Marty Millner
10 steps to success for first time home buyers in Bucks County
As I write this post, here in Yardley, Pa, I am enduring the 4th major snow storm of the winter. If you are not from the area, we have already set the record for the most snow, since the weather people started keeping records!
Supposedly, the spring real estate market starts, just after the superbowl. Because of the tax credit, which requires that a contract to purchase a home must be in place by April 30, 2010, and the closing occur by the end of June, 2010, while the weather permits, I have definitely noticed an increased level of activity.
As a way of thinking of the spring selling season, I thought it would be helpful to review 10 steps that can help first time home buyers, make sense out of the home buying process and decision. In future posts, I will expand on each of these steps.
Establish Your Budget early
I suggest that before you even start looking at houses, you should have a clear understanding of what you can afford to pay each month. When working with first time home buyers, I want them to be aware that there are a couple of issues in this first step. First, is what the lender will quailify you for, and more importantly, is what you are comfortable paying each month. They are often not the same. It is quite possible that you can obtain a mortgage for an amount that is more than what you are comfortable paying. Set your budget realistically, before you start talking to lenders.
Get Pre-Approved for a mortgage
This is another critical step that should be taken care of early in the process. There is no sense in looking at homes, before you understand what you are comfortable paying, as well as knowing what sort of loan amount you will quailify for. There should be no cost for this service, and it can be done by phone with a lender. The lender will review all aspects of your financial situation, including income, debt, credit score, etc in order to determine what you can qualify for. I can write an entire post on this process, but I will leave that for future posts.
Research Neighborhoods and Home Prices
Thanks to the internet, this is a fairly easy thing to do. You can search home prices, school districts, etc, on a variety of websites. I also suggest actually driving through potential areas, to get a sense of how they feel to you. Do you perfer being in a town, for example, or a more suburban location?
Find a Local Realtor
Obviously I am biased, but I believe that it is extremely beneficial to buyers, to use the services of an experienced real estate professional. I recently represented a client who actually called me to set up an interview with me, before he commited to doing anything. As it turned out, he was looking to buy a house in the Yardley area, and also had a house to sell in New Jersey. I think it is a good idea to interview agents first. You should ask questions, and make sure that you are comfortable with the agent. Often times buyers will walk into an open house, not realizing that the agent sitting the open house is there as an agent of the seller, actually representing the sellers best interests. By interviewing agents before you start actually looking, you can help ensure that you will have a qualified professional looking at protecting your interests. In general, the fee is paid by the seller, from the proceeds of the sale.
Start House Hunting
Now comes the exciting and fun part! When working with buyers, I feel that buyers learn something with each house we see. It is important to understand the market, values, etc. The only way that happens, is to look at houses. Again, it is easy for buyers to search for houses on-line, and as your realtor begins to understand your tastes, he or she should also suggest homes that are worth visiting. It will not take you long to begin to get a good sense of what houses are priced realistically, and what houses are not priced realistically. A common question that I am asked, especially by first time home buyers, is how many homes they should see. Usually once we start the process, the answer becomes clear, when we find the right house. First time home buyers tend to look at more homes, than buyers who re-locate all the time. As I said, this is part of the learning process. Generally your tastes become clearer the longer you look, and the more you see.
Focus on the Permanent Features of the House
Remember, cosmetic changes are generally easy to make. This like paint and carpet can ultimately be changed. Focus on the things that you feel that you must have. For example, if a basement is important to you, don’t compromise. You can’t realistically add a basement. Pay attention to the lot, the view, style of house, square footage, etc.
Ask Plenty of Questions.
I can’t emphasize this point enough. I really love working with first time home buyers, and I encourage them to ask every question they can think of. There is no such thing as a stupid question, in my mind. Becuase, as realtors, we go through this process every day, we can overlook things that to us are obvious. I love answering questions, and feel that my experience and knowledge should be a resource for those that I work with.
Make a Smart Offer
Again, with the help of an experienced agent, you should make smart offers. You should expect to review other recent sales in the neighborhood in which you are buying, so you can feel comfortable that you are making a fair offer. A fair offer has nothing to do with what the seller paid, or even in some cases, what the seller is asking. In general, your offer will be based on several contingencies. The most important of those contingencies are the mortgage, and home inspection contingincies. That means that if you are not satisfied with the home inspection, you will have the right to cancel the contract, and any deposit money you have paid will be returned to you.
Be Prepared to Negotiate
You should have a plan in mind, in the event the seller does not accept your initial offer, which is very common. How much will you ultimately pay for the house? Be prepared to walk away if the seller is not realistic. At the end of the day, you must be comfortable with the outcome, or move on. Right now it is a buyers market, which means that conditions are favorable for buyers. There are more houses on the market, than there are buyers for those houses. In most cases, buyers are in a strong negotiating position.
Home Inspection
I mentioned this briefly, earlier. It is critical to get a good home inspection. This happens after your offer has been accepted, and the cost will range from 500 to 600, depending on exactly what components of the inspection are required. The inspector will evaluate the foundation, roof, electrical system, plumbing, HVAC, among other things. Following the inspection, you have the right to cancel the contract, or negotiate with the seller, as to who will pay for any repairs, if there are things wrong with the house. You should feel comfortable with this process, as well.
I believe that by following these steps, you will help ensure that you will understand the home buying process and will make smart decisions.
These steps were compliments of the HomeBuyingInstitute. Check out the website for great information about the home buying process.
Leave a Reply
Network With Us
Submit your information to get your market status report.
