Live and Learn! What I Wish I Knew as a Real Estate Buyer

It’s always nice to learn from others’ mistakes and revelations, before we’re in the position to deal with similar situations ourselves.

In this spirit, here are a few things first-time deed holders say they wish they knew before buying.

Who Knew? Surroundings Matter as Much as the Home Itself.

Many buyers wish they’d spent enough quality time exploring the surroundings of the home they picked. Here are a few questions they wish they’d asked most:

• Is this area attractive, and the schools highly rated, so my home will hold its value over time?

• How far is the home from shops, cultural draws, and public transportation? Will I be totally car-dependent here?

• Will I have to spend a lot of time (and money) commuting to work and other activities?

• Are the windows, garden spaces, and deck or patio areas getting enough sunlight?

• Are mailboxes accessible — to the residents, and to the mail carrier, in all kinds of weather?

• How is the ground sloped? Are there persistent stormwater drainage problems?

• Speaking of neighbors, are they very close? Do they smoke? Have loud gatherings?

And so on. Think about what will irritate or uplift you on a daily basis. It’s a good idea to buy a home you’ll be happy with for a decade. If you can, you’re shoring up your opportunity to build home equity.

Hey, Could I Have Applied for a Grant to Help Me Buy?

Many first-time buyers aren’t aware. Locally sponsored home buyer grants could be a perfect fit. And some of these grants are in and around very expensive cities. Places that seem financially impossible could be within reach. Ask mortgage consultants for guidance finding the assistance as you shop for a home loan.

Will it be worth your time to look for these plans? Possibly so. Five-figure down payment assistance is not unheard of. These offerings are kind of like promotions from phone companies — there might be strings attached, like a minimum number of years you must keep the home.

If you don’t see any grants, check out government-backed loans with low down payment minimums. Consider a loan backed by the Federal Housing Authority. FHA loans are available for a borrower who puts as little as 3.5% down on a home purchase.

Ask your mortgage consultant about Department of Agriculture (USDA) or Veterans Affairs (VA) loans. Some buyers with modest incomes are surprised to learn that they could have had USDA or VA mortgages for practically no money down.

Note: Read the fine print. Assistance in the form of grants or loans can have many rules to follow, and some of the requirements could be expensive to meet.

Oh, the Expenses! Becoming a Homeowner Is Not for the Light of Wallet.

Save up a good extra ten percent (or more) of your chosen home’s value to one side. Because… Let’s be straightforward. You are going to be paying more than the listing price.

You’re in for closing costs with the various fees, escrow account for insurance and taxes, payments to professionals: an agent, a home inspector, an appraiser, and a few more. Then there’s your move. And furnishings. And then there’s the moment when the HVAC gives out—or at least the washing machine. Even in a newly built home, expect a number of inconvenient surprises. 

Buyers need to keep substantial emergency funds in their accounts. Even in a condo unit, you can be on the hook for things that break. These may be costs the whole community suddenly must cover (so, know the association’s insurance deductible). Some could be expenses pertaining to your unit alone (work needed “within the four walls” of the owner’s unit).

This brings up another thing people often wish they knew at the outset: Learn about what services the homeowner’s association (if you’re getting into one) provides. That comes out of everyone’s monthly dues. Learn what costs — regular and seasonal — must be covered by the unit owners individually, too.   

There’s much to be said for not picking a home with a price tag that maxes you out.

Harder Than Tough Mudder! I’d Have Liked to Have the Obstacle Course Map at the Start.  

States have model purchase contracts that real estate agents use. It’s possible to review the contractual provisions in advance. This will help you speak with your loan officer or mortgage broker and your agent when you’re looking to organize tasks and a time frame.

You’ll probably need to plan to keep your ringer turned on constantly. When a piece of information is required from you as the loan applicant, it’s probably urgent. And usually followed by two or three more hurried requests. Then you’ll wonder why everyone’s gone quiet. Then, another flurry of documentation requests. A buyer feels less harried knowing what questions are coming down the pike, and how to get verification in advance for some of them.

A good real estate agent is your champion when you need to know what to expect, and when to be ready.

Trust But Verify? The Inspection Is Necessary But Not Always Sufficient.

Some homes are sold with non-standard appliance hookups and so forth. First-time home buyers are often taken aback to find out that some things are not done correctly. Some wiring could comply with an older version of the building code. And so forth.

Owners who sell their homes are legally responsible for telling buyers about material defects. Some buyers, sad to say, don’t tell.

Often, an inspector calls the buyer’s attention to various findings. The buyer’s agent can then help the buyer determine how to negotiate in light of the findings. Other things could get missed in the inspection. You might have no idea what’s behind the walls or under the floor covering. You might miss potential tree-care or drainage issues as well.

And if the buyer accepts a lot of blemishes with hopes that the place will clean up well, will the necessary work include the need for permit applications and fees? And did the seller follow zoning rules if applicable to home improvements that have been made?

The cost of work and materials, appliances too, is on the rise — first given inflation, and now tariffs. Unplanned maintenance and repair jobs cost a lot today. 

Avert Buyer’s Remorse: List Your Priorities in Order.

It would be a near-miracle for a first-time deed holder to have the perfect home in every respect. Expect to experience a few drawbacks in any real estate deal you make.

All the more reason to make a checklist of the valuable traits of a comfortable home. Give them rankings — say, ten points for the characteristic that would make you happiest, and so on. Then you can add up points for what you find in each home you consider buying. This method can at least help you keep all the “must have” and “nice to have” things at the top of your mind as you shop for your first (or next) home.