- Don't rush into the transaction. Buyers
searching for homes in tight markets may feel pressured to make an
immediate offer.
Solution: Become familiar with the local market
before making a purchase offer.
- Ask questions. First-time homebuyers, by
definition, simply don't have home buying experience. If you don't
know, ask. It may be uncomfortable, but let's face it...a broker
cannot answer an unasked question.
- There's no such thing as the "ideal" house.
Many buyers run themselves, not to mention their brokers, ragged as
they repeatedly dismiss homes that meet most...but not all...of
their requirements. A buyer who turns down a house that meets most,
but not all, of their criteria may miss out on the best available
property as well as good financing, should market conditions change.
Solution: First-timers should definitely view many
different homes as possible before making an offer. However, they
should definitely not make an offer on the first
home they like...but also, and more importantly, they should not
hesitate to make an offer when they find a home they love.
- Don't "Overbuy". Many First-timers are
routinely seduced into becoming "house poor". That is, they spend so
much for a home that they must forego annual vacations, restaurant
meals and other forms of entertainment.
Solution: Get Pre-approved with a lender. This can
help determine a reasonable target price range and also identify the
mortgage programs which can work best for you.
- Don't wait for that 20% down. It's an admirable
goal, but it's often years in the future for many first-time buyers.
Instead -- especially in markets with rising values -- buy now with
as little down as possible. Consider VA, FHA and other loans with
private mortgage insurance (PMI).
- Be realistic. It's tough to ignore a home's
curb appeal, but what about practical matters? Is there enough
space? Is there off-street parking? Is the construction solid in
good shape? What about maintenance costs? How far to work? It may
seem like boring stuff...but it's important none-the-less.
- Find out about zoning. Is the property next
door zoned for a 24-hour service station? Fire station? Super
Wal-Mart? Ask the broker about zoning for the property and the
surrounding area. Find out before you buy. Otherwise you might be
stuck with the home of your dreams...right next door to the new
landfill.
- Don't ignore representation. Chances are good
that the seller has a broker. Who's representing you?
Solution: A buyer broker, an attorney, or both can
give you needed representation at the bargaining table.
- Don't Skip an inspection. A professional home
inspection is simply a "must" whether you are buying an existing
home or a new one. Speak with inspectors before you enter the
marketplace to see how they work, what they cost, and what they
recommend.
- Don't under-estimate closing costs. Closing
costs comprise much of the expense when purchasing a home. In many
cases, the closing costs can be as much (if not higher) than the
down payment amount being required.
Solution: Examine your good faith estimate provided
by your lender. Talk to people who have recently been through the
buying process. Ask about fees you don't understand. If some of the
fees seem excessive, ask the lender if they can be waived (or at
least reduced). Many lenders will work with you to secure your
business. Just be realistic. If you feel that the lender is "taking
advantage" of you, consult another lender.
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