One of the many things I love about
being a Real Estate Agent is the variety that each day brings and the many
different people I get to interact with and help with their Real Estate
needs. At the top of the list for me is
working with first-time home buyers. Their
excitement, their questions, and then giving them the keys at the end is the
best! Below are some pointers that I share with my first-time home buyers to
help them get what they want and make the process as smooth as possible.
How Much Home Can You Afford? Purchasing a home is
expensive, so odds are you’ll need a home loan along
with a good-sized down payment.
Still, the question remains: What price home can you really afford? In general, experts recommend that your house
payment (which will include your mortgage, hazard insurance, and property taxes)
should not exceed 28% of your gross monthly income. For the most accurate assessment, head to a
lender for mortgage
pre-approval. This means the lender will assess
your credit history,
credit score, and other factors, then tell you if and how much you qualify for.
It’s important that you know what your estimated payment will be at your target
price point prior to writing offers so that you don’t have a sticker shock once
you get your offer accepted. It’s so easy in a multiple offer situation to set
your sights on winning that you forget you’re going to be living with the
payment. I’ve had many buyers qualify at a much higher amount than what they
are willing to pay in a payment so keeping that amount in the back of your mind
when trying to win the deal is imperative to feeling comfortable once you’ve
received acceptance. Finally, a Mortgage pre-approval also puts home sellers at
ease, since they know you have the cash for a loan to back up
your offer, and in this market, you shouldn’t start shopping without one.
Know There is No Such Thing as a Perfect Home- It’s your first
home—we understand if you’ve dreamed about the ideal house and don’t want to
settle for anything less. We know you’ve watched a million episodes of the
latest house hunting shows on HGTV, have Pinterest pinboards full of decorating
ideas, and have been scouring the internet for the best houses, but understand
that buying real estate is about compromise. Every
buyer has a list of wants. I tell buyers that buying a home is a process of
elimination, not of selection. You will look at multiple homes and rule out the
ones that don’t work to find the one that will, and usually that involves some
type of concession. Start with a list of what you are looking for in a home, determine
what your “must-haves” are, and then plan to be flexible with the other items on
your list. Often, buyers end up with
something different than what they thought they wanted in the first place.
Write a Solid Offer- This
is always important, but it’s especially important in the climate of our
current market. By now you’ve probably
heard that it is a seller’s market ad nauseam, so writing what those of us in
the business call a “clean” offer at a bare minimum is important. Now is not the
time to ask the seller to credit you towards closing costs, pay for your home
warranty and pay for various reports. In a multiple offer situation, those are
the very items that if requested, could move your offer to the bottom of the
pile. There are also many strategies
that your agent may recommend to you to help make your offer stand out ahead of
the rest. You may have heard of
non-contingent offers, escalation clauses, and the use of an option agreement as
some methods that can be utilized. It’s important that you understand both the
benefits and potential risks to any of these strategies before proceeding which
is why working with a professional is imperative.
Be Careful Who You Listen To- OK, it’s about to get personal. Everyone and
their brother is going to give you advice. I only wish I had a dollar for every time I’ve
heard about how your brother’s best friend’s mother-in-law Susie was a real
estate agent in Texas 20 years ago and she told you to offer….. or your BFF Joe
bought a house 2 years ago and they got the first house they made an offer on
and they offered less….I know, it happens.
Here’s the deal. Markets shift
constantly. The market from 2 years ago
is different than the market today and the market in Texas is different than
our local market. There can be small market shifts within the same market from
one week to the next. In addition, each
property within the same market can differ with how you approach making an offer.
For example, what is the location of the property? Are there offers on the property? What type
of financing are the other offers? What
are the price and terms of the other offers?
What are the needs of the seller?
When you are working with a true professional, these are the questions
they will be asking the listing agent and if they are able to get that
information, share it with you to help guide you in what kind of offer to
write. Listen to them. Susie and Joe mean well but they don’t have
their finger on the pulse of the market.
If you are a first-time homebuyer in our
current market, my hat is off to you.
Have patience, work with me, a professional Realtor® and my amazing lender and
in a matter of time, you will be getting the keys to your new home.