First-time Home Buyer Advice
Habits and routine are what we rely on to keep life flowing smoothly. Fear of the unknown is very common and nothing to be ashamed about. I have found that as soon as I start asking questions, there are a lot of people who will gladly give advice from their experience. Asking advice from others is a great opportunity to avoid mistakes that someone else already made. We don’t all need to make the same mistakes to learn something, do we?
Buying a home for the first-time can look like a frightening and impossible task. My goal is to help educate you on what to expect and help you feel comfortable and relaxed through the whole home-buying process.
Step 1. Talk to a Lender
“But I haven’t even looked at any houses yet so how do I know what to ask for?!” This is a common misunderstanding. The primary concern in buying a home is understanding what you are capable of and comfortable with paying on a monthly basis. First, contact a local lender who has experience in the area that you plan to buy a home and who will actually be able to answer the phone when you have questions. Getting a prompt response is extremely important in most of the steps you will be taking. Internet lenders can work but leave the door wide open for misunderstanding and hidden information. A lender will also help you determine what price range of a home you can afford, once they figure in interest rate, terms, closing costs, taxes, etc. Too many buyers have been disappointed to learn that they can’t afford any of the dozen homes that they looked at and then find it hard to be satisfied with what is affordable for them.
Step 2. Talk to an Agent
An experienced agent with a positive attitude will be a huge asset in your home-buying process. An agent should also be someone you can develop trust in as an advisor since you will have a lot of questions for them. Make sure your personalities don’t clash because you may need some humor and hand-holding to get through offers, negotiations, inspections and all that fun stuff!
How should you find an agent? Talk to your friends and family who purchased or sold a home recently and ask who they worked with and what their experience was. Browse agent bios on Trulia/Zillow. Ask an agent to show you a house of interest and determine if you are comfortable working with them. You will be asked to sign a contract for an agent to exclusively work for you in finding a home so make sure you are comfortable before you sign! If you skipped Step 1, your agent will likely ask you to complete that before they will proceed further. Also, ask your agent if they have a buyer’s fee since some companies have a franchise fee that they pass on to the buyer. A professional real estate agent with an independent company may not charge you that fee and be able to save you up to $500! The seller is the party who pays commission which gets split between the seller’s agent brokerage and the buyer’s agent brokerage, so you can actually have an agent represent you through this whole process at no cost to you!
Step 3. The Home Search.
Now that you have done all this work, you are anxious to get out there and tour a few homes that you have seen. Hopefully you have a clear idea on what area to focus your search. Also, write a list of your criteria for your new home and then see how each one measures up to that. Touring a few homes will help you decide what style and layout you like, if you were uncertain. Try to look beyond worn carpet and repulsive paint choices, because those are items that you can change for a small fee. If you like the rest of the package, just do some math on the cost to make it how you like and figure that into your offer. You likely will not find a home that fits your criteria perfectly, so be willing to compromise on items of less importance for a home that comes really close!
Step 4. The Offer
Your agent’s advice in writing an offer is very crucial. They can advise you on market conditions and comparable home values as well as what terms may be acceptable to the seller. A clean offer is important. You likely will have inspection and mortgage contingencies, but try to keep as many other contingencies (such as the owner replacing the front door) out of the offer. Your lender and agent can advise you about asking for seller assist. Be familiar with the “Agreement of Sale” before you come to the table so that you know what you will have to think through and sign for. You may likely receive a counter-offer, so be prepared to come back to the table to decide what terms you are willing to meet to make this home yours.
Step 5. Settlement
Your lender will normally need 30 days or more to complete the mortgage process so figure that you may not take possession of the property till 45-60 days depending on inspections and your lender’s process. Finally, you will be handed the keys to make this house your own home!
Remember, if your agent did an excellent job in helping you through the transaction, the highest compliment is to refer your friends and family to them!