Tired of writing out those rent checks and ready to own your own home?
We’re cheering you on, even if we’ve enjoyed renting to you. Owning a home, with its ascribed sense of stability and pride, is often a life goal and has long been considered a big part of the American Dream.
Achieving this dream and making this transition can be exciting, but also challenging. It’s especially challenging now, perhaps, when rising property prices and the intricacies of the real estate market can seem like insurmountable hurdles.
Anything is possible, even in an expensive and competitive market.
If you’re currently living in a rental property and the idea of purchasing your own home has started to take root, know that you’re on the path to achieving a significant personal and financial goal. If you’re working with us at New West Property Management, you know that our Resident Benefits Package provides some tools for working towards home ownership. We’re here to help and support our tenants.
This guide, for example, was put together in order to walk you through the steps necessary to make that dream of homeownership a reality.
Here’s what you need to know, and how to prepare.
Understanding Your Financial Landscape
Surely you’re not going to enter the homeownership hustle without understanding the expense of buying a home. There’s going to be a long list of expenses that you need to prepare for, and you also need to have a clear understanding of your financial picture. Before you can even begin to sift through house listings or schedule showings, you need to gather up the information that reflects your existing financial situation.
Take an honest look at your income, debt, and savings. Consider speaking with a financial advisor who can help you assess your readiness for homeownership.
- Start with a Budget
Create a comprehensive budget that outlines all of your spending on a monthly basis. This budget should identify areas in which you can cut back, if necessary. Every penny that you can save is a step closer to your home buying goal.
- Know Your Credit Score
Your credit score has a significant impact on your ability to secure a mortgage and the interest rate you’ll be offered. Check your score and work on addressing any red flags that could impact your mortgage approval. Everyone has access to a copy of their credit report for free. Go through it and make sure it’s accurate. If you find any errors, make sure you correct them right away. You don’t want to find yourself disputing negative credit notes while you’re trying to get approved for a mortgage.
- Save for a Down Payment
Most conventional home loans require a down payment, typically ranging from 3 to 20 percent of the home’s purchase price, depending on the type of mortgage you’re trying to obtain. The more you can put down, the better your mortgage terms will be. Consider opening a dedicated savings account for your down payment to prevent accidental spending.
Educating Yourself on the Real Estate Market
The more you know about the real estate market, the better prepared you’ll be to make informed decisions. Stay on top of current trends and market conditions to help guide your search. When you have a good foundation, you will face fewer surprises as you begin to look at homes, talk about inspections, and negotiate closing deals.
- Study the Market
Research local market conditions. Understand price trends, consider different neighborhoods, and evaluate the health of the property markets where you’re interested in buying.
- Attend Open Houses
Don’t be afraid to attend open houses, even if you’re not yet ready to buy. This can be a valuable opportunity to see what’s out there, familiarize yourself with the market, and maybe even meet real estate agents you could work with when the time comes.
- Be Realistic with What You Can Afford
Before you start seriously looking, set a realistic price range for your search. It’s easy to fall in love with a home that’s out of your reach, but this can lead to disappointment or, worse, financial strain.
Finding and Working with a Real Estate Agent
A Las Vegas real estate agent is an invaluable asset and an absolute necessity on your journey to homeownership. They can guide you through the process, assist with negotiations, and provide access to a wealth of information.
Selecting the right agent will be very important. Do your research and due diligence. Seek recommendations from friends and family. Look for an agent who specializes in the type of home you’re interested in and has experience in the neighborhoods you’re considering.
Be clear about what you’re looking for in a home, from the number of bedrooms to your desired neighborhood. The more your agent knows about your preferences, the more they can tailor your search. While you’re the ultimate decision-maker, don’t discount the advice of your agent. They have a wealth of knowledge about the local market and can provide valuable insights into what makes a good investment.
Mortgages in Las Vegas: What You Need to Know
Unless you happen to be independently wealthy with access to a pile of cash, you’ll need a mortgage to buy a home. Choosing the right mortgage is crucial to ensuring you can afford your new home without emptying your pockets.
Here are some quick steps to financing that property and becoming a homeowner:
- Get Pre-Approved. A mortgage pre-approval gives you a clear understanding of how much you can borrow. This not only helps you focus your search on realistic options but also shows sellers that you’re a serious buyer.
- Understand Your Loan Options. There are many types of mortgages, from fixed-rate to adjustable, each with its pros and cons. Research and discuss your options with your lender to find the one that best fits your needs.
- Review Your Own Finances. Once you’re pre-approved, avoid making any significant changes to your financial situation before closing on your home. Lenders can withdraw their offers if your financial situation changes, which could leave you without a mortgage.
Once you have your financing in order, you’re basically clear to start looking for your home. This is the exciting part! As you search for your dream home, keep in mind the factors that will contribute to the long-term viability of your investment.
Buying Your Las Vegas Home
When it’s time to start your search in earnest, create a list of non-negotiables as well as nice-to-haves for your new home. This will help narrow down your search and keep you focused on what’s important. Make sure you’re ready to prioritize, and work closely with your agent. Here are some helpful things to remember:
- Consider Resale Value
Even if you don’t plan to sell your home anytime soon, it’s wise to consider the resale value. Look for homes in good school districts, with easy access to public transportation, or that have features that are popular with most buyers.
- Keep Emotions in Check
Buying a home is an emotional process, but try to keep a level head. If you miss out on a home you love, remember that there are always more opportunities.
- Prepare to Make an Offer
Once you’ve found ‘the one’, the buying process begins. This involves making an offer, negotiating, having the home inspected, and finalizing the purchase at closing. Your real estate agent can help you determine an appropriate offer. It should be based on market research, the home’s condition, and your financial situation.
- Schedule a Home Inspection
Never skip the home inspection. This step is crucial for identifying potential issues with the home that may not be immediately apparent.
- Close the Deal
The closing process involves signing a multitude of legal documents, paying your down payment and closing costs, and receiving the keys to your new home. It can be overwhelming, but your agent and lender will guide you through it.
Now That You’re a Homeowner
You did it. You’re a homeowner.
But, the journey doesn’t end at the closing table. You’re still transitioning into this new identity, and you don’t want to forget important steps such as getting your home insured. Homeowner’s insurance is essential for protecting your investment. Shop around to find the best rates and coverage for your new home. Make a plan for maintenance. Schedule preventative services for your pest control, HVAC, plumbing, and electricity. All of this will save you money in the long term and deliver peace of mind.
Transitioning from a tenant to a homeowner is a significant step that requires careful planning and preparation. But with the right approach, the dream of owning your own home can become a well-earned reality.
We’re here to help you move from tenant to homeowner. Make sure you’re taking advantage of all the benefits in our Resident Benefits Package, and talk to us when you’re ready to start looking for a place of your own. You can contact us at New West Property Management. Our team expertly manages residential rental homes in Las Vegas and throughout Clark County, including Henderson and North Las Vegas.
