What Every REALTOR® Wants You To Know About Buying a Home
Buying your first home is a very exciting but stressful time. If you are thinking of buying your first home or your tenth, I’ll let you in on a little secret. It’s stressful for everyone – however, the first time home buyers have more to deal with in many cases as they navigate the world of real estate.
Here are six steps that every home buyer needs to be aware of whether you’re buying your first home or your tenth.
Issue #1 The Chicken or the Egg
If you ask any REALTOR® they will tell you to select a REALTOR® first and foremost. If you ask a mortgage officer, they will tell you to select a mortgage officer first. The truth is both positions should be on your team at the very beginning as you begin your search for a home.
The mortgage officer and the REALTOR® will work very closely together and it is important that both of these professionals are on your house-hunting team from the beginning. It is important to note that the REALTOR® will be with you every step along the way from finding the right house, the mortgage officer, home inspector, title company, possibly contractors, moving companies and on and on. Quite often the mortgage officer will be selling you the mortgages that are offered through their company. If you meet with a mortgage company and they tell you that you do not qualify for a mortgage, I suggest that you talk to a REALTOR® who may be able to put you in touch with a mortgage company that will approve your mortgage.
Issue #2 The First Step is Not What You Think
Very often home buyers begin their search for their new home by looking on the Internet to see what is out there. They may drive around to different neighborhoods to get a feel of what they want. The search on the Internet will have pictures of a low-priced homes that look wonderful. The truth is that many REALTORS® – myself included – hire professional photographers to take pictures that make the average house look stunning. I recently had a photo shoot on a rainy, cloudy day that was as dreary as one could imagine, but when the photos came back the skies were clear with beautiful white clouds and perfectly blue skies! What’s not to love about a house that has beautiful skies!!
In addition, if buyers do not know what price range they will be able to get a mortgage they very often will look at houses that in reality they cannot afford. Often times you will see dazzling pictures of a home with a caption of monthly payments that look enticing. However, in the small print it says a percentage rate that only few people get and 20% down. Looking at houses that are in your price range is absolutely critical.
Issue #3 You Do NOT Have to Have 20% Down
Hogwash! Mortgage companies would love to have 20% down and it’s a way to avoid the PMI Insurance, but there are other options out there that can still get you into a house. FHA will generally only require 3.5% down and a VA loan requires zero down on your home purchase. There are many, many options for down payment assistance, especially if buying your first home. Talk to your REALTOR® about mortgage officers who can get you the mortgage that fits your needs.
Issue #4 The Cost of Closing on Your Home
Home buyers are amazed at what is included in costs on closing on your home. They understand the down payment, but there are many other closing costs that are involved. A good mortgage officer or REALTOR® will walk you through those costs and explain what they are. As a general rule of thumb, it’s a good idea to plan on closing costs between 3% – 6% of the purchase price of the home in addition to the down payment.
Issue #5 The Home Inspection
Understandably, home buyers are trying to conserve as much cash as possible and often times they think that foregoing a home inspection is a way to save a few hundred dollars. Bad idea! The home inspection is one of the things that no home buyer should ever ignore – ever – not even for new homes. It may cost a few hundred dollars, but it can save you thousands of dollars in the long run.
Issue #6 Making a Low-Ball Offer is Not Always a Good Idea
Everybody wants to save money. Chances are that the seller has placed their home on the market at the high end or above and the buyer will offer on the low end or below. The further they are apart, the more unlikely it is that the two sides can come to an agreement. As a buyers’ agent, before they make an offer I will complete a CMA (Comparative Market Analysis) on the property to determine the fair market value of the home. If the house if priced high, certainly I will suggest a lower offer, but if the house is priced properly I would suggest making an offer of the fair market value. To be honest, you will most likely wind up paying that anyway and by low-balling your offer you run the risk of another buyer scooping the buy or making the seller angry.
This list could go on and on. If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.
As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.