Working with First Time Home Buyers can be a very interesting process. Since they do not have previous experience in the purchase of a home, I have found they can respond in one of two ways.
1. I do not know what to do so I will rely on you the agent to guide us through the process.
2. I have done a lot of research on the Internet so I won't need much from you the agent.
Both of these approaches can have their down side. As an agent, I must be careful not to make all the decisions for the buyer. And for #2 I wish they had more of the attitude of #1 and would listen to some guidance.
My most recent experience with First Time Home Buyers focused on who they were using as a Lender.
They had already gone to their Credit Union and had ARM 3ith 3/3 and a rate of 2.5%.
The problem was they had no more information about the mortgage. They did not know how much down would be required. They did not know what type of mortgage they were getting and they had never heard of an FHA loan. They did not know what their monthly payment was going to be.
On top of that, the Buyer was not able to communicate with the Credit Union after 5 PM or on the weekend.
In our market and in their price point properties were on the market for as little as 24 hours before they went under contract.
So we began looking at some properties they had chosen. 3 were canceled before we could look at them because they went under contract.
Then we had a day where we saw 4 properties. They really liked one and wanted to make an offer. It was at the limit of their pre qualification. But the property was also in an HOA that was over $400 per month.
I told them that they would need to contact the Credit Union to find out if the HOA fees would put them out of their limit. They said not it would be fine. They gave me figures for what the monthly would total to and said they could make the payment. Mind you they did not have a payment amount from the Credit Union. I asked how they got to that figure and they said they used a calculator on Zillow to determine the payment.
Of course they could not contact the Lender as it was a Saturday.
On Monday morning they called to say they had talked with the Lender and were ready to make an offer.
I called the Listing Agent for some information and he informed me that a contract was being signed as we spoke.
I had gone over the process several times from the beginning with the buyers. I had suggested some great Lenders they should contact to see what they had to offer, but they had not done so. The Lenders I suggested would have given them detailed information about what they could and could not do as well would have been available for after hour questions and assistance.
First Time Home Buyers Need the Right Lender who can make the home buying process clear and are available to help when the time comes to make an offer.
Yes the mortgage rate is important, but is should not be the only factor in selecting a good Lender.
It will be interesting to see if the Learning Readiness kicks in for them and they decide to find a Lender that is best for them.