens of thousands. Of course, it’s essential to strike a balance between assertiveness and open-mindedness during negotiations. Keeping communication channels open and being willing to engage in counteroffers can lead to a win-win situation for both parties.

7. Trust Your Own Intuition

Family and friends freely offer “help” to first-time homebuyers, but only your name is on the mortgage. This doesn’t mean ignoring the advice of others, but only you understand what makes a home special to you. Plus, you’ll be the one who follows through on redoing a bathroom, finishing a basement, or adding a garage.

8. Compare Home Insurance

While it’s possible to own a home without homeowners insurance, it’s not advised and mortgage lenders require it.² Make thinking about homebuyers insurance part of the process. Don’t hesitate to ask for estimates on more than one house you’re considering. The sooner you speak with an insurance professional, the sooner you can work insurance costs into your monthly budget. The Insurance Information Institute offers a list of factors that affect insurance costs, from fire department proximity to swimming pools and other special features.³

Who is Answer Financial?

Being a first-time homebuyer is a thrilling adventure, but it can also be a daunting one. Taking an assessment of your future home insurance needs before buying is an important step to this big financial decision. Answer Financial makes it easier by helping you quickly compare rates and customize coverages from 40+ top-rated companies. Or call 1-800-258-5101 to speak about your individual needs with one of our experts.