Home Buying in Bismarck>Question Details

Jason, Home Buyer in Bismarck, ND

Bad Time for a First Time Buyer?

Asked by Jason, Bismarck, ND Fri Feb 8, 2013

I am currently looking for my first home in either bismarck or mandan. I would much prefer to live in Bismarck the only problem is there is virtually nothing available right now. My price range is around 150k and when things do pop up they seem to be quite over priced.

With the oil boom going on is this really a bad time for a first timer? The options are just not there, yet I hate throwing away money to rent every month.

Thanks

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Trevor Curran’s answer
If you're tired of paying rent, then, if you're qualified for mortgage financing, it's a GOOD time to buy a home. I say this based on 23 years experience helping Homebuyers---even back in 1989 when interest rates were over 14% for a 30yr Fixed Rate mortgage!

Get yourself Prequalified first by a Local Mortgage Banker. Then get out there and shop. Determine your price based on the following principles:

Before you make offers, you have to know your maximum financing amount/purchase price.

First things first: when making an offer, focus on what your monthly payment will be for the mortgage financing, including taxes and insurance. If that payment is within your means, then your Mortgage Banker will determine the maximum loan/purchase price for you based on all the factors of the monthly payment, your down payment and your mortgage qualifications.

Begin making an offer with the following standards:

1. WISH LIST. Does the home meet MOST of the requirements from your Dream-Home-Wish-List? The Dream Home exists only in our minds; it's NOT out there waiting for you to stumble across it one Saturday afternoon. But you can find the right home using your Wish List. When you find the home that meets most of your requirements from the wish list, then it's time to make an offer.

2. FORGET LIST PRICE. Based on your own research, shopping in your chosen area, select the price you're most comfortable with, regardless of list price/asking price. In other words, you'll find a home listed at $268,000, but you've seen at least a dozen other similarly constructed homes in the immediate area priced or sold at $235,000. What makes this home so special that it's priced $33,000 more than the average price? Remember, your Lender will appraise the home based on similar homes and those prices.

3. MAXIMUM OFFER. Never exceed the price based on your mortgage qualifications, no matter how much you LOVE the home. You have to be able to afford the payment for the next thirty years. That in-ground swimming pool you love isn't going to pay the mortgage for you!

4. OFFERS ARE NOT PERSONAL. An offering price can NEVER be misconstrued as an insult to the homeowner. This is business; you're not going to hurt anyone's feelings! Make the offer based on a price you're most comfortable with!

5. OPENING OFFER. NEVER open with your maximum offering price. Test the waters with your opening bid: you want to see if this Seller is a SERIOUS Seller who understands this is a BUYER'S MARKET. If there's no reaction to your offer---assuming the price you offered is within the reasonable range of current market prices---you may be wasting your time with this home/Seller. It might be time to move on to another home.

See my "Five Steps To Making An Offer" for the best way to negotiate on your home purchase.
http://www.tcurranmortgage.com/2010/04/09/five-steps-to-maki…

Trevor Curran
NMLS #40140

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0 votes Thank Flag Link Mon Feb 11, 2013
There are options for purchasing a home in your price range. The best thing you can do is get pre-qualified and then choose one Realtor to find you a home. Listings do come up but in that price range they sell quickly. If you have a Realtor working for you, you will know about that listing first and can make an offer. There is an increase in PMI that banks charge for an FHA loan coming up soon. I would suggest that you take the above mentioned steps immediately.
0 votes Thank Flag Link Mon Feb 11, 2013
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