First Time Home Buyers Guide


First Time Home Buyers Guide...

Adulting is hard…but it’s a lot of fun! One of the most fun yet stressful things you’ll do in life is buy your first home. It’s a very exciting time in life that brings promise of what the future holds. The way to have the BEST possible experience is to be sure you’re well educated on the process so you can avoid pitfalls that are often very costly. Here’s a guide to help you along the way.

Are You Read To Buy?
The very first step is to be sure you’re ready to buy a house. Buying a house brings a lot of responsibility that includes, at the least, being able to pay the mortgage and bills as well as the maintenance and upkeep. Have you been saving for the down payment? Since the 2008-2009 market crash, many lenders now want buyers to have 20% of the purchase price for a down payment. There are still plenty of 95% loans available, but you need to be sure if that’s the most suitable finance plan for your situation. Regardless, you’re going to be better off in the long run by saving as much cash as you possibly can. Ramen Noodles and cereal for dinner is a great way to start!
Be sure to also compare owning vs. renting. Is owning really the best option now? There are advantages to each depending on what your current situation is and what your future holds. Some circumstances make renting the better option…like if you need to save for a down payment or take some time to improve your credit rating. Most people benefit from buying a home rather than renting since it becomes great financial leverage quickly. Check with your lender to determine if your credit rating is high enough to get a loan at the level that makes sense to buy rather than rent. (I have some great recommendations on lenders)

 How Much Can I Afford?
This should be a very simple equation, right? It can be…if you don’t have any debt at all, have a solid income, and have saved for a down payment. If those don’t apply, you’ll need to do a little work. I recommend first calling a mortgage lender to get pre-qualified. The lender will walk you through the process and help you understand exactly how much house you can afford. My mom used to say, “buy as much house as you can afford and grow into it.” I believe she was right. A house can become a great leveraging tool for future financing opportunities. I used equity in my house to start a business, for example. I’ve also bought 2 cars with equity and enjoyed the nice tax break and paid myself the interest rather than the bank. If you’re knee deep in debt, focusing on minimizing debt would also be a good idea. But the absolute key is save, save, save! Be sure you’re saving as much money as possible for the down payment. You can end up spending more down the road with Private Mortgage Insurance if you don’t have 20% to put down.


Decide On What You Want
Here’s where things start to get serious. You want a house with the master on the main level. Your spouse wants the master upstairs. You want white cabinets. Spouse wants dark cabinets. You want carpet…spouse hardwood. Where does it ever come together? My recommendation would be to start paying attention at your friend’s homes. What do you agree that you like? What do you agree you don’t like? The reality is once you get it all figured out, it just might change once you start looking. The key is to begin with your price range and then start looking at what’s for sale online. Use a powerful search like the one at www.buyhomesgreenville.com to start looking at the homes currently listed. You can start to narrow your choices down simply be checking out what’s available in your price range. Now that you’ve figured out what you’re looking for, it’s time to get serious.

Choose A Realtor®…The RIGHT Realtor For YOU
This has got to be the most important factor in the process and can make it a very enjoyable experience...or make it miserable. You need to find a Realtor® that knows the market well so that they can match what you’re looking for with what’s available for sale. Most realtors have access to the MLS system and can find homes that match your criteria but if they don’t fully know the market, they may waste your time showing you homes in areas you’ll definitely not want to live. Another important aspect is someone that understands and takes command of the process. Buying a home is vigorous and the selling price is only the beginning. Be sure to find a Realtor® that can guide you from sales contract to inspections, repair negotiations to appraisal, and then final inspections and closing. There are a lot of details involved and you need someone to guide you through. There’s nothing at all wrong with calling several and asking what they do that’s different or unique. A Realtor® that can tell you what makes them different succinctly is probably worth interviewing. Communication is the most important factor in your relationship! The MOST IMPORTANT factor of your buyer/Realtor® relationship! If you find someone that doesn’t communicate well, it’s not only frustrating but can also cause you to miss out on a home because the market is so hot homes can be gone within a day of listing. Above all else, find a Realtor that communicates well, and you’ll have a good experience.


Home Search
And so it begins! Here’s where it gets fun! Narrow down your search criteria to find homes that you can afford and have the features you want. Your realtor can help develop a plan for looking at potential homes. Be sure you have the listing information for each house as well as the Sellers Disclosure Statement to answer questions like the age of the roof, HVAC, and water heater. There will also be information about any previous repairs done that might explain a water stain on the ceiling or the type of water supply pipes. Take notes as you go through the house. Write down things you like and don’t like so you can refer back when you’re reviewing all the homes you saw. Believe me, you will NOT remember everything. If you don’t find your “dream home” immediately, don’t get frustrated…just be patient and keep looking. DO, however, set your expectations from the outset that you may only find a home that is close to perfect. Keep in mind that if a house is close to perfect, all you have to do is make some changes to make it perfect!

Make An Offer
Now that you’ve found the right house, it’s time to “do the deal”. This is where your Realtor® needs to have a firm grip on the market conditions so they can evaluate what a good offering price would be. There have been many instances in the last 12-15 months where homes sell for more than the asking price. On average, however, most homes close for somewhere between 95%-98% of asking price. There are SO many variables, though, so it helps to have a Realtor® that is in touch with the market to help navigate the process.  UPDATE 4/8/2022  -  Many homes are selling for 10%-20% OVER list price with no contingencies. In some cases buyers are paying for sellers closing costs and even paying realtor commissions to make the contract more attractive. Creativity helps a lot in this insane, multiple-offer market we're in.

We Have A Contract…Now What?
I always tell my buyers that the real negotiations occur in the inspection period. Once we have a contract an inspection is performed to look for items that need repairing. This process requires an inspector that is thorough…and a Realtor® that knows the inspectors that are good! This process is crucial to ensure the house is in good repair and it’s systems are in good working order. Once the inspection is done a repair request is submitted to the sellers. The sellers are only obligated to repair items that fall within section 8 of the sales contract. Sometimes a seller will discount the price rather than do the repairs. There are a lot of variables in this process so be in tune with what’s going on.

Closing
If everything leading up to the closing has gone smoothly, the closing should be smooth and pleasant. Not all closings are smooth though. Some closings require separate rooms for each party due to ill will developed during the sales process. My goal is to have both parties in one room and everyone enjoying the process! This happens when communication is at the forefront and all the little details are examined along the way. Buying a home is the biggest invest most people undertake. It should be an enjoyable process that leads to a long and happy life in the home.

So there are the basics in the home buying process. If you’re looking to buy a home, be sure to check my search function

Comments

Post a Comment

Popular posts from this blog

Save for a Home with a Dollar-for-Dollar Match Program

Image
Save for a Home with a Dollar-for-Dollar Match Program A federal program helps low-income families buy a home with a unique method meant to encourage saving: It matches dollar-for-dollar what they save to buy their first home. The Individual Development Account, or IDA, doesn’t offer a lot of money to help with a down payment — up to $2,000 in federal matching funds with more contributions possible from local IDA programs — but it’s a start. Participants can start by saving as little as $25 — matched to as much as eight to one, depending on the program, though most offer one-to-one matches. Income levels must be 200 percent below their state’s poverty level. With an 8:1 match, IDA participants can raise much more than the $4,000 total with federal matching, and could have $10,000 or so for a down payment on a house. Most IDAs are funded by the federal government and are run by nonprofit groups and financial institutions, and grantee programs are required to raise an equ...
Read more
Image
  Ending Small Talk: Tips for More Meaningful Conversations Having more meaningful relationships with friends both new and old is a great goal, and it can start with your conversations. Below are five tips for those of us frustrated with small talk. Skip the weather.  As tempting as it may be to springboard off the weather, this can lead you down the empty-conversation rabbit hole and into a twenty-minute dialogue about rain. Asking about almost anything else should yield more interesting results. Think of base questions.  So, what should you talk about, if not the weather? Come up with a short list of base questions you can turn to in a flash. If you’re talking to a stranger or new acquaintance, try “have you done any traveling lately?” or “are you reading any good books?” These more personal questions show genuine interest and will actually reveal something about your conversation partner. Make eye contact.  Regardless of what you’re discussing, work to maintain or...
Read more

How to Help Home-Bound Teenagers Cope Stay-at-home restrictions are challenging for everyone, especially teenagers. In the wake of the coronavirus pandemic, teens – who would normally just be starting to enjoy life as independent beings in the world – are suddenly back under the purview of mom and dad. To make matters worse, many teens have had something extremely important to them suddenly ripped away: a lead in the school play, a varsity spot on the team, prom, graduation, a part-time job, etc. On top of that, their all-important social life is now off limits as well. What’s a parent to do? While nothing will come close to replacing the life your teenager had been living, here are a few strategies to help your teen cope: Make sure they’re informed. Teens are masters of disguising their true feelings, so don’t misread their cool demeanor as apathy. They might be getting the bulk of their information through social media, which is not always accurate and may be causing undue alarm. Be sure to calmly keep them apprised of the developments surrounding the coronavirus, explaining why the restrictions are important. Don’t withhold information out of fear of worrying them. Listen to a trusted news source together so that the information is coming directly from the experts, not their “overreacting” parents. Give them a social outlet. It’s critical that your teenager is still able to connect with friends during this time. Encourage social distancing activities they can do with a friend, such as hiking, running or biking. Let them take the car to a nearby scenic spot and hang out side-by-side with a friend in another car. Give them privacy to use the family computer to host a Zoom “meeting” or Google hangout with multiple friends. At all costs, make sure your wifi is up to snuff so that your teens can easily text, use social media and Facetime to stay connected. Help them earn money. Your teenager may be depressed about losing a job, but you can easily come up with some jobs around the house for your teen to take on to earn some money. Have them help you with some small tasks related to your job while you’re working from home, or a project that will get them outside, such as spring yard clean-up. While the financial incentive is a big plus, the real benefit is getting their minds focused on something other than the situation at hand. Keep student athletes in shape. While staying active is essential for all teens in this situation, it’s particularly important for your student athlete who is used to a rigorous work-out schedule, and could respond negatively to suddenly being sedentary. Check in with coaches to see if they’ve put a work-out schedule in place or are perhaps hosting online group workouts. Remind your athlete that keeping their fitness level up is essential so that they can return to sports without missing a beat. Embrace family time. While the hectic pace of life before the pandemic might have made you and your teenager ships that pass in the night, you’ve now got lots of time together, so make the most of it. Eat meals together, binge watch a series together, play cards, get the old photo albums out, etc. The idea is to make sure your teenager doesn’t stay holed up all day in his or her room. So make some interactive time mandatory.

Image
How to Help Home-Bound Teenagers Cope Stay-at-home restrictions are challenging for everyone, especially teenagers. In the wake of the coronavirus pandemic, teens – who would normally just be starting to enjoy life as independent beings in the world – are suddenly back under the purview of mom and dad. To make matters worse, many teens have had something extremely important to them suddenly ripped away: a lead in the school play, a varsity spot on the team, prom, graduation, a part-time job, etc. On top of that, their all-important social life is now off limits as well. What’s a parent to do? While nothing will come close to replacing the life your teenager had been living, here are a few strategies to help your teen cope: Make sure they’re informed.  Teens are masters of disguising their true feelings, so don’t misread their cool demeanor as apathy. They might be getting the bulk of their information through social media, which is not always accurate and may be causing...
Read more