Things to Know Before Buying Your First Home

By
Real Estate Agent with Remax PV/Execs 01193674

Things to Know Before Buying Your First Home in Palos Verdes

1. The cost  of owning a home is more than simply the purchase price. There are several monthly fees and expenses in addition to your monthly mortgage payment that you need to be prepared for. This includes insurance, property taxes, utilities, and maintenance. However, the costs associated with owning your first home are bearable. 

2. Programs are out there for first-time buyers. A significant down payment is never a bad investment- it gives you instant home equity and a lower monthly payment. But, if you can't manage to get a larger down payment, you don't have to give up your dream of home ownership. There are many federal, state, and local programs dedicated to helping first-time homebuyers with down payments, interest rates and loan terms. 

3. Foreclosures and short sales can be great deals but proceed with caution. Many homebuyers have gotten great deals on these types of homes. However, buying a foreclosure or short sale can come with some red flags. Most of these homes are sold "as-is." Since maintenance isn't always a top priority for homeowners facing foreclosure, these properties may need a significant amount of work. With short sales, transactions are lengthy and more complicated than a typical home purchase.

4. Getting pre-approved for a loan gives you more buying power. Before you begin your house hunt, be sure you have a pre-approved letter which proves that a lender has offered you a specific mortgage. This is important because it establishes your maximum purchase price, shows sellers you're serious about buying, and if you get pre-approved by several lenders you can compare interest rates and terms to find the best deal.

5. School districts can affect property value. Even if you don't have kids, buying a home near good school districts can help your home's resale value. The most important aspect of a home's value is the neighborhood it's in. If you cannot afford these neighborhoods, look for fixer-uppers in the area. They may need work but they will have built-in property value.

6. Do your homework to help make a competitive offer. Before you make an offer on a home, crunch the numbers to figure out the property's market value. Have your agent do a comparative market analysis where he or she will compare the home you want to buy to recently sold homes in the area with the same square footage, construction, age, etc. The analysis will show you what buyers were willing to pay for similar homes in your neighborhood giving you a good starting point.

 

 

 

Comments (28)

Charlie Dresen
Steamboat Sotheby's International Realty - Steamboat Springs, CO
Steamboat Springs, CO e-Pro

Great post and such a good topic to bring to light as buying your first home entails so many decisions that people never even think to consider. There are many variables even between neighborhoods that can affect the cost of living ongoing. Just getting people thinking along the lines of your list helps them broaden the discussion to other areas important to them.

Apr 03, 2012 09:54 PM
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Frank and Heidi, thanks for the information, I have already forwarded it to a young buyer who is presently looking for a first home.

Apr 03, 2012 11:34 PM
Sylvie Stuart
Realty One Group Mountain Desert 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagsta

A new buyer especially has a lot of questions when looking into purchasing a home, this is a very informative list for people seeking that information! Thanks!

Apr 04, 2012 12:11 AM
Al Raymondi
Ocean View Realty Group in Ormond By The Sea Florida - Ormond Beach, FL
Ormond By The Sea Florida - Home and Condo Sales

Terrific post Frank & Heidi, you have given some great advice for home buyers.

Apr 04, 2012 12:15 AM
S W
Centerville, KS

All great points. I find alot of my first time home buyers want to get into the foreclosure/short sale scene because they can get such a fantastic deal until they actually start going inside the homes and seeing the amount of work, time, and money they will have to spend.

With a good eye, a 1st time buyer in the Louisville market can find a "like-new" home at a very affordable price.

Apr 04, 2012 01:19 AM
Rachel Tipton
KingOne Properties International - Pawleys Island, SC

Frank and Heidi,

This post would make a great brochure for first time homebuyers! Thank you for the excellent content.

Apr 04, 2012 01:24 AM
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

Great advice!

Apr 04, 2012 01:27 AM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Your area is one of the nicest out there to work in. I like your post and your thinking....

Apr 04, 2012 01:31 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

The first time homebuyer programs have classes that really spell out what homeownership responsibilites are all about. I have always said homebuying is not for everyone's situation.

Apr 04, 2012 01:40 AM
Bobi Bigelow
Jim Green Realty - Fort Myers, FL
Advertising / Marketing Administrator

Yes, property taxes and homeowner’s insurance can add a HUGE $ amount to your mortgage (a figure that can’t be ignored and will continue to rise). Your monthly utility bills such as; electricity, water & sewer, and phone/cable/internet will also go up over time. Then there is the cost of routine maintenance, the question is: do you invest in a Home Depot card or a Lowe’s card? – lol J

Apr 04, 2012 02:09 AM
Raymond Denton
Homesmart / Evergreen Realty - Mission Viejo, CA
Casta del Sol Realtor

You have first time homebuyers in Palos Verdes?

Apr 04, 2012 03:14 AM
Jack Snyder
Loan Officer in Orange County for FlexPoint Mortgage - San Clemente, CA
Loan Officer, San Clemente, Orange County, CA.

Insightful post Frank, especially regarding the local schools in regards to home values.

Is that a picture of Haggerty's I see?

 

~Jack

Apr 04, 2012 04:10 AM
Ron Aguilar
Continental Mortgage - Saint George, UT
Mortgage & Real Estate Advisor since 1995

Also, please make your first 4-6 monthly payments so that the Loan Officer does not have to pay back the commission.

Apr 04, 2012 05:32 AM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Frank and Heid, I agree.  Just had one of my listings fail appraisal and the appaiser says buyers paying the same for resales as short sales & REOs.  Not in my market!

Apr 04, 2012 05:37 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Very good summary of things to know before buying a house - Great post.

Apr 04, 2012 09:19 AM
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas

Frank and Heidi,

Excellent advise for first time buyers!  Thanks for sharing!!!

Apr 04, 2012 04:50 PM
Liane Thomas, Top Listing Agent
Professional Realty Services® - Corona, CA
Bringing you Home!

this is a great list! Thank you for sharing.

Apr 05, 2012 05:20 AM
Insurance Solutions Unlimited,LLC
Insurance Solutions Unlimited, LLC - Winter Haven, FL
Insurance Solutions Unlimited,LLC

Frank & Heidi, These are excellent recommendations for both first time buyers and all buyers

Apr 08, 2012 09:05 PM
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

Great post. This is good, solid, advice for any Buyer.

Oct 20, 2012 01:37 PM
Matt Robinson
Professional Investors Guild - Pensacola, FL
www.professionalinvestorsguild.com

Really great information for buyers....lots of traps and landmines out there, and we certainly need to be there to help guide our clients through them.

Feb 12, 2013 01:46 AM