First Time Home Buyer Tips

First Time Home Buyer Tips

Recently, I have been working with many first time home buyers.  One of the first questions I ask of them is whether or not they have been pre-approved.  Surprisingly, nine times out of ten the answer is an astounding no. 

This is a common mistake made by many first time home buyers in the market.  The pre-approval should be the very first step taken by the home buyer and the reason is outlined as follows:

• Budget Should be Established- How disappointing it is when a buyer falls in love with a property that is outside their allowable budget.
• Credit Status Updated- If there are issues with credit that need to be addressed, it is better to know up front so that you can work to resolve those issues quickly.
• Relationship & Expectations of Mortgage Broker Well-Established- It is important that you are working with a  well qualified and experienced broker who has access to various loan resources to find you the best loan possible. 
• Time- It is important that you have time on your hands so that your mortgage broker can search the best rates and scenarios for your loan.
• Leverage- Most sellers will not entertain offers that are not backed by a solid pre-approval letter.  When you present a seller with a bonifide offer backed by a valid source of funding, you will establish better credibility with the seller and increase your negotiating power.

Okay, so what happens after that?

At this point it is now time to meet with your Realtor so that you can communicate to him/her your specific needs and goals for your property.  The purchase of real estate is usually one of the largest investments a consumer will ever make so it is vital that all parties are on the same page or congruent.

The search criteria should be thoroughly outlined which may include style of home, location, home owners associations, square footage, number of bedrooms, features of home and taxes to name a few.  Once this is established it is common for the Realtor to send lists of like properties sent to their home or email.  This being said, I have found a much more effective resolution which includes pulling like for like listings that match buyers search criteria and covering each property individually with the buyer.  This creates a clear understanding of the type of properties that the buyer would most consider.  An open dialogue and ongoing communication is key to narrowing down the wealth of options available especially in this market which currently has over 8.5 months of inventory.  By this time, we should have a handful of qualified properties to view and investigate.  If time permits, the buyer should then proceed to drive by each property to determine exterior curb-appeal and neighborhood condition.  Any property that is deemed undesirable to the buyer can now be eliminated.  Finally, the Realtor will take the remaining properties and set appointments to view these with the buyer. 

In the next article I will cover the offer process and negotiations.