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IF YOU'RE A FIRST TIME BUYER & LOOKING FOR ADVICE .... READ THIS!

young couple

Many times I am asked by young or first-time buyers what my #1 piece of advice for home buying is. They are surprised to hear my response to that question, because I say something that they probably don't hear from many lenders ...

Don't Buy a Home!

What?????? Blasphemy!

Once I have their attention, I clarify my statement ...

I tell them ... Don't Buy a Home ...

Just because a tax credit is presently being offered!
Just because a tax credit runs out soon!

The timing is not good for you to do so either monetarily, emotionally, or for any other reason
If you're not prepared to be a GOOD homeowner and perform the tasks needed for upkeep
If you're not prepared to make sacrifices
If you can't budget your money and live within your means
Just because you think prices are going to go up on homes soon
You do not understand the buying and lending process
You don't care to learn the buying and lending process.
You will not devote the time to learn the home buying process
Without proper professional representation, assistance, and guidance
Your eyes and desires are bigger than your present wallet
You have to deny yourself every other life's pleasure to buy a home

Why do I say this? Because buying a home is work. It comes with responsibilities. It can cause stress. It costs money, time, effort.

I also tell them that home payments are an obligation you are promising to make. Those obligations and responsiblities should not be taken lightly. You need to enter the world of home ownership with your eyes wide open, fully educated, and prepared. To be otherwise for any other reason can mean financial disaster ...

I tell them to pass on the current temptations to buy ... unless you have educated yourself thoroughly about the home buying process and the obligations and responsibilities that come with being a home ow boxes ner.

If ... after you have thoroughly educated and prepared yourself .... you still wish to proceed ... I urge you to then move foward and buy ...

For if you are fully prepared and know what to expect of the experience ... you will enjoy the home buying journey and be glad that you made the effort.

That's my advice.

There is nothing better than owning your own home ... IF IT'S THE RIGHT TIME FOR YOU TO DO SO! Otherwise ... wait.

Gene Mundt, Sr. Vice President

Personal NMLS #216987

Chicago Bancorp NMLS # 63483

1823 Centre Point Circle, Naperville, IL 60563

Now on Skype! 630-219-1316

www.genemundt.com

gene@chicagobancorp.com

Posted by Gene Mundt Mortgage Lender Chicagoland Mortgage Lending on 02/06/2010 05:16 PM

Comments (40)

First-Time Home Buying Advice in the Home Buying Channel

firsttime buyers, home buying, advice, responsibilities, educating yourself

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This post has been included in Illinois Real Estate News Will County, IL Real Estate News
Post is included in group: 1st Time Buyers
Post is included in group: Advice for Buyers
Post is included in group: Buyer Information - What Buyers Need to Know in Today's Market
Post is included in group: First Time Homebuyer
Post is included in group: Realtors®

40 Comments on IF YOU'RE A FIRST TIME BUYER & LOOKING FOR ADVICE .... READ THIS!

FEB

2010

Excellent advice! So many people have in the past bought more than they can afford and then used the house as a ATM machine. Better to really know what your doing and stay within your comfort zone.

Many peopel did not follow this advice and it is part of the reason we are in the mess we are in these days.

Monika: You're spot on ... and it's exactly why I am trying to stress this message. No one wants to see young buyers suffer long-term financial problems. Education (IMO) regarding their "comfort zone" is the key ... Thanks so much for writing ...

Tom: Exactly right! Trying to avoid any future messes ... especially for first-timers. They just don't understand the long-term damage a bad decision can make for them. You and I? We have to help and guide ... Thanks for writing, Tom ...

Gene

FEB

2010

I have always told my kids, a sale is not a sale, if you don't have the money for it,

Terri: Sure wish more kids took your good advice to heart ... there wouldn't be so many experiencing the troubles they are now if they did. Your kids are lucky to have you .... and your wisdom around.

Gene

Gene, you're exactly right.

I wonder how many mortgage and real estate professionals have the courage to lay it out like that?

FEB

2010

Doubles for advice on getting married.

I was also thinking about Macy's ad. The more you spend the more you save. NOT!

Lisa: I appreciate the comment ... and not sure about how to answer ... but thinking if more had been more adamant about it, we wouldn't be seeing some of the financial disasters we see right now. Maybe that's simplistic??

Kate: Can't believe people fall for that ... but then again, Macy's is doing pretty well for itself! As far as the marriage advice ... I'll let you talk to my wife on that ... lol

Gene

Well, we were both 19 so I can't vouch for any in-depth investigation actually. Our daughters say we beat the odds!

FEB

2010

Good advice. And then, I see renters spending money, improving homes that don't belong to them. Arrrrgh . . .

FEB

2010

Excellent advice Gene! There are a lot of Realtors® and mortgage professionals who strongly take into consideration where the buyers are mentally, emotionally and financially when considering such a big step. Your proof that we aren't all in it simply for the check. Thanks so much!

This is a great post and sound advice. I'm an Exclusive Buyers Agent, and only work with buyers. I have a similar discussion, and often ask them to talk to me about their 'motivations' before we even go out on tour.

Very good advise for anyone buying a home... often the lenders will tell someone they qualify for up to 400,000 ... I always say that is wodnerful but how much do you want to pay a month... lets think about you r payments too not just what you qualify for... most people follow that advice and buy what they can afford to pay for.. thanks!

From the desk of David Dee,

Gene, buying a home is a big decision and some will jump on it quickly without realizing the responsibility they have to take on. Simply because of the incentives they sometimes buy without analyzing how their finances will be structured thinking that they will get a raise. Live within the means and fully knowing what lies ahead will help them in the long run. Just because one is qualified up to a certain maximum does not mean they should stretch it to the limit on the purchase. Go the middle of road purchase within the approval limit. Great advice.

Gene:

While your reasoning sounds a little pious to me, I disagree with you wholeheartedly for many reasons. I think I need my own post to discuss them.

Joetta: I know! I see one show on TV where they do all sorts of constructional improvements to rental properties and it totally puzzles me! I just don't get it ... and I'm glad to know that I'm not alone in this opinion. Why would anyone put their own money and time into something they don't own?? I understand minor improvements but ... ??? Thanks for writing, Joetta!

Andi: Thank you for your kind words. I think there are many of us that have much the same thoughts on this and conduct ourselves in the same manner. Why else would we choose a profession in which we are paid only when we actually close on a property? Think of all the time, energy, and work we do where that is not the end result! It's staggering! We MUST be getting something from our professions that is a little less tangible ... like satisfaction from helping someone?? Novel concept, but it's a bug that seems to have bitten alot of us ... Thanks again for everything!

Gene

This is true. The buying process is difficult and sometimes overwhelming for first timers. Take caution.

Carla: An intelligent conversation to have, especially before you start an actual out-of-office search. Just seems to make sense to me ... and obviously ends up educating and assisting your buyers. Thanks for writing ...

Debra: Yes, we lenders have to disclose to a buyer what they CAN qualify for ... but you're right ... it shouldn't be the end of the discussion. There is so much more to being a true lending advisor. In the end, it is the potential borrower's decision as to how to proceed ... but offering guidance and advice should also be included in your services. You make an excellent point and it sounds like you offer your clients constructive, sound advice. I'm glad you wrote ...

David: So true! I think sometimes young people especially think that buying a home is a natural progression in life ... something they just should do. Timing is everything, as you know. Working with true professionals will help them determine when that timing is right for a purchase ... and when it is not. Great point made ...

Aaron: I'm not sure what you found pious, but will be eagerly awaiting your post to read your opinions.

Gene

Gene,

Great advise. Don't buy something you can't explain to a 7 year old. Buying is easy. Owning it is hard. It comes with responsibility and stress. Don't buy for the wrong reason.

This is good advice and part of every conversation we have with buyers as Exclusive Buyer Agents.

Great advice. Homeownership is a big responsiblity.

I know of a young couple who bought their first home after condo ownership.

They had a flood in the basement in year one because the previous owner did not disclose to them he stuffed up a hole in the wall with a plastic bag and covered it with grout, instead of removing the downpipe and sealing up the lead to the basement. This of course did not show up in the home inspection.

Then they had tree root problems that caused sewage overflow in the basement to the tune of about 10k of which the insurance takes care of the clean up but not to fix the problem-tree roots. Now they have drain flies because of the goo built up in the drain. This all took place 1 week after their baby was born.

Young couples need to make sure they have back-up funds for things they would never expect to happen.

Good advise, but hard to spit out!

Love your post. Great info for Buyers, especially these days. Thanks so much for the post!

Very good advice and definately sets the tone for a better experience.

Gene - Excellent points. My son just took his first job that required him to not only move out of our house but to another state. This was a year ago and he had sufficient money in the bank for a down payment and the tax credit was so tempting. We started looking at listings, because we weren't sure we wanted his hard earned paychecks "to go to a landlord". On the other hand, when we took time to think it through many thoughts came to mind. 1st) He would be a single person having to maintain a home on his own on ONE income. 2) he had never had the financial responsibilities that come from living on one's own. 3) He is on a career path of upward mobility which could require him to move again. He decided to rent, and even in doing so, he is having to watch his expenses closely and take his time furnishing his tiny little apartment. But, he now realizes that renting is what works for him right now.

Great post! You have to get educated and be in the right place before you buy something. You have to have good reasons and think it all the way through.

Great tips for any buyer! Thanks for posting!

Gene: Thanks for the upfront and honest advice. This is how we all build trust; by giving it to our clients straight up. Have a great day and congratulations on your featured post!

Very good advice for would be buyers to consider! Their future is sure to be smoother if they think through how a house payment will fit into the rest of their budget (regardless of what amount the lender says they can afford); how long they anticipate staying in that city or area; & do they understand that ALL homes will require regular ongoing maintenance.

This is superb advice - sometimes not really what people want to hear but it's the truth and we are doing our clients a disservice if we do not make it clear like this. I will be passing along this advice in the future. Thanks for sharing!

~Cari

Great advice people sometimes take longer to decide what to wear in the morning then making a life changing decision like purchasing a home. looks like Kate #7 & #9 found out what happens when you rush into marriage,.... just did not think that would happen perhaps?

Great advice and we need to get back to people owning what they can afford.

Excellent advice. And I agree, not following these simple guidelines certainly helped to create the mess we are in nationally.

Gene, I agree with you 100%. A lot of people don't take home buying as the serious responsibility that it is and go into it too nonchalantly.

I think it's alright if they just want to be a little pregnant. Isn't that why we call them starter homes?

Congratulations on your featured post, Gene.

I think this is great advice. A buyer really needs to understand the pros and cons.

FEB

2010

Mike: The factual part of the home buying decision needs to temper the emotional side. Keeping the explanations easy to understand seems to make the correct decision much easier to see. Bypassing the emotional tug of ownership is harder to bypass ... if even for a short time. Thanks for writing ...

True North: Sounds like your clients reap the benefit of great counsel and guidance. I'm sure you see great referrals because of it ...

Diane: Depleting your entire savings (and possibly more) is never a good idea if it can be avoided. As your story illustrates, emergencies happen ... and can leave you financially vulnerable. I sure hope your young couple has recovered and are financially more sound now ...

Trisha: You're so right ... it certainly can be! But still ... the right thing to do ...

Hope: Thank you for your generous and kind words! I hope the post proves beneficial to you and your future clients. I appreciate your taking the time to write ...

Chuck: I always hope that the customers I am having this discussion with understand and appreciate the honesty and advice. Those that do, always seem to come back when the time is right ... and become wonderful referral sources ...

Gene

Carol: Your son was obviously wise to follow the path he did ... and also wise to listen to his mother. I'm sure he will gain greatly from his rental experiences ... and be a stronger owner when the timing is right for him. Thanks for relating your story ...

Wendy: Exactly right! Understanding all the pros and cons before taking the homeownership plunge is essential to the transaction's success .. and the owners future financial health.

Jeff: I'm glad you found it of value! Thanks for letting me know ...

Paul: With all the years of experience we have between us, I'm sure we know that honesty and providing the hard "upfront" facts to our customers is always the best route. Best for them ... and best for us too. It's always good to see you friend ... thanks for the kind words and stopping by!

Nancy: As a lender, we do have to tell a customer what they CAN afford on paper. We have a responsibility to counsel and advise them as well ... to all the pros and cons as they move forward. Pointing out and discussing the very factors you describe is an important part of that. All good points to make ... thanks!

Cari and Doug: You obviously view your customers as more than just numbers or "deals". It's also obvious that you care about them. They are in good hands ... and you do our industry proud.

Clark: You tell it like it is ... some don't put much thought or effort into their home buying decision making. Sometimes we have to "strip them down and dress them right" tho, don't we? Part of our jobs ... and the right thing to do. Thanks for writing ... I enjoyed the analogy ...

Gene

Sajy: You're exactly right ... it is way past time to return to common sense and self-control in our spending habits. Everyone will benefit from it ...

Jenna: It certainly contributed, no doubt. Hopefully we move forward a little wiser ...

Mark: We've all heard the saying "it's the biggest financial purchase you ever make". The saying is older than dust and possibly a little corny ... but still true. I appreciate your taking the time to write!

Gregory: It sometimes seems the "starter home" of yesteryear has gone completely by the wayside .. especially when I watch some of the TV shows about first-time buyers. You're so right tho ... starting smaller and then moving up makes sense, especially in the current financial climate. Thanks for your input and insight ...

Charles: Thank you. I appreciate your taking the time to write. Hopefully we talk again very soon!

Christine: Most definitely! Wise choices cannot be made with just half of the information needed. Thanks for stopping by ...

Gene

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Gene Mundt Mortgage Lender Chicagoland Mortgage Lending

Joliet, IL

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815.277.4036 www.genemundt.com

Address: Attention: Gene Mundt, Mortgage Lender, 1823 Centre Point Circle, Naperville, IL, 60563

Office Phone: (815) 277-4036

Cell Phone: (708) 921-6331

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