5 Steps To Avoid Paying Too Much For Your First Knoxville Home
You don’t want to pay anymore for your first Knoxville home than you have to, right?
You’ve already a little worried about paying for the down payment, inspections, and the move. So, the thought of paying even a penny more than you have to is not something you want to do.
In this post, we’ll address 5 steps to avoid paying too much for your first Knoxville home.
Clear boundaries on price are very important as a first time buyer.
When are you willing to pay more for a home?
And, when are you not willing to pay more for a home?
Those are the two most important questions you’ll need to answer for yourself. You’ll want to define what situations you’re willing to consider paying a bit more and when you won’t.
For example, if you’re looking in a particular neighborhood where things rarely become available, you may be willing to pay a bit more. If a home comes available in that neighborhood that meets your needs, you may be willing to go up a bit in price because you know a house like that won’t come on the market for awhile.
Alternatively, you may find a home that you like, but it needs a little work (i.e. repainting or updated kitchen). In that case, you may be more set on price. You know the home needs a little work and you’re only willing to go up to a certain point in price.
Second: Have A Clear Cut Budget
A clear cut budget regardless of the situation is very important.
The best way to set your budget is to speak with a loan officer. They can let you know how much you can afford and give you an idea of what your monthly payment will be based on those items.
In many cases, buyers get approved for more than they are wanting to spend on a home. Even if you get approved for a certain amount, absolutely doesn’t mean that you have to spend that much when you buy your first Knoxville home.
You know how much you’re comfortable spending on a mortgage payment each month, so you want to buy in a price range that would keep your mortgage payment close to that. There is absolutely nothing worse than spending more on a home than you want to.
Set your budget, and stick to it.
So this really, really great house hits the market and you absolutely love it. It’s got this great kitchen with granite, tile backsplash and new appliances. It’s perfect. The only problem is…it’s out of your monthly budget.
So, what’s a buyer to do in this situation?
Walk away. Yep, turn the opposite direction and walk away.
If this home is realistically out of your budget, there is no use in looking at it an falling more in love with it. Or, even worse, you look at the home, get tied up on an emotional rollercoaster, and somehow end up buying the home. You’ll eventually end up regretting spending so much on the home.
There is nothing worse than buying a home that you cannot afford. After reality sets it and you start making that payment, you’ll find yourself so financially stressed, it won’t be a good situation. You’re monthly budget will be tight. Or, even worse you’ll struggle to make payments on the home.
Needless to say, the moral of the story: stick to your budget. You clearly define at the beginning of your first home search what you’re willing to spend a bit more that you can still afford.
Fourth: That Extra Bath Is Worth What?!
When you find the right house, it’s important to know how the price you’re offering compares to other homes on the market.
So, how do you find this out?
It’s very simple, with the help of your realtor. He or she can provide you with a list of comparable properties that have sold in the area that are comparable to what you’re looking at. Based on this, your realtor can help give you an idea of what a competitive offer would be – that is, not paying anymore than you have to while still making a strong offer.
Here are a few things to consider as you look at comparable properties:
- What features do those lack or have in addition?
- How long ago did those properties sell?
- How competitive is the current market?
- Are you asking for any additional items (i.e. closing costs)?
Your realtor can also put these items into perspective. If the market has become more competitive and you absolutely need your closing costs covered, you may need to offer a bit more on a home.
Fifth: Don’t Get Carried Away
It can be really easy to get caught up during negotiations.
You find the right home, make an offer, only to find out that another offer or offers have been made. You really want this house.
So, what do you do now?
Before moving forward, you need to know how far you’re willing to go. What is the most you’re willing to comfortably pay for this house? What price will not put you over the edge for your budget? And, what price will you not regret playing later on?
It can also be helpful here to get the opinion of your realtor here. You don’t want to pay more for a house than it’s really worth. Getting their honest opinion here can be important and helpful.
Once you know this, stick to your guns and don’t go a penny over that price. If you lose out in the bidding war, there will be another house, a better house.
Bottom Line – Don’t Let Your Emotions Run The Show
Buying your first home can be an emotional rollercoaster. When you’re in the middle of it, it’s easy to let emotions get the best of you. By sticking to these hard and fast rules, you’ll avoid paying too much for your first home and keep your housing budget intact.
Are you thinking about buying your first Knoxville home this year? If so, start your home search off today on our Knoxville Home Search Page. And, it there is anything we can assist you with, please do not hesitate to give us a call. Rick can be reached at 865-696-9002 or via email at Rick@KnoxvilleHomeTeam.Com. Kati can be reached at 865-696-1888 or via email at Kati@KnoxvilleHomeTeam.Com.