January is such a great month. It’s the month with the most opportunity. Resolutions having us taking a look within to see what changes we can make to our lives and planning for the next 11 months. For many January is the month where they say, “This will be the year we buy our first home.” Although buying a home can be a very exciting time, it can be a bit nerve racking as well. Can you get a loan? How much money can you put down? What will you be able to afford? How do you know you are buying the right house? All questions that first time home buyers face. So where do you start?
My suggestion is to first think about what you are comfortable paying a month for housing. For many that is the amount of rent they pay plus that amount they seem to easily accumulate at the end of each month. If you are married or plan to buy the house with someone it may be the combination of your rents. Whatever the case know what you are comfortable paying, and then find out what that translates to in home prices. Some may say that you shouldn’t be a payment buyer, but let’s be realistic! For many of us we look at things in terms of how much we make in a month and how much we spend in a month. I’m not saying you should determine what you “could” afford in a monthly payment and then go about making sure you spend every dollar of that money. Just know what payment is comfortable for you. You can contact just about any Realtor or mortgage broker and just tell them the payment you feel you could comfortably pay and they will give you a ballpark on what type of house that would buy.
While you are on the phone talking that over with a mortgage broker, get qualified! Yes, get qualified BEFORE you got about finding a house. There are many reasons to do this. The first is it gives you a realistic idea of what you could buy. There is no sense looking at $500,000 houses when you have no chance of buying a house that expensive. Conversely, I have worked with people who were surprised that they could buy more house than they expected. Again, I’m not saying you need to buy more than you are comfortable with, but just having the knowledge is good. The other reason to meet with your mortgage broker first is to give you a Pre Qual letter. Although a Pre Qual letter isn’t a sure thing, lock it in, the loan is a no brainer, it does give your potential seller a good idea that you are legit. It shows the seller you have been to, and are working with, a loan officer and should have an idea that you can obtain a loan. Once you have done this you are now ready to start looking at houses! As a Realtor I think this is the fun part!
As many as 80% of all buyers start looking for homes on the internet. Websites like Zillow.com and Realtor.com are good places to start, and in some places the local board of Realtors may have a similar site that allows you to see most any home listed in the Multiple Listing Service for the area. Even though I am a Realtor I encourage people to start on the internet. Look at some pictures. See what style you like. Narrow down some houses you think look good, and then give a guy like me a call. What I can do is get you into all of those homes, and that is crucially important because, as you will soon learn, pictures can be quite misleading! I’ve seen pictures of houses that I just couldn’t believe were in a price range only to get out to the house and have a reality check. And truthfully, I’ve taken pictures where, when showing a house, the prospective buyer comments something like, “Well, it’s okay, but it isn’t as nice as the pictures!” One reason for this is that many Realtors (myself included) use a wide angle lense which can drastically improve the look of a room because it makes it look so much larger.
Should you use a Realtor or go it alone? Well, as a Realtor, I bet you can guess what I think, but let me explain why. To you, as a buyer, my services are essentially free. You are probably thinking that although I may say that the cost of paying me is coming from the seller, and hence the buyer is still getting stuck with the cost. Good point, but you are wrong. Most Realtors will prepare a listing agreement and indicate the percentage or cost to sell the house in advance. For instance: You are selling your home for $100,000 and I will list it for 6% (3% is my listing fee and 3% goes to the agent that brings the buyer). If a buyer sees the sign or calls off the internet and does not have a Realtor I, as the listing agent, brought that buyer. I may not represent the buyer, but my advertising dollars got them to us. I am then entitled to the entire 6%. So the seller is paying 6% (in this scenerio) regardless. The listing agent isn’t going to pass off the saving (in most cases) to the buyer. Why should they? So it only makes sense to use someone who knows more about the process than you. Yes, Realtors know more than you do. It’s not a big deal, just relax.
So where do you start when buying your first home? 1) Mortgage Broker – Get qualified and informed. 2) Realtor – Have help getting the most for your money!
If I can help you buy your first home, CONTACT me! I’d love to work with you!