Buying your first home involves a complex process that requires knowledge of real estate laws, financing options, and the market in which you're buying. Fortunately, working with professionals can help you handle most of these issues, preventing you from having to study up on the rules and restrictions in your area. Even so, there are some things you should know as you begin hunting for your first home.

You have probably saved for your down payment and closing costs, but many first-time home buyers are shortsighted in preparing for any additional expenses.For instance, you should also have a small fund set aside to cover any repairs you'll need to make upon moving into the home. It's also wise to have money set aside to cover the initial deposits on homeowners insurance, homeowners association dues, and the transfer or set-up of your utilities.

Depending upon where you're looking for your new home, there may be consumer protection laws in place to safeguard your privacy. Laws like the California Consumer Privacy Act seek to ensure consumers are aware that their personal information is being collected, and they must be told the reason for collecting this information. This is especially important for home buyers who may have to share sensitive personal and financial information with a number of different businesses.

Many home buyers look for programs that allow them to buy without a down payment, or with a lower than usual down payment. While this may seem like a bargain, it rarely works out that way. First of all, it's important to realize that a lower down payment means you'll owe more on the home. You should expect to make larger monthly mortgage payments in exchange for that lower down payment. You'll also be giving up some instant equity that you would otherwise have in your home. While paying a larger down payment may be a challenge, it can earn you a jump start on building equity in your new home.

You will always need a home inspection and, even if your lender doesn't require it, you should have one done anyway. It can help you identify major problems with the property, which may affect your decision to buy the home. However, a home inspection isn't a guarantee, and typically won't uncover every problem. For instance, the inspection may not reveal the existence of mold, radon, or pest infestations. The inspector won't explore hard to reach areas, either. Any issues in crawl spaces or smaller attics may go undiscovered. Regardless, you should attend the inspection, so you can ask questions along the way. This will help you gain a more thorough understanding of the home's condition.

Many new homeowners assume the asking price is the final price without realizing that sellers overprice their homes in anticipation of a negotiation. Another reason for the home inspection is to provide you with information upon which to base those negotiations. For instance, if the inspection uncovers roof damage, you can either ask that the seller repairs the roof, or deducts the cost of those repairs from the sale price of the home. Any damage or faulty equipment that will affect your ability to enjoy the home should be grounds for lowering the sale price of the home. In many cases, the home seller may be willing to lower the final sale price, rather than spend the time it would take to repair the item.

These are just a few concerns that will likely affect your home buying experience. Since there may be other issues related to the purchase of real estate in your area, you should be forthright in asking your agent or attorney any questions that may arise. It's better to ask in advance rather than suffer the consequences down the road. Sometimes, a minor mistake can cost you the home of your dreams.

Source: 5 Unexpected Things to Consider When Buying Your First Home Realty Times (August 16, 2024) Carol Evenson