Buying your first home is certainly worth celebrating, but can also be a little overwhelming. Never fear, Magic City first-time buyers, we met with a pro from B’ham Realty to get all the scoop. Read on before you sign on the dotted line.
Birmingham is an incredibly exciting place to be, and homes in The Magic City are flying off the shelves. Want to set up roots here, but don’t know where to start? Completely lost in a sea of real estate terminology and confusing budget calculations?
Well, you’re in luck. Ben Hedden, Founder and Realtor at B’ham Realty, is giving us five easy steps to becoming a Birmingham homeowner. Let’s get down to business…
1. Calculate your budget before you shop
Before you even start looking, make sure you know what you can afford. B’ham Realty advises that your monthly housing payments shouldn’t exceed 25% of your take home pay. Oh, and don’t forget about fun things like property taxes and homeowners’ insurance.
By setting a budget up front, you will be able to cater your search from the get-go, and ensure you don’t fall in love with a property way above your budget, or close on a house you can’t maintain.
“Buyers are typically under the impression that they have to put 20% down, but most people will actually put around 3.5% down. Not to mention your first mortgage payment won’t be due until your first full month after closing. If you close Jun 2, your first payment would be August 1. These details make an enormous difference when calculating your budget.”— Ben Hedden, Founder and Realtor, B’ham Realty
2. Establish your first home non-negotiables
Of course, there will be some compromises, but it’s critical to establish some elements you won’t budge on. Need to be in a good school district or a walkable community? Can’t live without a walk-in closet? Be flexible, but never settle.
Once you’ve defined your budget, the pros at B’ham Realty recommend making a list of your top items and sticking to it to avoid disappointment. Imagine having buyer’s remorse on something as substantial as a house—yikes!
3. Find a qualified real estate agent
Besides reading this article, the best thing you can do when buying your first home is consult an expert. Finding a good real estate agent is no small feat—you want to be sure they are qualified and have your best interests in mind, so don’t be afraid to interview a few to get the best fit.
B’ham Realty was born to give Birmingham clients a completely unique experience. The dynamic, local team is focused on providing top-notch service and saving you money along the way. In fact, because they keep all of their services in-house, clients save major $$. That’s extra money toward your dream home!
4. Don’t forget about appreciation
Let’s go over some quick lingo. First, appreciation. Essentially, appreciation is how a home’s value increases over time. After making a large investment (like buying a house), you’d want the value to increase, so you don’t lose money when you sell it down the line.
There are lots of things to consider when factoring in a house’s appreciation, but here are some of B’ham Realty‘s top tips:
- Consider buying near a commercial development to get the most appreciation possible.
- Go for a single family home if it’s in your budget—these will always appreciate more than condos.
- Seek out an Aldi. Living within a 5-mile radius of Aldi grocery stores gives you the highest appreciation on a 5-year average.
5. Get an outside opinion
Know someone that prefers to go “buying” instead of “shopping”? Yep, that’s me.
Especially if I’ve been looking for something for a while, it can be tempting to jump at the best option available, even if it’s not perfect. To make sure you aren’t wearing rose-colored glasses, bring along a pal to your next open house.
The more honest they are, the better!