Buying your first home is a big step no matter where you decide to purchase. Often times, there are more questions or doubts then there are answers. Nailing down all the potential costs can be nerve racking and make your head swim. After obtaining pre-approval for a mortgage you will have one piece of the financial puzzle but what about insurance costs, repair cost and taxes?
Rest assured there are professionals here to help you every step of the way. An Eillu Buyers Agent has walked many buyers, just like you, through the process with satisfying results. No question is a dumb question and you deserve a truthful answer and expert advice each step along the way.
Rent vs Buy in the Outer Banks
Renting a home or finding an affordable rental for year round living can be rather difficult in the Outer Banks. Rental rates, even for year round rentals, tend to be more expensive here.
Many times, homes can net more income for an owner through a weekly rental program than through a year round rental.
Sometimes, these home are available for a longer term in the off-season, but require the renter to find other housing in season. Not only is this inconvenient, but finding available housing during the summer months can be very daunting.
Perhaps you have experienced this as well. Here are some other financial reasons for home ownership.
To reap the full financial benefits of home ownership, you should have plans to stay in the home for 5 to 7 years. This spreads out your cost of purchasing over a longer time period and allows you to build up equity through appreciation.
Pre-approval for Mortgage
Most first time buyers in the Outer Banks are not looking to buy oceanfront property due to the cost. While millennial home buyers are reportedly skipping buying a starter house and buying a larger home with more amenities for their first purchase.
Even so, the median value of homes in the Outer Banks is around the $400k mark. Attractive homes priced below this can get very competitive among buyers; especially homes in the range of $200 to $300k. All home buyers should get pre-approved prior to embarking on a home search.
Narrow the Search
Buyers usually begin their search online. It is helpful to actually write down and rank what features and criteria that you are looking for.
Typically, the criteria will include number of bedrooms, design or style, garage and other amenities, like a pool or hot tub, and the price range you have pre-qualified for. This is a very personal list and all that matters is what will make you happy in your new home. An artist, for example, may value the homes orientation, good lighting and a space that can be used as a studio.
In addition to the Outer Banks, there are towns along the inner banks or on the mainland. These towns are close enough to the Outer Banks for residents to work or play but typically are lower cost. It is helpful to narrow your search to a specific location to spot new listings quickly and be able to assess it against your criteria.
If you are considering a condo, neighborhood or development with shared amenities, make sure you budget the cost of Home Owner Association (HOA) fees and consider the quality of the management. Failure to keep adequate reserves can cause surprise assessments to future homeowners.
First time home buyers should trust their Eillu Agents and other expert’s advice. For example, one home may appear to be a perfect fit on a bright summer day but due to a low elevation could be prone to flooding.
A professional inspection should also be a contingency to the contract and will provide peace of mind to the buyer regarding the condition of major systems. Make sure you get the best advice during the due diligence period.
You may have a friend that is handy around the house but that is not the same as a professional home inspector. Do not take the cheapest option to save money. You home is a long term commitment and a few hundred dollars spread over time will amount to pennies per day. It could save you a lot of grief depending on what may be uncovered by the inspection.
Taking your time to find the right house for you is important so you do not have any regrets. Make sure you view and tour as many homes as it takes for you to be comfortable with putting an offer on the one that is right for you.
Down Payments and Reserves
First time buyers should keep some funds in reserve after closing. Using all of ones savings for a 20% down payment rather than have to pay private mortgage insurance can leave buyers strapped when unforeseen events occur.
In life, unforeseen events always occur. Keep some savings to be able to repair the car or appliances without having to panic or increase your debt.
Financing alternatives, like FHA, require a lower down payment and is a good option for first time buyers. Investigate first time homebuyers programs and government programs for credits and lower down payment requirements that you may qualify for.
Refrain from making any lifestyle changes or making major purchases before closing. Read this: for specific items not to do after applying for a mortgage.
From seasoned veteran to first time home buyer, Eillu is here to help you navigate the home buying process. With over two decades of experience in the Outer Banks market, we can help you with any questions and guide you every step of the way for a smooth buying experience. Our exclusive buyers rebate will save you money without sacrificing service. Schedule an appointment with Eillu today.