What makes people want to buy a home? Space, privacy, proximity to family and friends, and a sense of
community all contribute to the emotions of buying a home. Tax breaks, transportation, amenities, and the
opportunity to build equity are also factors.

But the biggest reason cited by home buyers year after year is simply the desire to own. According to the
National Association of REALTORS®, 75% of first-time buyers are former renters. They prefer to build equity
for themselves than for someone else. There’s always a risk that home prices will fall further, but prices and
mortgage interest rates have bounced along the bottom long enough that sooner or later one or both will
start rising again. That means the risk is greater that prices and mortgage interest rates will rise, rather than

Researchers at the Center for Economic and Policy Research studied 100 communities and found that
affordability is a strong incentive to buy now. You can build equity within four years, and take the money
you’ve put in the home back out again when you leave, which is not possible for renters.

So how do you know if it’s the right time to buy?

It’s affordable
Only you know if you’re in a position to buy a home. Your lender will let you know how much home you
qualify to buy. Work with your real estate professional to find neighborhoods and homes that are within your
borrowing limits. Compare the rent you’re paying now with the monthly payment you’ll be making including
property taxes and hazard insurance.

The time is right
Buying a home is one of the greatest lifestyle changes you can make. It goes hand in hand with forming a
family and becoming a productive member of the community. If you want the amenities of home ownership,
you will enjoy owning.

Incentives are huge
Mortgage money is the cheapest money you’ll ever borrow. Couple that with low prices that are sure to rise
and you have the makings of a great investment. Further, you can deduct your mortgage interest rate and
property taxes from your income taxes. And you can sell your home after two years and not pay capital gains
on any profits. You can rent your home to others and start building a portfolio of self-sustaining properties.
Don’t worry about timing the market. Even the smartest investors don’t wait for the bottom to buy – because
you don’t know where the bottom is until it’s already passed you by.

Follow these Steps
Get prequalified - Your lender will look at your income, credit scores, revolving debts, obligations such as
child support as well as the type of loan you choose. Other factors that impact how much home you can buy
is the down payment; smaller down payments mean higher monthly payments. Last, the interest rate and
terms (30-year, fixed or adjustable rate) will determine what you can afford in monthly payments.

Make your wish list - Decide where you want to live and how many bedrooms and baths you’ll need.
Consider lifestyle - condominiums offer shared amenities, with little responsibility. Single-family homes offer
more space and privacy, but much more exterior and yard maintenance.

Hire a real estate professional - Your real estate professional should be expert in the area where you want
to live and familiar with the type of home you want to buy. Your agent has house-by-house experience in
your neighborhood and can offer the best advice on homes in your range.

Select your home - No home is perfect, so don’t let minor flaws influence you. Think long-term. Which home
best suits the activities and needs of your household now and in the years ahead? Don’t buy more than you
need or can comfortably afford.

Make an offer - Your offer depends on the current market. If a home has been on the market a long time,
you can ask the seller for a price reduction, but if it’s new on the market, the seller is unlikely to accept a low
offer. Ask your real estate professional for advice.

Get an inspection - A home inspection is a professional third-party opinion of the home’s condition. The
inspector will point out the age of systems, and large and small repairs that are needed, so you’ll know what
you’re facing as the next owner.

Get an appraisal - The bank appraisal determines market value. If the home doesn’t appraise for the
purchase price, the bank will refuse to make the loan unless you renegotiate with the seller. If it appraises,
the lender will move toward closing.

Go to closing - Once final negotiations are complete, the parties to the transaction meet at the escrow office.
This could be a title company, real estate attorney, or whatever is customary in your area. All paperwork is
signed by both parties. The lender pays the seller, minus any liens against the home such as the seller’s
mortgage. Once all the disbursements have been made, you get the keys to your new home, according to
your agreement.Congratulations! You’re ready to move into your new home


Find an Experienced Real Estate Broker or Agent
Buying a first home is a complex process. An experienced real estate broker or agent will assist you all
through the search, comparable homes sold, making an offer, inspection, repair, and appraisal processes, as
well as help you find the best value, neighborhood, and quality for your budget and requirements.

The seller’s real estate broker pays your broker or agent out of the loan proceeds. If you don’t use your own
agent, the seller’s broker keeps the commission, so you might as well avail yourself of professional advice.
Your real estate broker or agent works in your best interest

Don’t expect perfection
There’s no perfect home. You may want all the latest amenities of a new home, but even new homes come at
a price, perhaps longer commutes and bigger pricetags.

Many sellers don’t repaint or recarpet prior to selling, so if you’re shopping for an older home, expect to do
some cosmetic work.

Homes that need updating are priced below homes that are up to the minute and move-in ready. That could
be to your financial advantage, so try to look beyond outdated fixtures and focus instead on the floorplan and
dimensions. Ignore the seller’s tastes and imagine each room clean and clear of clutter and with your own
things in them.

Most cosmetic changes are relatively inexpensive, and you can even pay for them with your mortgage loan, in
some cases. Talk to your lender.

Think long-term investment
Buying a home can be a wise financial investment, if you buy right and hold your home for long-term gain.
Because of closing and moving costs, it’s nearly impossible to buy a home and sell it immediately for a large
gain, but it is possible to sell after a couple of years with no capital gains tax, should you make a profit.

According to the National Association of REALTORS®, home equity growth beats inflation by about one to two
percent annually, not to mention government subsidies for home ownership in the form of tax relief and other

However, if you look at owning a home strictly as an investment, you’ll miss many pleasures.