First time homebuyers
2008-07-19
Many homes are perfect for a first-time buyer. First-time buyers are making a major purchase they have never attempted before, and may be unusually subject to the inevitable stress and anxiety that goes with buying a home.
First Time Buyers
People who are selling their homes should know something about the market group from which their buyers are likely to appear.
First-time home buyers are usually younger (between 25 and 34 years of age) and have distinct buying patterns. First-timers are often looking for homes that are smaller, and perhaps older, than repeat buyers. The median home size for first-time buyers is about 1450 square feet. Approximately four in ten first-timers will buy homes built before 1960, compared to two in ten repeat buyers.
First-time buyers are in the process of developing a clearly defined sense of what they want in a house. They may not have enough money to buy their ultimate dream home at first, but seventy-four percent say they like their new home better than their previous residence.
First-time buyers are in the process of developing a clearly defined sense of what they want in a house. They may not have enough money to buy their ultimate dream home at first, but seventy-four percent say they like their new home better than their previous residence.
Your Investment
Shelter is a very basic human need which most people accommodate by renting or buying a house or apartment. Rental property is often less-than-perfect. Tenants usually experience a rent increase every year or so and feel somewhat at the mercy of the owner. They don't necessarily feel a strong commitment to the property or the community.
Making a decision to buy a house is a major commitment, and the decision has both economic and emotional implications. Instead of paying the landlord's mortgage every month, homeowners pay their own mortgage and build up equity in their investment. When they paint, plant flowers or make improvements, their family reaps the benefits of a more beautiful environment. Homeowners are much more selective than renters about finding the perfect home, and their sense of personal satisfaction heightens the pride of ownership.
Making a decision to buy a house is a major commitment, and the decision has both economic and emotional implications. Instead of paying the landlord's mortgage every month, homeowners pay their own mortgage and build up equity in their investment. When they paint, plant flowers or make improvements, their family reaps the benefits of a more beautiful environment. Homeowners are much more selective than renters about finding the perfect home, and their sense of personal satisfaction heightens the pride of ownership.
Finding a Real Estate Agent
Finding an experienced, reliable real estate agent whom you like and trust is the first step in locating your new home. Here is an approach to finding the right agent.
Call or stop by a real estate office and ask to speak with the manager. Describe the type of home you are looking for. The manager can refer you to an agent who knows that market very well. You might also use weekend "open houses" as opportunities to look for a real estate agent, as well as a new home. It is really a matter of chemistry! If you meet someone who is knowledgeable and with whom you feel comfortable, call that person!
Once you establish a strong working relationship with a real estate agent, your agent can show you a number of homes for sale, even if they are listed with other companies. Often the agent can show you a property as soon as it is placed on the market. Many of the best homes never even make it to the weekend classified section of the newspaper!
Call or stop by a real estate office and ask to speak with the manager. Describe the type of home you are looking for. The manager can refer you to an agent who knows that market very well. You might also use weekend "open houses" as opportunities to look for a real estate agent, as well as a new home. It is really a matter of chemistry! If you meet someone who is knowledgeable and with whom you feel comfortable, call that person!
Once you establish a strong working relationship with a real estate agent, your agent can show you a number of homes for sale, even if they are listed with other companies. Often the agent can show you a property as soon as it is placed on the market. Many of the best homes never even make it to the weekend classified section of the newspaper!
Services from a Real Estate Agent
It's an old adage that "the best things in life are free." One of these things is extremely valuable to home buyers -- the advice of an experienced real estate sales professional.
In the traditional home sale, it is the seller who pays the commission that is divided among the various sales professionals involved in the transaction. Unless you are hiring a buyer's broker, the buyer gets several free services from the real estate agent: 1) Target marketing that locates the homes you can afford; 2) Loan pre-qualification that saves you time; 3) Guidance in obtaining the best mortgage terms.
The marketing professional knows that if there is no financing, there is no purchase. Most real estate agents have become quite expert in the mortgage market. Please contact a real estate professional if you are seeking advice about buying or selling a property.
In the traditional home sale, it is the seller who pays the commission that is divided among the various sales professionals involved in the transaction. Unless you are hiring a buyer's broker, the buyer gets several free services from the real estate agent: 1) Target marketing that locates the homes you can afford; 2) Loan pre-qualification that saves you time; 3) Guidance in obtaining the best mortgage terms.
The marketing professional knows that if there is no financing, there is no purchase. Most real estate agents have become quite expert in the mortgage market. Please contact a real estate professional if you are seeking advice about buying or selling a property.
Questions from Real Estate Agents
Real estate agents begin their professional relationship with buyers by asking numerous questions about the buyer's personal and financial situation. The answers to these questions will give the real estate agent a clear idea about the buyer's housing needs and price range. It is a waste of time for an agent to show a buyer homes they can't afford, and it can be disheartening to consider unrealistic possibilities.
In order to do a great job finding you a home, your real estate agent needs to have some basic information about your income, debts, and the amount of cash you have available for a purchase. Your agent also needs to know something about your lifestyle. How large is your family? Where do you work? Do you have school-age children? Do you enjoy entertaining? What hobbies would you like to accommodate?
The real estate agent who helps you find your new home will get to know you very well, so it is very important that you feel comfortable with that person and free to communicate openly.
In order to do a great job finding you a home, your real estate agent needs to have some basic information about your income, debts, and the amount of cash you have available for a purchase. Your agent also needs to know something about your lifestyle. How large is your family? Where do you work? Do you have school-age children? Do you enjoy entertaining? What hobbies would you like to accommodate?
The real estate agent who helps you find your new home will get to know you very well, so it is very important that you feel comfortable with that person and free to communicate openly.
Making Your Dream Home Come True
Is it time to initiate the purchase of your first home? You may be starting a family and outgrowing your small apartment. If the time seems right to seriously consider buying a house, but you are afraid you don't have enough cash, don't worry!
Real estate agents are experienced in helping first-time buyers locate the financial resources to make such a move. The first step is to sit down with an agent who is familiar with available loan programs. You will need money for the down payment, and your income must be high enough to meet the lender's qualifying standards.
Real estate agents may be able to minimize the amount of cash needed with a little help from either the sellers or the loan company. You might be able to include some of the closing costs in your mortgage. The sellers might consider a lease/purchase agreement which would allow you to rent for a few months while accumulating the funds you need. If you are ready to buy your first home, let your real estate agent assist you in making your dream a reality.
Real estate agents are experienced in helping first-time buyers locate the financial resources to make such a move. The first step is to sit down with an agent who is familiar with available loan programs. You will need money for the down payment, and your income must be high enough to meet the lender's qualifying standards.
Real estate agents may be able to minimize the amount of cash needed with a little help from either the sellers or the loan company. You might be able to include some of the closing costs in your mortgage. The sellers might consider a lease/purchase agreement which would allow you to rent for a few months while accumulating the funds you need. If you are ready to buy your first home, let your real estate agent assist you in making your dream a reality.
The Elements of Location
When you are in the market for a home, how should you evaluate the properties that appeal to you? There is an old cliché about the three most important factors of a piece of property--location, location and location.
Some neighborhoods have a certain distinction that attracts buyers, but there are other factors to take into account. A house in the best part of town may have a few points subtracted if it is located on a busy street. There are buyers who would like to be close to schools, shopping, and churches, but don't want to live across the street from these facilities. You may want an easy commute to your job, but would not consider a location close to the "on" ramp for the major route into town. A location close to an airport could be convenient if you are a commercial pilot, but could make it difficult to sell even the most wonderful house.
As you balance all of the factors, remember that a location liability which gets you a great house at a reasonable price will probably require you to pass a similar savings on to future buyers.
Some neighborhoods have a certain distinction that attracts buyers, but there are other factors to take into account. A house in the best part of town may have a few points subtracted if it is located on a busy street. There are buyers who would like to be close to schools, shopping, and churches, but don't want to live across the street from these facilities. You may want an easy commute to your job, but would not consider a location close to the "on" ramp for the major route into town. A location close to an airport could be convenient if you are a commercial pilot, but could make it difficult to sell even the most wonderful house.
As you balance all of the factors, remember that a location liability which gets you a great house at a reasonable price will probably require you to pass a similar savings on to future buyers.
Preferences of Buyers
Although every purchase of a home involves a degree of compromise, the process begins with the buyer's preferences. When you are working with a real estate agent, it is important that you give your agent a clear idea which of your criteria are flexible and which items you really must have in your new home.
If you prefer a specific location, for example, discuss why you want to live in that neighborhood. The agent might be able to suggest alternatives areas which offer the same amenities or convenience to your office. How important is size? Do you really need four bedrooms or would three bedrooms work, if there is a den for your home office? How much are you willing to correct with redecorating or remodeling? Are you willing to expand your price range by using an adjustable rate mortgage to increase your buying power?
The agent will ask you a lot of questions so that they can use your time most efficiently by showing you houses that meet your criterion as a buyer.
If you prefer a specific location, for example, discuss why you want to live in that neighborhood. The agent might be able to suggest alternatives areas which offer the same amenities or convenience to your office. How important is size? Do you really need four bedrooms or would three bedrooms work, if there is a den for your home office? How much are you willing to correct with redecorating or remodeling? Are you willing to expand your price range by using an adjustable rate mortgage to increase your buying power?
The agent will ask you a lot of questions so that they can use your time most efficiently by showing you houses that meet your criterion as a buyer.
Getting Organized
Looking at homes can become overwhelming for many prospective buyers. The properties start to run together, and you have trouble remembering which homes you liked a lot and which ones you didn't. Real estate agents use a few tricks that can help you remember what you have seen.
Usually the real estate agent will give you a copy of the listing with all the pertinent information. Write down one distinctive feature on the listing sheet that will help you remember the house. Maybe the house had unusual moldings in the dining room, a red door, or unusual wallpaper. If the house was particularly interesting to you, put a big star on the top of the page to remind yourself that you would like to see it again or even perhaps make an offer. If there are features for which you have a strong preference, or if you eliminate a house from consideration for any reason, be sure to tell the agent why.
Communication between you and the real estate agent is a key element. This will save you a lot of time and effort in your search because the agent will show you only the homes that meet your particular needs.
Usually the real estate agent will give you a copy of the listing with all the pertinent information. Write down one distinctive feature on the listing sheet that will help you remember the house. Maybe the house had unusual moldings in the dining room, a red door, or unusual wallpaper. If the house was particularly interesting to you, put a big star on the top of the page to remind yourself that you would like to see it again or even perhaps make an offer. If there are features for which you have a strong preference, or if you eliminate a house from consideration for any reason, be sure to tell the agent why.
Communication between you and the real estate agent is a key element. This will save you a lot of time and effort in your search because the agent will show you only the homes that meet your particular needs.
Locate Your Lifestyle
If you are looking for a new home, it is important to communicate with your real estate agent about any special aspects of your lifestyle that will influence your choice. This information will help your agent to locate the perfect home for you and your family.
Are you a gourmet cook who loves giving lots of parties? Do you want space to accommodate hobbies such as painting, photography, or woodworking? Will your decision be influenced by the accessibility of a community gym, a golf course or tennis courts? Does your son need space to rehearse with his rock band? Do you need a home office? Are you planning to enlarge your family? Is there someone in your household who cannot climb stairs?
Knowing the significant factors that will influence your housing decision helps the agent to narrow the selection of homes on the market.
Are you a gourmet cook who loves giving lots of parties? Do you want space to accommodate hobbies such as painting, photography, or woodworking? Will your decision be influenced by the accessibility of a community gym, a golf course or tennis courts? Does your son need space to rehearse with his rock band? Do you need a home office? Are you planning to enlarge your family? Is there someone in your household who cannot climb stairs?
Knowing the significant factors that will influence your housing decision helps the agent to narrow the selection of homes on the market.
House Hunting Tips
If you are house-hunting, you may spend hours looking at homes only to have them all blend into one giant blur at the end of the day. Which house had that beautifully designed great room? Was it the same one with the small master bedroom? You can remember what is important about each of the many properties that you saw by using the little tricks developed by real estate agents to help them identify the thousands of properties they see.
Carry a notebook with you when you are house-hunting, and give each house its own page. At the top of the page, note the address and price. Write down the exterior construction, style and color, as well as the color of the living room carpet and walls and any other major feature that will jog your memory later. You can nickname the houses--"the cow mailbox house" or "organic garden house"--anything to help you retain a mental picture of the property. This will enable you to recap the day and give your real estate agent important feedback that can speed up your search for the perfect home!
Carry a notebook with you when you are house-hunting, and give each house its own page. At the top of the page, note the address and price. Write down the exterior construction, style and color, as well as the color of the living room carpet and walls and any other major feature that will jog your memory later. You can nickname the houses--"the cow mailbox house" or "organic garden house"--anything to help you retain a mental picture of the property. This will enable you to recap the day and give your real estate agent important feedback that can speed up your search for the perfect home!
Buyers Market
Is the real estate section of your local paper filled with stories about how the real estate market in your area is slowing down? Is it taking months to sell the homes on the market? If this description fits your area, and you have been waiting for the right time to buy a house, it may be time for you to make a move.
This kind of market is referred to as a "buyers' market" for good reason--it is an opportunity for buyers to select from a large number of homes that could satisfy their needs. Everyone involved is ready to bend over backwards to make it possible for you to buy your dream home. Most sellers are highly motivated and so are the local real estate agents, loan officers, title companies, and other professionals involved in the transaction. It is important to remember that the real estate market runs in cycles, and conditions can change without a lot of warning. This could be the perfect time to contact a good real estate agent to discuss your needs and to explore the possibilities available to you
This kind of market is referred to as a "buyers' market" for good reason--it is an opportunity for buyers to select from a large number of homes that could satisfy their needs. Everyone involved is ready to bend over backwards to make it possible for you to buy your dream home. Most sellers are highly motivated and so are the local real estate agents, loan officers, title companies, and other professionals involved in the transaction. It is important to remember that the real estate market runs in cycles, and conditions can change without a lot of warning. This could be the perfect time to contact a good real estate agent to discuss your needs and to explore the possibilities available to you
A Good Start
When a real estate agent begins to work with a new buyer, we will sit down with you, ask a number of questions, and listen carefully to your answers. Our purpose during this initial interview is to get a clear idea of what kind of property you are looking for and your approximate price range. We explain how we will function as your representative, what the local market is like, and what we can do to help you locate that perfect home.
It is important for you as a prospective buyer to be as clear as possible about your needs. After we have talked and you have decided how much you can comfortably spend, we will know how to facilitate your home search. We won't take you through a three-story colonial with a top floor master suite if you want to avoid climbing up and down stairs! Establishing clear communication with our clients helps us save you hours of unfocused house hunting.
It is important for you as a prospective buyer to be as clear as possible about your needs. After we have talked and you have decided how much you can comfortably spend, we will know how to facilitate your home search. We won't take you through a three-story colonial with a top floor master suite if you want to avoid climbing up and down stairs! Establishing clear communication with our clients helps us save you hours of unfocused house hunting.
A Great Opportunity
Home ownership may seem like "the impossible dream" to first-time buyers who have to stretch in order to purchase their first home. Many younger buyers can afford the monthly mortgage payments, but may have to get creative to cover the down payment and closing costs.
Contact a real estate professional if you are thinking about buying your first home. For those whose funds are limited, there may be possibilities you have not considered, such as local or federal loan programs that can help get you moved into your new home. There are many flexible new mortgage loans available to first-time buyers. Sellers are sometimes willing to extend a small loan to help cover closing costs in order to complete the sale.
You can also consider the many housing options available. There are beautiful condominiums and townhouses with desirable amenities and prices that are designed to appeal to first-time buyers who cannot yet afford a single-family detached home.
Contact a real estate professional if you are thinking about buying your first home. For those whose funds are limited, there may be possibilities you have not considered, such as local or federal loan programs that can help get you moved into your new home. There are many flexible new mortgage loans available to first-time buyers. Sellers are sometimes willing to extend a small loan to help cover closing costs in order to complete the sale.
You can also consider the many housing options available. There are beautiful condominiums and townhouses with desirable amenities and prices that are designed to appeal to first-time buyers who cannot yet afford a single-family detached home.
A Matter of Timing
Buying real estate can sometimes involve tricky timing. For example, you may have found the perfect house and are thinking about making an offer, but are feeling pressured to make a decision just when you want time to consider the matter. The agent tells you that another party is thinking about making an offer, so you shouldn't hesitate if you really want the house. What should you do? Trust your agent!
It is natural to feel some pressure from even the most easy-going real estate agent--and some uncertainty about making an offer. If you really like a house, there is always the possibility that someone else will share your enthusiasm for it. Whether your local market is active or sluggish, it is sensible to assume that another offer is likely to come in. Perhaps you can afford to "sleep on it", but moving as quickly as possible will minimize the possibility that the house will go to another buyer.
It is natural to feel some pressure from even the most easy-going real estate agent--and some uncertainty about making an offer. If you really like a house, there is always the possibility that someone else will share your enthusiasm for it. Whether your local market is active or sluggish, it is sensible to assume that another offer is likely to come in. Perhaps you can afford to "sleep on it", but moving as quickly as possible will minimize the possibility that the house will go to another buyer.
A Realistic Evaluation
Your real estate agent's job is to find you the perfect home, in the right location, with all the amenities you want--and at the right price. It is the home inspector's job to find any skeletons in the closet -- or in the plumbing, wiring, roof, basement and beams.
The mortgage inspector won't pass or fail a home based on what he or she finds, but will go over the house thoroughly to help you understand the condition of the property you are buying. If there are any serious problems, the inspector can give you a realistic idea of how much the repairs will cost. If there are material defects that were not reflected in the asking price, you will have the opportunity to re-open negotiations with your sellers before you commit to the purchase. A good inspector will also explain the operation of the basic emergency systems such as the main water cut off valve and the circuit breaker box, and will go over items that will need routine maintenance.
The mortgage inspector won't pass or fail a home based on what he or she finds, but will go over the house thoroughly to help you understand the condition of the property you are buying. If there are any serious problems, the inspector can give you a realistic idea of how much the repairs will cost. If there are material defects that were not reflected in the asking price, you will have the opportunity to re-open negotiations with your sellers before you commit to the purchase. A good inspector will also explain the operation of the basic emergency systems such as the main water cut off valve and the circuit breaker box, and will go over items that will need routine maintenance.
The Perfect House
Home buyers must often deal with deferred maintenance or repairs. For example, you may have found a terrific house and like many competent home buyers, you included a structural inspection contingency in your purchase agreement. What happens when you find out that your "perfect" house needs some work? Do you ask the sellers to pay for the repairs? Before you answer "yes", there are some important considerations.
Some contracts require that all of the home's systems, such as plumbing, heating, electrical and central air conditioning, be in working order. In this case, the sellers may be obligated to repair any problems with these systems. Leaky roofs, damp basements, or other structural problems may not be covered, however. If you ask the sellers to make these types of repairs, you may void the contract by doing so. The sellers might prefer to negotiate the repairs to keep from losing the sale. If there are other buyers waiting in the wings with back-up contracts, you run the risk of losing the home.
If you are buying a house, we recommend that you make a professional home inspector part of your home purchase team.
Some contracts require that all of the home's systems, such as plumbing, heating, electrical and central air conditioning, be in working order. In this case, the sellers may be obligated to repair any problems with these systems. Leaky roofs, damp basements, or other structural problems may not be covered, however. If you ask the sellers to make these types of repairs, you may void the contract by doing so. The sellers might prefer to negotiate the repairs to keep from losing the sale. If there are other buyers waiting in the wings with back-up contracts, you run the risk of losing the home.
If you are buying a house, we recommend that you make a professional home inspector part of your home purchase team.
Too Many Experts
It can be difficult to make an informed home buying decision when confronted by advice from too many "experts." If you have just found the house you want to buy, you are probably feeling completely thrilled and confused at the same time. You trust the agent who helped you and feel that the advice you received is solid. But you also want to get opinions about the house from your best friend, your parents, and your Uncle Chuck, who has an inactive real estate license.
If you get input from too many sources, you could find yourself even more confused than you already are. Your best friend can provide moral support, but might not know the market in your area. Your parents may go into shock because they feel that they got so much more house for their money 30 years ago--and it cost them a fraction of the price you are going to pay.
Even though Uncle Chuck passed the real estate exam, his insights won't be as relevant as those of a professional who is currently working the market. It's not that you shouldn't consult your family and friends--just don't go overboard. Rely on the advice of professionals you trust--a structural inspector, loan officer, and a good real estate agent, so that you can feel comfortable about having made an informed decision.
If you get input from too many sources, you could find yourself even more confused than you already are. Your best friend can provide moral support, but might not know the market in your area. Your parents may go into shock because they feel that they got so much more house for their money 30 years ago--and it cost them a fraction of the price you are going to pay.
Even though Uncle Chuck passed the real estate exam, his insights won't be as relevant as those of a professional who is currently working the market. It's not that you shouldn't consult your family and friends--just don't go overboard. Rely on the advice of professionals you trust--a structural inspector, loan officer, and a good real estate agent, so that you can feel comfortable about having made an informed decision.