First Time Homebuyers - First in a Series

For me, 2010 has started out with many first-time homebuyers eager to take advantage of the lowered prices, low interest rates, and the extended tax credit.  In the interest of helping new homebuyers, I have decided to start the year with a series of blogs dealing with the most basic information new homebuyers need.  

The best thing for any homebuyer is to be educated.  Sometimes you feel like it's the luck of the draw when you start looking for your first home.  Therefore, the first and foremost thing you need is an agent to represent you.  Here's why:

1. It costs you, the buyer, NOTHING to have an agent represent you.  The seller pays the Buyer and Seller agents from the proceeds of the sale.
2. Your agent has many resources to help you find exactly what you are looking for.  While the internet is a great tool, there are still things only your agent can provide you.  Having an agent is being fully informed.
3. Your agent provides you with their negotiation skills.  S/He can help you negotiate the best deal with the seller. 
4. There's more to a good buy than the property's sale price.  What if something is broken or not up to code?  Should you hire a home inspector and, if so, when?  Who pays for termite inspections?  Do you need a Termite Inspection?  What other things can you write into an offer to purchase?  Your agent can help guide you in getting the best value for your money.
5. A Purchase Contract in real estate is a binding legal contract, so you don't want your first experience buying a home tainted by a poorly written contract. 
6. Never say never, but under no circumstances should you use the seller's agent.  The seller's agent represents the seller, NOT you.   It makes sense that if the seller has an agent you should too.  This way, people who understand the market and have their client's fiduciary interests in mind represent both parties. For example, if someone sued you, would you use their lawyer to represent you?  No!  Even if you are looking to buy a home being sold by the owner (with no agent), have your own agent represent you. 

I recommend that you find an agent you like and can work with and stick with him or her.  Most agents spend a lot of time searching on your behalf and driving around to show you properties.  They do all this without any reimbursement from you.  Therefore, if you suddenly bought a home through another agent, you have done your first agent a disservice.  It's like having a nice dinner in a restaurant and then tipping the waiter in the other section.  Not very respectful of your agent's hard work, is it?

Of course, sometimes you just aren't satisfied with your agent for whatever reason.  Maybe there is a personality clash or maybe s/he just doesn't seem to understand what you need in a property.  If you decide not to use the agent for some reason, let them know you're moving on so they will stop working on your behalf.  Also, let your new agent know what you've seen and that you were working with another agent before, as there are ethical rules involved in taking on clients who have worked with other agents.  Your new agent should have all the facts about your home search to date.

Interview agents like you would interview your doctor or someone doing work for you.  It is a business relationship and you have know that s/h understands your specific needs and wants, can answer your questions, and is dedicated to finding you want YOU want, not what s/he wants to sell to you.

Finally, don't be afraid to ask your agent anything about the process.  They are very experienced and can either answer the questions themselves or guide you to someone who can.  If you are ever unsure or curious about anything to do with the process, ask.  It can never hurt and will most likely save you from issues later.

In the coming weeks, I will answer some of the basic, general questions first-time homebuyers tend to have.  These will not be specific to your state.  All realtors are licensed in their own state, so I cannot answer questions that concern legal practices outside of Hawaii. 

If you are buying your first home, congratulations and good luck!  Remember; find an agent before you buy!