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Trulia, Other/Just Looking in San Francisco, CA

What are some tips for first-time home buyers?

Asked by Trulia, San Francisco, CA Sun Mar 4, 2012

Can you share some of your top advice or tips for home buyers?

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All great answers and I would agree most with Mike Jaquish. Many buyers reach out to a realtor BEFORE seeking a mortgage lender or broker. This is ok of course but you have to look at how much time a realtor invests in each client, how much time is spent searching for homes and how much time is spent showing these properties. Realtors' time is at a premium so I would suggest first reaching out to a mortgage lender/broker and asking for more than just a pre-approval. Sadly many lenders give out pre-approvals like candy at Halloween.

Instead ask for a True Approval, one where the lender actually runs your loan through what we call CAP, the Complete Approval Process where the only thing left is finding the home that you love.

You will find that realtors will be much more responsive once they know they are dealing with a truly qualified and serious buyer.
Web Reference: http://www.fpfraleigh.com
1 vote Thank Flag Link Mon Mar 5, 2012
Oh, boy, I could write a *book* on this topic! Here are some of the Top Tips I share with Home Buyers in the Cary/Raleigh/Chapel Hill area of North Carolina:
- start preparing to buy your home 9-12 months before you want to move in, small steps to improve your credit now can have a *huge* impact on lowering your mortgage rate
- drop by Open Houses in different price ranges and different areas - each house you walk thru will teach you more about what you like - and don't like! - in your first home
- organize your financial paperwork. Banks are eager to lend money for mortgages but they are required to collect and verify a ton of information. Set up a filing system that makes it easy for you to locate and copy paystubs, bank statements, taxes filed, etc. You'll be glad you did!
- get a free online copy of your credit report from http://www.annualcreditreport.com, check it carefully for errors and begin the process to correct erroneous information
- and find a *great* agent! There are some super agents in every area! Unfortunately you may have to cull thru some not-so-good agents to find 'em. Be sure to ask each agent if they are full-time professionals - do they feed their family thru real estate? In this market you want a true professional, not a 'dabbler' to help you navigate the landmines of buying your first home.

Hope this helps and happy house hunting!
1 vote Thank Flag Link Sun Mar 4, 2012
This is a great forum of answers.
Here is my 2 cents worth.

When you meet with a lender to determine what you can afford, do not look to purchase the max value or loan amount. Owning a home takes time, effort, maintenance and money.

Don't max out. Keep the extra cash and maintain your home properly.
Value saved. Value earned. Peace of mind.
0 votes Thank Flag Link Sat Mar 17, 2012

There's a lot of great information provided in the previous comments and I would just like to add one that I did not see mentioned. Once you have been approved for a loan, search for areas (or have your chosen agent do so), neighborhoods close to work, schools, day care etc. where you think you may want to be then drive through those areas just to get a feel if the place(s) will meet your expectations, be comfortable, reasonable commute times, provide access to leisure activities, etc...Knowing the areas you want to be in will save time in the actual home viewing process. Good luck and have fun.
0 votes Thank Flag Link Tue Mar 6, 2012
Before you spend your precious time looking for houses, research for a good realtor and talk with her over the phone. After knowing your housing criteria/needs, she will be able to connect you with a loan officer who can get you pre approved based on your housing situation/needs. (Example you may qualify for a loan with downpayment assistance, or you may need a USDA loan, etc. etc.). It is critical that you talk with a loan broker/officer so you can determine your buying power. After knowing the amount of house you can buy, you can meet the realtor you have selected at their office. Ofterntime, they can offer you a 1 to 1 1/2 hours of free consultation where you can ask all questions at no cost to you. Also, be knowleageable of the real estate buying processes. By getting all the information and by being knowleageable of the process, you will be able to make a good buying decision. Good luck!
0 votes Thank Flag Link Mon Mar 5, 2012
1) Find a Realtor who you feel comfortable will be looking out for Your best interest.

2) Don't share all your confidential information with everyone you speak to including agents not representing you, sellers, and friends. Don't post all your confidential information on facebook and other social medial places.

3) Before looking at houses, get pre-approved with a lender so you'll know how much you can afford and that you can move forward without any issues. You don't want to get your heart set on a home you can't afford.

4) Make certain you are comfortable with the payment you qualify for including taxes, insurance, and HOA fees!

5) Communicate your home needs and likes and dislikes with your Realtor so they can help you find the best home that meets your needs.

6) Plan for a home and pest inspection at the very minimum. Ask your Realtor what other inspections you might consider.

7) Many first time homebuyers are a little nervous about buying that first home. That's very normal. It gets a bit more comfortable with subsequent homes because you're more familiar with the process. Try to enjoy the process as much as you can.
Web Reference: http://www.carlafreund.com
0 votes Thank Flag Link Mon Mar 5, 2012
1. Connect with a good mortgage banker. Make that person your financial partner until you own your home. Make no significant financial moves including new lines of credit of any sort without consulting your lender regarding the impact on your credit profile.
2. Get educated as to what you can afford without busting your budget.
3. Don't buy the maximum you are told you qualify for. If it doesn't break you, it will certainly keep you awake at night.
4. If you don't know how to pick a mortgage banker, start with real estate agents and ask for referrals from an agent.
5. Plan for an orderly transition to your new home. Don't plan that you must move in the same day you close. Close with a minimum of a week to ten days left on your current lease or living arrangements. There is always something to do, or a delay that can be very stressful if you don't have some leeway on your calendar.
6. Expect to have unexpected expenses. When thinking of your monthly costs, don't forget to include savings, emergency funds, property taxes, HOA dues, and other costs. If your furnace dies, and you need $4500 to replace it, will that be a nuisance, or will that be ruination?
7. At some point you will probably engage a Buyers Agent. This means, in NC, that you will have to sign a Buyers Agency Agreement. 1st time buyer, or 10th time buyer, Never sign a Buyers agency agreement without an Escape Clause. I always include "Either party may terminate this agreement at any time prior to location of a suitable property." No one wants to be locked into working with someone when the relationship just does not feel productive.
Read this brochure, which all agents are bound to review and discuss with you: http://www.ncrec.gov/pdf/brochures/WorkingwAgents.pdf
8. Plan to not fall in love with a home. Buy a suitable house and learn to love it over time. Falling in love when buying creates great stresses for folks.
9. Try to have some fun, while staying objective. It should be exciting for you, but your agent should help you stay grounded and realistic.
0 votes Thank Flag Link Sun Mar 4, 2012
All the answers below are good. Get a good Realtor, take you time, ask questions, and have fun it's a learning process. And most importantly give me a call.
0 votes Thank Flag Link Sun Mar 4, 2012
I have a few good tips to offer as well.

Find yourself a BUYER agent, one who specializes in buyers and puts his or her focus there. A good start is the Real Estate Buyer Agent Council or REBAC where you can find Accredited Buyer Representatives or ABR's. They will NEVER be impatient with your questions and will give you patient tours of your surroundings until you are comfortable with a neighborhood and not just a house. Here's another good tip having to do with your lender - have a few months of mortgage money saved up in your checking or savings before you try to go house hunting. Many of the low down payment programs do require some cash assets into the deal or in an account for reserves. It's been heartbreaking when a first time buyer has a good credit score and good income, but then loses the home because they have no assets. Also, do not try to pay down all your credit cards, do try to keep your balances below 50% of your credit limit, do pull a free credit report before you go househunting, DO talk to a lender to get prequalified and under no circumstances should you buy a car or appliances or take out ANY new credit before closing. It's tempting to buy some things for the home but your credit will most likely be pulled one more time before closing, and any new cards or new debt could significantly impact your score. Finally, DON'T terminate that lease until you are fully approved for the home and be careful about any early lease termination fees you will have to pay because, again, if you need reserves to close and the landlord wants the termination fee up front, that could hurt you. Good luck and home to see you here soon!
0 votes Thank Flag Link Sun Mar 4, 2012
Interview a couple of Agents and pick one that you feel comfortable with, they will save you a lot of time and guide you smoothly through the process if they don't get another Agent. Allow approx 3 months to shop, pick out and actually buy your home, it will take that long if you are well prepared. There are way more good Agents out there than not, unfortunately one bad one leaves a lasting impression.
0 votes Thank Flag Link Sun Mar 4, 2012
Do not wait until your lease is nearly up before starting the homebuying process, because it could take 6 or more weeks. Don't depend on one person or one friend to tell you all the most important information. Fire the lender or Buyers Agent who is readily impatient with you you asking many questions. If you choose a 'big' name Realtor, and you don't find a house in the first week, you may get put onto a Junior Agent. Doesn't mean that person is incompetent: its that the first agent isn't wild about you, but is now willing to share a 'piece' of their commission with someone else.

If you're preapproved for $200k, consider houses under $150k. Make sure you are comfortable with the payments before signing any contracts. If your car is over 10 years old, look at a house under $125k - just in case it needs to be replaced sooner than you'd like.
0 votes Thank Flag Link Sun Mar 4, 2012
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