Tips for the First Time Home Buyer

Tips for the First-Time Home Buyer

Buying your first home is one of the most exciting things you will ever do.

If you have spent years living in apartments, there is nothing more satisfying than owning your own property. The process can be a little lengthy, and you might hit a few bumps in the road to home ownership.

If you are thinking about purchasing a new home, here are some smart tips to help you avoid some of the hiccups.

1-      Get your finances in order. Request a copy of your credit report so you can check it for accuracy. Mistakes are common and you want to make sure there is no fraudulent activity. If you come across something that you know is an error, circle it and send it to the reporting agency along with a letter of dispute. Free credit reports can be obtained once a year at www.annualcreditreport.com.

2-      Study the mortgage industry. Familiarize yourself with industry terms like "debt-to-income ratio" and "adjustable rate mortgage." Learn the difference between pre-approval and pre-qualified.

3-      Talk to a mortgage specialist. Sit down with them and crunch numbers. Define how much you plan to use as a down payment for your home purchase, how much mortgage you qualify for, and how much your monthly payments will be.

4-      Talk to a real estate agent about the home buying process. They will be able guide you throughout the process, show you listings in your price range, and negotiate on your behalf.

5-      Figure out what your wants and needs are, and make a list. One list, your wants, will be what you would like a home to have, but are willing to compromise on. The other list, your needs, will be what you are not willing to concede on, such as the number of bedrooms, etc. What kinds of amenities are you looking for? How many bedrooms? One story or two story home?

Also, it's important to learn about how real estate agents work. There are 3 different ways agents can work for a buyer in the State of New York, and the system can sometimes be hard to understand.

•         Seller's Agent. The goal of the Seller's Agent is to get the price that the seller most desires. It is the duty of the agent to protect the interest of the seller. As a buyer, you would not want to reveal any financial data, except your price range, to an agent who is representing you as a Seller's Agent.

•         Broker's Agent. A Broker's Agent acts an intermediary between the buyer and seller, and cooperates to assist the listing agent in the deal. The broker's agent does not have a direct relationship with either the buyer or seller.

•         Buyers Agent. A buyer's agent's responsibility is to negotiate the best deal for the buyer. They are contracted, almost like an employee, to work in their buyer's best interest. At the same time, because the buyer's agent is dutifully working for the best interest of the buyer, a contract is signed disallowing buyers from using any other agents.

When meeting with a potential agent, pay attention to how they treat you. Make sure they listen to you when you talk about what you want. Also, how are their follow up skills? Do they take the time to return your calls or emails? If they don't take the time to respond, move on.

Home inspections are also an important part of the equation. New York State requires all Home Inspectors to be licensed. Make sure you choose someone that is reliable, experienced and thorough. Be aware that inspections can incur additional expenses, depending on what you would like covered. Oftentimes, oil tank inspections, radon tests, and termite inspections will cost extra. Don't be afraid to ask your real estate agent for referrals.

Finally, don't be afraid to ask questions if you aren't sure about something. Be aware that any number of problems can crop up at the last minute and delay the purchase of your home, but it is worth it in the end when you have your backyard barbeques.