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Are you just out of college or new in your career or job? Are you making big rent payments but have little or no down payment? What if you could buy, are you confused between new construction versus
existing homes?
Buying a residence can be a fretful experience, one that you may be thinking is several years away from serious consideration. However, what if you could stop renting now, begin to build equity, have Uncle Sam help with your payments, and not have a downpayment?
Most people do little or no research before they invest time and money to buy their first home. Doesn’t it make sense to become completely informed before you buy your first home? This special report is designed to help you avoid 7 common and crucial mistakes. The right real estate professional who specializes in Exclusive Buyer Representation can help you make good sound business decisions based on your personal circumstances.
1. Choose the right agent. When looking for new or resale homes, you need an advocate for you, protecting your interests in the home search. Using an Exclusive Buyer Broker to help you is just like using a credit card to make a purchase. It does not cost you any more and it gives you added protection for that purchase. Most consumers do not realize that all merchants pay a “commission” to their bank for all credit card transactions as a cost of doing business. It is just the same using an Exclusive Buyer Broker - the fee is part of the cost the builder pays or part of the listing commission the seller pays to sell a home through a Realtor®. Trying to go it alone (buying directly from the builder or the real estate agent or company whose sign is in the yard) will not save you money. Further, you have no representation (meaning no one is protecting you), and may end up costing you much in terms of time and money! The only thing you invest with an Exclusive Buyer Broker is your time! Would you defend yourself in court without an attorney? Then why make the biggest financial transaction in your life without someone on your side protecting you,
at no additional charge!
2. No down payment - no problem. A common misconception is that you need 5, 10, or 20% downpayment funds to buy a home. The opposite is true. The homebuilders, lenders, and Realtors® nationwide understand that many people have the qualifying income to buy a home rather than wasting it on renting. They also understand that saving up for a downpayment is the number one reason that prevents people from home ownership. As a result, there are now loan programs that require little or no money down, such as 1% down, sweat equity (work for downpayment) on new homes (painting, cleaning, landscaping, etc.), FHA, VA, Community Home Buyers, special builder programs, and more. Ask your Exclusive Buyer Broker about these programs and other options that meet your needs at this important time in your life.
3. Little time on the job - just out of school. Most mortgage lenders generally require at least two years on the job. If you changed jobs less than two years ago, then it must be in the same field of work and that you are under no probationary or conditional period. However, if your job or career is related to what you received your degree in - Bingo! Lenders will count your school time as time on the “job.” Consequently, consider the two-year requirement of being on the job as waived.
4. Income Minus Lifestyle Equals Potential Mortgage Payment. Sit down with your Exclusive Buyer Broker and honestly discuss your income level and living expenses. Take into account future considerations, children, add-ons, amenities, fix-ups, raising income levels, promotions. Your first home is certainly worth a sacrifice but do not mortgage your entire future. Do not budget yourself two paychecks ahead of a foreclosure. Remember that your first home will not be your final or ultimate dream home. Be realistic and flexible on your goals.
5. Uncle Sam will help with your payments. You may vaguely understand or have heard of the tax benefits of home ownership. The mortgage interest on your house payment is fully tax deductible off your gross income in most cases. In the beginning of a mortgage, almost all of the payment is interest, so you can have a superb tax shelter by simply buying a home. Other expenses are also deductible, including real property taxes and moneys paid at closing by the buyer or seller for discount points. Always consult a tax professional.
6. Use Your Team. By aligning yourself with the right Exclusive Buyer Broker, you will have an entire Team at your disposal. Consult with your lender, home inspector, insurance agent, and real estate attorney. Each of them should work hand in hand for your benefit. Explore all the options.
7. Loyalty Breeds Loyalty. Be open, honest and up front with your Exclusive Buyer Broker. Wrong motives or assumptions will cause headaches, delays, extra expenses, or may keep you from getting your home.
According to the Consumer Federation of America, when interviewing real estate agents or buyer brokers to buy a home, “Make certain at least one is a Buyer Broker that works exclusively with buyers.”
The CFA recommends asking the following seven important questions:
1. Will you (the agent) represent my interests only or those of the seller?
2. Do you or your brokerage represent any sellers or builders?
3. Do you have full access to the Multiple Listing Service?
4. Will you show me for sale by owner properties?
5. Can you give me the names of several current and former clients?
6. What experience do you have as an agent and Buyer-Broker? What other designations or credentials do you have?
7. Does your commission amount vary? What about bonuses, inducements, or rebates (kickbacks)? Do you give them back to me the buyer? (After all, you the buyer are paying it!)
Finally, do you work with first time buyers and are you knowledgeable about the special financing programs discussed in this report?
No matter where you are moving to nationwide, please contact our office. We can be of service to you at your destination! In addition, remember that there is no cost for our relocation or referral services! Take the time now to learn more at one of our consumer workshops or at a personalized buyer workshop.
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