Thinking about buying your first home this spring? Excellent! You're already making the right move by educating yourself by reading this handy blog. Keep in mind that every
Don't Make these First Timer Mistakes
Thinking about buying your first home this spring? Excellent! You're already making the right move by educating yourself by reading this handy blog. Keep in mind that every home is different, so every transaction is different. These are some guidelines and good general rules:
1. Hire an Agent
Hi! I'm an agent, or a broker, or a REALTOR. They're all the same words for "person who knows a lot of buying houses and wants to help you". There are many good reasons why you should consult a real estate agent early in your process, but I'm going to give you the best reason (and you might not even realize it).
Yup. In a real estate transaction, the seller is the one who pays to sell their house, and that means you don't have to pay your buyer's agent anything. Besides, you've got a mortgage coming up so that's enough to worry about.
Every agent is an independent contractor, so every agent has different ways of doing their business. I let my clients go to open houses by themselves (with the warning that the agent at the open house isn't working for you, no matter how nice they are). Other agents might not like that. But we're all pretty nice people once you get to know us.
Another good reason is that us agents have direct access to what's called the 'multiple listing service" or MLS. This is just a fancy word for a website that most real estate agents upload their listings to. It's up to the second accurate, unlike other websites where listings are horribly out of date. It’s also a “home search on steroids” and can save you time by zeroing in on your perfect home and schedule the showings based on your schedule.
REALTORs also can provide comparative pricing analyses for our clients. If a home is priced too high, we’ll let you know. Not a bad deal for being free!
3. Get a Loan
Not all loans are created equal and different mortgage lenders are better for different sorts of homebuyers. If this is your first time buying a home, you’re going to want to have a lender who can walk you through some of the process. Also, just because you’ve been with your bank for 30 years, it might not be the best place to get at mortgages. Hooking clients up with great mortgage people is part of the job and we want to make sure you’re happy.
Don’t have 20% down? Not a problem! Served in the military? Awesome! Credit not flawless? Whose is? There are different types of loans available depending on your needs. Since it helps you know your budget, its also a good idea to get this taken care of before you…
2. Find a Home
It’s a tad more complicated than on HGTV where everyone just sees three homes and has to pick one in a day or so. Depending on what your needs are, it might take 5, 10, or 20 homes before you find the right one (but once you find the right neighborhood you can usually find your dream home after looking at three homes or less).
If you hire a REALTOR to help you in your search, we can pinpoint neighborhoods or homes that fit exactly what you’re looking for. And since you did your homework and got your mortgage lined up before hand, we know can know about how much it’ll cost you per month to own that home you’ve had your eye on.
3. Everything is negotiable.
Once you get an agent and find a home and get a mortgage lender to get you what’s called a “prequalification letter”, it’s time to make an offer. Essentially every term on the contract is negotiable. You can offer a lower price, or a longer time to “close” on the transaction. If you want their refrigerator or want them to take it out, you can ask for that. Even if they say “you can’t ask for that”, you can ask for that. Nothing is set in stone. If there are multiple bids (more than one person making an offer on a home), you can win even by not having the highest price.
4. Do a Home Inspection
Period. Do it. Even if you’re buying a brand-new home or had a home built. Home inspectors are on the buyer’s side and you can use it as leverage to negotiate further in what’s called the “due diligence” process. And if you’re buying a new home, a home inspection can (and most likely will) turn up issues the builder will take care of, no questions asked.
Michael Cunningham is a Real Estate Broker as well as the go-to tech and marketing wiz at Domicile Realty. A native of Tennessee, Michael arrived in Chapel Hill by way of Washington, DC where he help....