Being a first-time homebuyer in Staten Island doesn't have to be painful!
Embarking on the journey of purchasing your first home is a landmark event in your life. It’s both exciting and daunting, particularly in Staten Island, where the real estate market has its own unique quirks. This guide is designed to simplify the process, providing you with a clear, step-by-step approach to buying your first home. From financial preparation to finally holding the keys, here's everything you need to know!
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Quick Recap
#1: Understanding Your Financial Position
Assess your finances.
The first step in your home buying journey is to thoroughly understand your financial health. This means evaluating your income, debts, credit score, and savings. Your credit score will significantly influence the mortgage rates you're eligible for, so it's a good idea to check it early in the process. You can obtain a free credit report from several sources online.
Budgeting
Next, establish a realistic budget. Consider your current debts and regular expenses, and determine how much you can afford to spend on a monthly mortgage payment. Remember, you’ll also need to account for other homeownership costs like property taxes, homeowners insurance, and maintenance expenses. Don't forget about utilities! If you're currently renting an apartment and looking to buy a house, it will cost more to heat up and cool down. Plus you'll now have to pay for water.
Save for Down Payment and Closing Costs
Saving enough money for a down payment is one of the biggest hurdles for first-time homebuyers. In Staten Island, the typical down payment (between 5% and 20% of the home's purchase price) can be $35,000 to $140,000 based on your average home price of $700,000. Closing costs, which cover various fees related to the purchase process, can add an additional 2% to 5% to your expenses.
#2: Get Pre-Approved for a Mortgage
First real step!
Before you start looking for a home, get pre-approved for a mortgage. This will give you a clear idea of what you can afford and shows sellers that you are a serious buyer- you cannot submit an offer without a pre-approval. During this process, lenders will scrutinize your financial history, so having your documents organized and ready to go is a must. I will guide you in putting your documents together.
Speaking of lenders: a common question is "which is best?" Going straight to Chase Bank, or exploring a Mortgage Brokers options? We will discuss this in detail when you're ready, and I will guide you every step of the way.
#3: Find the Right Real Estate Agent
Choosing a knowledgeable and experienced real estate agent can make a significant difference, especially in Staten Island's market. A good agent will understand your needs and budget constraints and can navigate the local real estate landscape effectively. A great agent will also feed you the stats and knowledge you need to decipher whether or not you're overpaying, making good offers, etc.
Do you know many agents that give entire packets filled with all of the information you need on a showing? I do- me! I go above and beyond in this process and make sure you're comfortable and in-the-know.
#4: Shop for your Home
Now comes the exciting part—shopping for your home. Consider the following:
Location: Think about your daily commute, the quality of local schools, the proximity to amenities like parks and shopping centers, and the overall safety of the neighborhood.
Size and Layout: Consider your long-term needs. Might you need extra rooms for future children? Do you need a home office? I can't stress how important this one is. It's easy to forget about the future and just think about what you need now, but I promise you- 5 years goes by quick. So does 10! You will be in a different position- think about the future!
Resale Value: Try to gauge the future resale value of the home based on upcoming infrastructure developments in the area and the historical appreciation rates of the neighborhood. This is where I come in to play as well! We will discuss everything.
#5: Make an Offer
Once you’ve found a home that meets your criteria, it's time to make an offer. Your Real Estate Agent will help you determine a fair price based on the local market. Be prepared to negotiate with the sellers—a good agent can be invaluable here to get you the best deal possible.
Something to remember is that it's not always about price. I, as your Agent, will be trying my best to determine the true needs of the seller. Are they in a rush? A quick closing may be far more valuable to them than $10,000. Maybe they're worried about the condition of the house- writing up an "as-is" offer may get you much farther than $20,000. It's case by case and must also align with your comfort level- but we try to get creative as possible!
#6: Home Inspection and Appraisal
Never skip the home inspection. This is your opportunity to identify any issues with the house that could require costly repairs. Even if we are writing an "as-is" offer, we still always get an inspection just so you have an idea of what you are buying.
We do the home inspection (typically around $500) and then await the report. A day later, we know most of the homes secrets. We then either: attempt to renegotiate to cover certain issues that came up, accept it and proceed, or, if it's very bad and you're uncomfortable with certain things, we walk away!
Once we move to the next step, we then wait for appraisal. This is the bank sending someone out to verify that you're paying around what the house should actually cost. The reason? If you decide to stop paying and the home goes into foreclosure, the bank now owns it. They want to make sure you're not buying something for $500,000 over what it should be. If the appraisal comes back at/over the price we're buying the house at, great- next step! If it "under-appraises", we have 4 options: First and foremost, the seller appeals it and tries to get it corrected. If that does NOT happen, then 1 of the following 3 will occur: the seller needs to lower the price to the appraised price, you need to put the money in to make up the difference, or you guys can split it. If we can all agree to one of those then we move ahead. If not, dead deal!
#7: Closing
If all goes well, the next step will be to close the sale. This involves a lot of paperwork and the payment of closing costs. It's important to review all documents carefully before signing anything. Once everything is signed and the closing costs are settled, you’ll receive the keys to your new home.
Buying your first home in Staten Island doesn’t have to be overwhelming. With the right preparation and support, you can navigate the home-buying process smoothly and move into a home that meets your needs and fits your budget. Remember, this is not just a financial investment but also an investment in your future happiness and stability.
Happy house hunting!
I, Joseph Ranola, am an Associate Broker at Matias Real Estate, located at 418 Port Richmond Avenue.
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