5 Stages of Buying Your First Home
Real Estate is local. By that we mean that what is going on in your local community or neighborhood, may not be reflective of what is happening in other parts of your town, county, or state.
Much of what we hear and read is based on national averages and trends.
That's a great benchmark, although you need your local market information to make informed decisions about the right next step for you. The best way to get that is find a Realtor who is a full time professional and an expert in your market place.
In the KCM Blog post today, Steve Harney talks about the benefits of working with an expert in their field.
The first sign of a true professional is that they carry themselves with confidence. This confidence allows them to listen to your needs and answer your questions. If you are sitting with an agent who wants to just tell you how ‘things will be’ instead of answering your concerns, you are not sitting with an expert.
An expert is not afraid of your questions because they have answers. They are not afraid to give you advice because they have a depth of knowledge on the issue. They realize no one will ever be correct 100% of the time. Yet, they have enough confidence in their understanding of the market to explain your best options – just like any other expert in any other profession.
There are many professionals in the housing industry who work hard every day trying to figure out the puzzle this business has become. They read, do research and attend the necessary courses, classes and seminars to guarantee they are the real estate experts in your region. Find one of these experts before you either sell your house or buy a home.
Now, using that expert to help you with buying a home is critical.
In another blog post, Tara-Nicholle Nelson outlines the 5 Stages of Buying Your First Home.
Buying a home is not a discrete event; it's a process - a sequence of events that happens over time, sometimes over as long as several months or even years! While general guides to buying a home are a dime a dozen, I'm excited to share with you some insider secrets you may not have heard elsewhere - one for each stage involved in buying a home. Here's to helping you make the best decisions at every phase of your home buying process!
Stage One: Deciding Whether It's The Right Time to Buy.
Insider Secret: The market is the least important factor you should consider when deciding whether and when to buy a home.
Why: Everyone knows affordability is at an all-time high. Home prices are low, and so are interest rates. But trying to time the market is a fool's errand; many who get caught up in that game of trying to make sure they buy at the absolute bottom will end up losing out on very, very favorable conditions.
Stage Two: Getting Pre-Approved.
Insider Secret: Working with a mortgage broker referred by your real estate broker or agent may save you money.
Why: Bolstered by the real-life stories of a couple of bad apples, TV pundits and some consumer advocates have spun the tale of a real estate industry cartel, whereby sinister agents hook unsuspecting buyers up with shady mortgage brokers, who place them in crappy loans and kick back some bucks to the agent. I'm here to tell you, in my experience, the opposite is true the vast majority of the time.
Stage Three: House Hunting
Insider Secret: "Distressed" doesn't always equal "discounted" - in some cases, a "regular" sale can be a deeper deal.
Why: Short sales and foreclosures have grown to comprise roughly 30 percent of the homes sold on today's market, even higher in some areas. The average sale price of foreclosed homes was 32% lower than the average sale price of non-foreclosed homes, at last count. However, it's not always the case that foreclosed homes or short sales - homes which are being sold for less than what the seller owes on their mortgage(s) - offer the buyer a fabulous discount.
Stage Four: Negotiations
Insider Secret: Your family and friends can cause you to lose your dream home.
Why: With so much information on the web and the news every day about the recession and the buyer's market, everyone seems to be an armchair economist/real estate savant. But much of that news is national and based on medians, averages and trends. That is, it might not necessarily apply to every home on the market in every city, and more importantly, it might have nothing to do with "your" particular home.
And, also remember that "good" news does not attract attention. So, much of what we hear nationally and locally from news sources is not necessarily reflective of the reality of the market. There is PLENTY of good news in the market and a lot of wonderful opportunities for buyers and investors alike. Your real estate professional is a local market expert...if you are working with someone you trust (and you should be!), then trust them to use their experience and expertise in the market place to represent you fully.
Stage Five: Escrow, Inspections and Underwriting
Insider Secret: It's critical that you attend your home inspections.
Why: When it comes to inspections, many first-time buyers expect that a home will either pass or fail. Except in a few jurisdictions where the government imposes certain condition requirements for a home to be sold, the home inspector's job is to check the home for structural or safety issues and educating you, the buyer about proper maintenance to protect your investment of the home as you move forward as the homeowner.
Like good Realtors, the home inspector needs to know where his/her area of expertise ends and when you need to be referred to a specialist to answer that specific question. They should never tell you how much a repair/replacement should cost nor whether this is a home you should or should not buy.