Buying your first home with your significant other can be an exciting opportunity to make your dreams come true – or end up a stress-filled journey into the unknown. Here are some tips to keep your relationship on steady ground while avoiding costly mistakes.
Make sure you’re on the same page. Chances are that you and your partner have different ideas about the home you should buy. One of you might want a home in the suburbs, while the other is picturing a swank urban retreat. He is up for the challenge of a fixer, while you are wary of his handyman skills. You want a large yard for the dog but he dreads the upkeep. There are many decisions to be made regarding location, style and condition so before you begin your search have a frank discussion about what each of you wants and understand where you are both willing to compromise. Get your ducks in a row. Start by ordering your credit reports and checking for any inaccuracies or negative items. However, before you start paying-off that 5 year old collection account, check with a mortgage professional about what you should and should not pay-off or challenge. Often any activity on an account, even if paying-off a debt, may have a negative impact on your credit score. Sharing credit information is often a sensitive matter for couples. Lenders place more weight on the lower scoring partner, so now is the time to work together to improve your joint credit profile. Take a hard look into your wallet. Pre-qualification for your mortgage is a must. Most professional agents won’t even show you a property unless they know exactly what you can afford and that you have a pre-qualification letter to submit with an offer. Work with a mortgage professional and learn about the various types of loans available and exactly how much you can borrow. It’s also important to discuss with one another how much of your monthly income you’re comfortable allocating to housing costs. Remember, there is no landlord to call if the plumbing backs-up or the refrigerator dies. Things happen when you own a home, and you need to be prepared to pay for all items not covered by insurance or a home warranty. Find a local real estate agent to trust. Just because your cousin is a part-time agent, doesn’t mean he or she is the best choice to represent you as a buyer. Instead, look for an experienced agent who knows the area you are targeting for your home search; someone who has first-hand knowledge of the various neighborhoods, shopping, schools and other amenities. Ask your friends for referrals and check online references. Don’t hesitate to interview several people to find the real estate professional you feel will be there to answer your questions and patiently guide you through the home-buying process. Working with an agent whose advice you trust and respect will help keep the peace if negotiations get tough or you encounter unforeseen obstacles. Be prepared for a reality check. Many first-time buyers have an inflated view of what their money should buy. It is unlikely that you will find everything on your wish list. Market price is driven by comparative sales. Just because you think a home is worth $300K means nothing if a comparable property just sold for $400K. Go big or you won’t be going home. Be ready to act. You have to get in the game. Sure, writing an offer is scary and often first-time buyers want to “think on it” for a few days, or wait to bring their parents or friends to see the property and get a second opinion. Unfortunately, depending on your market, your dream home might be under contract by the time you decide to act. Couples frequently have one member of the relationship who is reticent to take action. Take a deep breath and trust your gut, your partner, and your agent. Under most real estate contracts you also have a contingency period to investigate the property and pull-out if dissatisfied without losing your deposit. Get ready for some tough talk from the inspector. Your offer has been accepted; you’ve mentally decorated every room and can’t wait to move in. And then, the inspector arrives. You have hired him or her to uncover any problems, but you dread the results. Please be reassured that EVERY home has issues, even a new build. A thorough inspection is the best thing you can do for your long-term peace of mind. Talk with your agent about the inspection results and based on a non-emotional evaluation you can a) cancel the contract; b) request the seller to make certain reasonable repairs or credits based on the price you have offered; or c) have a good list of minor things that should probably be attended to in the next year or so. Never assume that because everything was remodeled there are no problems. Always pay for a thorough inspection. It is worth every dollar you spend. Bring your best game. Once you are in escrow there will be forms and many requests for information from title companies, lenders and possibly attorneys, depending on where you live. Be timely in providing any requested information or documentation so as to not delay closing. If either of you are unclear about any step along the way, don’t hesitate to ask questions. This is likely the biggest purchase you will ever make and you are both entitled to understand the transaction. Ultimately, first-time home buying harmony is as simple as following these few tips, clearly communicating with one another, and keeping things in perspective. Oh, and a sense of humor doesn’t hurt! *Article compliments of Forbes.com Are you looking for a Realtor in Halifax? Thinking it may be the time to sell but arn't quite sure? Thinking about when you should make the move and set out to make a purchase? I can quickly provide complimentry pressure free appraisals or answer any questions you have regarding mortgages, renos and real estate. Contact me or feel free to leave a public comment or question below. Follow me on Twitter and Facebook to see more updates and see what is going on in Nova Scotia real estate.
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Jason Shadbolt, BMgtAs a Realtor, Builder and previous Mortgage Specialist, if you have questions, all you have to do is ask! |