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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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5
Hi There,

I have a slightly different approach than the others here and I had to answer it in two responses because it was so long, so I apologize it is broken up.

1 - My first tip is - and it's a big one so I apologize if it's a little long - that if you have not already spoken to a lender, pick your real estate agent first. This is the person you will be working closest with throughout the whole process, spending a lot of time in a car with them, and will, most likely, have a personal relationship with. An experienced agent will have a list of qualified lenders they work with on a regular basis. They work with them not only because they will offer the best loan packages, but because of the service they regularly give to their clients. This is why I have a small list of lenders I recommend my clients to - personal service, answer the phone day or night as well as a willingness to meet face-to-face with my clients. Believe it or not, some lenders want to do everything over the phone and never even meet their clients. My lenders also keep me aware of loan packages they have available for clients that have certain qualifications that a buyer may not even think to ask a lender about. For example: There are still 100% mortgages available. The VA offers a 100%, and sometimes higher, mortgage to military veterans and their families. Also, in rural areas (population of 10,000 or less) the USDA offers a 100-110% mortgage to those who qualify at or below the median salary range for that specific area. Non of the larger banks I know will even offer this loan because it involves a lot of paperwork, but smaller local banks are happy to offer this program.

2 - To help yourself, and your Realtor®, make a top 10 list of what is important to you in a home. These are in no particular order, but will give you an idea of what to put on your list and I'm sure you can think of others, but this is a basic list.
1:Location
2:Schools
3:Commute
4:Size-BR, BA, Sq. Ft., yard, garage, etc
5:Age of home and style: new build, older home, victorian, rancher, traditional, contemporary, etc - or if you are interested in a condo and what style of building
6:Price
7:Timeline for purchase
8:Any special needs - ex: handicapped accessibility
9:Ideal Kitchen
10: Ideal Master bedroom

3 - When you have selected a lender, make sure you have your pre-approval from your lender ready to go with your Realtor®, because when you find your ideal home, most likely it will also be someone else's, and you don't want to lose it because of a paperwork delay.

4- When you find a neighborhood you like, visit it at night, as well as the daytime. This will tell you a lot about your the neighborhood that you will never see in the light of day. And, as mentioned before, you can introduce yourselves to neighbors and ask them questions about how they like living there, or what they don't like. I had one client considering buying a house, until we spoke to a neighbor unloading groceries next door. She basically said, run...run as fast as you can away from this neighborhood! I'm trying to myself!

5 - You may not need as much money as you thought for a down payment. FHA loans, which make up a majority of mortgages, only require 3.5% for a down payment. Also, if cash-on-hand is an issue, have your agent request closing cost help in the contract. Most sellers will agree to this, depending on the price point. Your agent will check with your lender on exactly how much your loan will allow you to receive in concessions.

6 - If you are on-the-fence about really pulling the trigger and buying a house, or are still thinking about continuing to be a renter, let your Realtor® know this up front. It will save both of you a lot of time and effort if your Realtor® is not willing to work with someone who may not get to closing.
1 vote Thank Flag Link Mon Mar 5, 2012
7 - Out-of-pocket expenses to expect before actually buying a house: a) home inspection will run around $300-$500 depending on the size and age of the home. It may be a little more or less expensive, depending on the area of the country. HAVE a home inspection done, even on an as-is property. It will reveal a lot. b) appraisal costs - if you get to closing this will become part of the closing costs. If you decide to back out of the contract after the appraisal, you will receive a bill for this cost. This will run upwards of $500. c) termite inspection, if required to be paid for by the buyer, will run anywhere from $35-$100 depending on the company, the size of the house and the thoroughness of the inspection d) radon inspection, if you choose to do one, will run $50-$150, depending on the size of the house, throroughness of the inspection and the company used. e) well and septic inspections will vary greatly depending on the house location and how thorough an inspection you order. I can't even give you a range, because of the large differences across the country.

8 - Finally, do a lot of research on your own. Your Realtor® is only allowed to legally give you certain information. We cannot tell you anything about the neighborhoods, beyond amenites, comparables, etc. We cannot tell you anything about schools. We cannot answer anything about crime. To answer any of these questions would put our license in jeopardy as it could be considered "steering".

I hope this helps!
:)
Kelly

Kelly Putz
DC/MD/VA
Keller Williams McLean-Great Falls
kelly.putz@gmail.com
703-961-8663
0 votes Thank Flag Link Mon Mar 5, 2012
Great question! Here are some of my tips for first time homebuyers:

1. Get preapproved. The most important step a potential homebuyer should make, in my opinion, is getting preapproved. You’ll know what you can afford and what you should plan for in terms of closing costs. It is also helpful to shop loans. Buyers should also know that lenders don’t always offer the same interest rates, so loan shopping can help save money.

2. Find your Realtor. Once you’re preapproved, select a Realtor. Ask around. Get references. Speak/meet with potential agents. Find someone that is knowledgeable, understands what you are looking for, and will work hard to make your dreams become a reality.

3. Be realistic. Determine what your needs and wants are in your home, but be realistic in your expectations. Make sure you know your “must haves”, but also which things are just “nice to haves”. You may not find the perfect house, but with time you can likely add those “nice to haves”, and make a home that’s perfect for you.

4. Remember: Time is of the essence. When a great property hits the market, it’s probable others will like it as much as you do. If you’re seriously interested in a property, you’ll need to move quickly. It could be gone before you know.

5. Check out the neighborhood. Homebuying is definitely about the house, but you’re also committing to the neighborhood. Visit the area at different times to check it out. Learn about the commute to/from work, shopping and schools. You can also introduce yourself to potential neighbors to get their feel of the area too.

6. Home inspection. Once you’ve chosen your home, make sure you get a home inspection. It’s so important to know all that you can about the home before you fully commit.

7. Home warranty. Invest in a home warranty. A couple hundred over a year may save you thousands. Trust me, there’s nothing worse than moving into your new home and a major appliance breaks down. With a home warranty, you pay a reasonable deductible, and if your item cannot be fixed, it’s replaced. Most importantly, you save great deal of money if you do have to get something new.

8. Enjoy your home. You may be house poor for a while, but overall, you’ll be able to enjoy the benefits that come with home ownership, from tax benefits to bragging rights!
Web Reference: http://www.findmdhouses.com
0 votes Thank Flag Link Sun Mar 4, 2012
Meet with a lender that you trust to make sure that you know what you can afford and what closing costs are likely to be so you know what to budget for. Once you know what you can afford, then think in terms of what your comfort level is. You never want to be house poor.

Find an agent that you trust and is experienced in working with first time home buyers. I love working with first time homebuyers and think that my legal background is particularly useful. Remember that this should be all about you. Run, do not walk, to the nearest exist if you feel that the agent is pushing you to make a decision before you are ready to purchase.

Take several months to "try on the market." Explore neighborhoods and look at different properties without thinking of any of them as your future home. You should become knowledgeable about neighborhoods, prices, values, and possibilities. Then when you see that perfect home you will be ready to jump on it. Good properties go quickly. If you don't have confidence in your knowledge of the market, you will pass up that perfect home!

Live in the stage of life that you are in now. You may be married in five years or have three children in ten years. BUT, you may not. Pick your home for where you are now - not where you think you may be later. Buy well so that there is a chance for future appreciation - and enjoy! I would love to talk with you further. Just give me a call for a recommendation to an agent in San Francisco if you aren't moving here to DC and happy hunting! Lise
Web Reference: http://www.lisehowe.com
0 votes Thank Flag Link Sun Mar 4, 2012
Meet with a lender that you trust to make sure that you know what you can afford and what closing costs are likely to be so you know what to budget for. Once you know what you can afford, then think in terms of what your comfort level is. You never want to be house poor.

Find an agent that you trust and is experienced in working with first time home buyers. I love working with first time homebuyers and think that my legal background is particularly useful. Remember that this should be all about you. Run, do not walk, to the nearest exist if you feel that the agent is pushing you to make a decision before you are ready to purchase.

Take several months to "try on the market." Explore neighborhoods and look at different properties without thinking of any of them as your future home. You should become knowledgeable about neighborhoods, prices, values, and possibilities. Then when you see that perfect home you will be ready to jump on it. Good properties go quickly. If you don't have confidence in your knowledge of the market, you will pass up that perfect home!

Live in the stage of life that you are in now. You may be married in five years or have three children in ten years. BUT, you may not. Pick your home for where you are now - not where you think you may be later. Buy well so that there is a chance for future appreciation - and enjoy! I would love to talk with you further. Just give me a call for a recommendation to an agent in San Francisco if you aren't moving here to DC and happy hunting! Lise
Web Reference: http://www.lisehowe.com
0 votes Thank Flag Link Sun Mar 4, 2012
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