While the purchase of a home is always exciting, many first time home buyers get so caught up in the excitement of it that they fail to consider all of the important factors which should be taken into consideration in order to make the purchase of their first home a success.

These factors and details include reviewing the cost of renting versus buying a home, ensuring the home is located in a good school district, applicable legal fees and appraising the value of the neighborhood in which they are considering making their purchase.

While the idea of owning a home is still very much alive as part of the American Dream, if you fail to take all of these important areas into consideration before actually signing on the line, that dream could quickly become a nightmare.

When purchasing your first home it certainly pays off to take the time to do your homework. When touring a neighborhood in which you may consider purchasing a home it is imperative to make sure the home will hold its current value. You can do this by paying attention to what is going on in the neighborhood and looking for signs which might indicate there could be a price correction looming in the future.

For example, make sure you take a look with the radius of a few blocks and take a count of the number of for sale signs that are present. This will quickly give you an idea whether or not there is a glut in terms of available housing. Ask your agent how much time other homes in the neighborhood have spent on the market as well as for information regarding current asking prices versus original listing prices.

Whether you have children now or think you may have a family in the future it is also a good idea to make sure you check out the local school district. Research the test scores of the local schools. Even if you do not plan to have children in the future this is an important step to ensure your home is in a good school district for resell purposes in the future. The buyers you sell to several years down the road may have a family and be concerned about such things.

Considering increased levels of environmental concern, it is also a good idea to have an environmental appraisal of the neighborhood as well. Laws vary in each state according to the types of potential health hazards which must be disclosed as well as the distance away they must be from the home in order to be considered serious. If problems are found consider either selecting another property or at least use the information in your favor for price negotiations. While there are rarely any serious problems present, having such an appraisal can provide much peace of mind. Information that may be revealed in the appraisal includes the presence of a leaking gas tank nearby, possible water pollutants and even the location of a former drug lab in the vicinity. Plan to pay between $100 and $150 for such an appraisal.

If you are purchasing a historic home or a home in an historic area, always make sure you check in with the local historical preservation board to find out how much flexibility you will be granted for remodeling and additions. This can be a sticky issue in many areas. It is not at all uncommon for boards to require homeowners to obtain as sign-off before they make any changes at all to their properties. This could mean that you must obtain permission even to change the color of the paint on your home.

Finally, of course, you must make sure that you can actually afford to buy the property. Far too many times first time home buyers fall in love with a property, make an offer on it and discover later they cannot obtain financing for the amount of the purchase. Not only must you make sure you can get pre-approved for a home mortgage loan but you must also make sure you can come up with the home down payment and home closing costs. Plan to pay between 2% and 5% of the purchase price for closing costs. Make a plan for how you will pay for these costs before you even begin shopping for your first home.

By taking all of these factors into consideration, first time home buyers can be sure that when the time comes for them to purchase their first home, it really is a dream home and not a nightmare or a money pit.