First Time Home Buyers Guide
FIRST TIME HOME BUYERS GUIDE
First Time Home Buyers
are rarely prepared for the roller coaster ride that unfolds during the course
of purchasing their first home. Often, they come into the experience with very
little knowledge or understanding of what it takes to purchase a new home.
Financing
There are so many
issues to become acquainted with, such as financing. This is an important area
that you should know as much as possible about. There are a number of ways to
finance your new home so it’s important to have a knowledgeable real estate
agent who can explain the various methods and advise you about which ones might
be best for your situation.
Some types of
financing are easier to acquire for those with poor or little credit. Sometimes
you can buy down your interest rate by paying more points. These are
complex issues that I as your agent will explain to you. I will
become a trusted friend over the course of searching for your new home and
purchasing it, so don’t be shy about asking questions if you don’t understand
something.
The First Step
The very first step,
even before you go out to look should be to get your loan pre-approval. I, as your agent will not know what price range of homes to show you unless I have already received your loan pre-approval paperwork. Most loans will require some
type of down payment so be sure you have that in order, along with your very
best credit rating.
If you think you may
have things on your credit report that could cause a problem, then go ahead
well in advance of seeking me out, and address those. You’ll
need a copy of your credit report. Go through it and make sure there are no negative
items. If you do find anything, then you may be able to work with your creditor
and the credit reporting agency to get these taken off.
Most mortgage loan
companies require you to have at least a certain number on your credit score
before they’ll loan you the money for a house. The VA and FHA are sometimes more lenient in these areas but
every situation is different. The more cash you can put down on the home, the
better. There is also a USDA loan which only applies to certain rural towns and you don't need a down payment to qualify.
Step Two
Once you have your
financing in order and you know what price range of a house you can afford,
I, as your real estate agent can begin showing you homes. It’s often best to sit down
with your spouse or other family members and talk about what you want in a home
before you speak to me.
§ How many bedrooms and bathrooms do you need?
§ Do you want a new home or an older home?
§ Could you deal with a home that needed work?
§ How much yard do you want or need?
§ Do you need to stay in a certain area for work
or school?
§ Do you need a garage or basement?
During one of your
initial meetings, I, as your agent will go over these issues with you and talk to you
about your “Must-Haves”. It’s my job to learn as much as possible about
the type of house you want and the neighborhood you’d like to live in. Once all
these issues are settled, you’re ready to go out searching for your new home.
Compromising
Many first time home
buyers come into the process wanting a great deal more in their first house
than they can really afford. By the time it’s over, they realize that they will
have to make compromises. For instance, if you’re looking in a prime area with
high demand, then it will be difficult to find an amazing deal on a home. In
these prime areas, homes go quickly and often for full price.
In some cases, there
may be multiple offers on a house and you would be required to offer the asking
price or even more in order to get the home of your dreams. Simply by changing
neighborhoods, you can usually get more for your money. As you move away from
the city and into suburbs, especially those that are not in as high demand, you
will find that you get a whole lot more house for your money.
If neighborhood is not
a critical item on your list, then do consider a less desirable area. You will
be rewarded with a larger home with more amenities. This can also present an
opportunity for you to maximize your home’s equity.
Let’s say you are
looking at a 1,100 square foot one story home in Dartmouth. The area where the
home is located is on everyone’s up and coming
list. You can purchase this home for $30,000 to $40,000 less in a similar house located
in New Bedford.
For first time home
buyers, it’s often best to go with the lower priced house to ensure that your
new payments fit well within your budget. There’s nothing worse than buying a
house that stretches your budget to the max and then not being to enjoy it as
much because of the strain on finances. It’s better to know that you will be
comfortable with your new monthly house payment before making an offer.
Making an Offer
Now you have found the
house of your dreams. After looking at dozens of homes, you finally walk into
that one house that feels like home to you. I will have a good idea of
whether or not the asking price is fair. But I will also do comparables
or “comps” for you so that you can see on paper what the other homes in this
neighborhood have been selling for.
If you go in too low,
you can insult the seller and then they will be difficult to work with from
then on. If you really love the house and want to purchase it, then it’s best
not to start off by making the seller angry. Offer a fair price and allow me to help you arrive at that price. I, as your agent have years of experience buying and selling homes in the greater New Bedford area, so take
advantage of my wisdom and expertise and let me help you come up with a
good first offer.
Usually, there are a
few back and forth negotiations. You offer $225,000 and the seller comes back
with $245,000. Then you come up to $235,000 and they come back with
$240,000. This is all a part of
purchasing a home and even though it can be stressful, I will guide
you through the process with the goal of helping you to get your very first
home at a great price.
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