UNITED STATES—The housing market in California in 2022 is expected to follow a similar trend to what happened in 2021. This means that prices are expected to rise and most house offers won’t last two months without being bought.
This makes the market a bit scary for first-time buyers, but there are ways to make the process a bit more beginner-friendly. Still, you have to know what to do and what to ask for, so moving forward, we’ll discuss the most important things when you’re looking to become a house owner.
1. You Might Be Able to Lower Your Costs Through a First Time Home Buyer Program
To encourage first-time buyers to enter the market, the government and states offer a few incentives such as tax breaks, state programs, or federally backed loans. However, these are only available to people who qualify as first-time buyers, and most state-backed programs have different conditions.
To get more information and find out if you have access to any of these incentives, it’s best to find a reliable real estate agent who is knowledgeable of the market in your area of interest. For this, check out Home & Money – a platform where you can find real estate professionals who can help with your specific needs.
2. Check Your Credit
Most first-time buyers will need a loan to help them support the financial burden of purchasing a property. While this is quite a common scenario, not everyone can qualify for a standard loan.
Banks and other lending institutions require good credit, a financial history that proves you pay your obligations, and a maximum debt-to-income (DTI) ratio of 43%.
So before you start the adventure of finding your dream house, first make sure you are in the green when it comes to credit health. Also, try to estimate where you fit in when it comes to the value of your loan (lenders tend to limit housing expenses to about 30% of the borrowers’ monthly gross income).
3. Know the Type of Home That Best Suits Your Needs
Most properties available on the market in California fit in the traditional residential types:
- Traditional single-family home – a detached building built on a lot
- Townhouse – an attached single-family home that shares a wall with one or two other townhouses
- Condominium – a unit in a building that shares at least one wall with a neighboring unit
- Multifamily home – a detached building made up of four or fewer units
- Co-op – you own the building collectively with the other tenants
Now, each type of property has its pros and cons, so it’s important to decide the factors that matter the most to you. For instance, if you need to fit in a tight budget, a co-op or a condo may work best for you. However, if privacy is crucial to you and your family, you should consider a single-family home.
4. Don’t Forget About the Neighborhood
There are times when choosing the neighborhood comes first on your list of priorities. For instance, if you have children and want to find a home close to their school(s), you’ll first look for a good neighborhood, where young families can integrate easily.
Plus, even if you don’t have kids right now, if you want to build a family after buying the house, it’s important to choose an area that’s close to schools, hospitals, and other facilities. So, before you start shopping for homes, try to identify the features you need from the area that will become your neighborhood in the following years.
First-time buyers need to know what they are looking for, what budget they have available, and how to find the right professional to guide their journey. It also helps if you understand the difference between an agent and a broker, and how each of them can help smooth the journey.