First time Home Buyers checklist

Buying a first home is one of the most exciting times in a person’s life. But it’s also a huge decision and it can be overwhelming for potential homeowners who don’t know the steps to take to get them from “thinking about buying a first home” to “time to move in”.

Here’s a first timer’s checklist for purchasing property to help homeowners manage the buying process for the first time:

Finances

Before homeowners start thinking about purchasing a home, it’s important to take a look at finances.

Pay Down Debt

The first thing that potential homeowners will want to do before looking for homes is to pay down any outstanding debt, especially credit card debt. Credit card debt typically has a high interest rate and paying down large balances can be a drain on finances. Credit card debt also has a big impact on credit scores, which will directly affect the interest rates homeowners will secure on their home loans.

It can be a challenge, but paying down high-interest debt before purchasing a home is the best long-term strategy for potential homeowners.

Know The Numbers and Gather Documentation

It’s also important for homeowners to have a solid understanding of their financial history before they apply for loans and looking for homes.

It’s important that homeowners know their credit score, and the credit score of their spouse, partner or co-purchaser. They should also plan to review their credit reports to look for any errors or discrepancies; even minor dings on a credit report can cause higher interest rates on a mortgage.

Potential buyers will also want to gather the documentation they’ll need when applying for a mortgage. This includes copies of credit reports, paycheck stubs, copies of federal tax returns and documentation outlining any student loan or credit card debt.

Rework Budgets

There’s no way around it – owning a home is an expensive endeavor. In order to purchase a home that won’t put them under financial strain, homeowners need to take a close look at their budgets and figure out how much house they can afford.

Homeowners should track their expenses, see where they can cut expenses and then figure out a realistic and comfortable home budget. It’s also important to factor in all home-related expenses when creating a budget. Obviously, there will be a mortgage payment, but homeowners should also factor in things like property tax, any HOA fees and utilities.

Determine Mortgage

Once a budget has been decided, it’s time to determine what type of mortgage will be the best fit. Most homeowners elect for a 30-year mortgage, but there are shorter term mortgages available (like 15-year mortgages), which typically carry lower interest rates.

Homeowners should also determine whether they’ll be applying for a fixed rate or an adjustable rate mortgage. While adjustable rate mortgages can save money on the front end, they can cause higher payments down the line should interest rates increased. Fixed rate mortgages guarantee a fixed interest rate throughout the life of the loan, which offers homeowners security in knowing their mortgage payment won’t change.

Homeowners should speak with a mortgage specialist to determine the best fit for them and get pre-approved for a mortgage before beginning the home buying process.

Choose An Agent

Choosing the right agent is essential for first time home buyers. The process of purchasing a home can be overwhelming, and having the right agent can help homeowners navigate through this new territory relatively stress-free and find the home of their dreams.

When choosing an agent, homeowners should consider:

Does this agent have experience working with first time buyers?

Ideally, potential homeowners will want to work with an agent who has experience working with first time buyers. First timers typically have a lot of questions and, having never been through it before, need additional support, guidance and reassurance throughout the buying process.

A real estate agent who has worked with several first time buyers will expect these additional questions and concerns and will make room in their schedule to accommodate it.

Does this agent specialize in the desired market?

First time and seasoned buyers alike should always work with an agent who specializes in their desired market. Every area is different and working with an agent who understands the ins and outs of an area gives buyers an advantage over the competition.

Start Looking At Properties

Once an agent is in place, the fun can begin: it’s time to look at properties. Before homeowners look at properties, they should set clear expectations with their agent about what they’re looking for, share their “must haves” and their “nice to haves” and let the agent know any potential deal breakers.

Many first timers wonder how many properties they should view before making a decision. And again, there’s no magic number. Some homeowners may jump on the first property they see, and some may view 100 before finding a home that feels true to what they’re looking for.

When viewing homes, homeowners should consider whether the property is a place they could see themselves comfortably and happily living for the foreseeable future. Other considerations include:

  • How much work will need to be done on the home before it’s move in ready?
  • What will be the cost of necessary repairs and renovations?
  • How is the neighborhood? Does it feel safe?
  • If children will be living in the home, how is the school system?
  • Is the area noisy?
  • Does the property feel private? If not, is that something that’s manageable?

There’s no formula to follow for finding the right house as a first time home buyer. But following this checklist will get homeowners a few steps closer to finding their dream home.

Don’t forget to request your free copy of my Ultimate Home Buyers Guide as well

6 Reasons Your Agent Wants You Pre-Approved Before Showing You Homes

Ever had an agent deny to show you a home because you weren’t pre-approved for a mortgage? It’s not because they’re mean, or they don’t value your business… it’s actually because they’re looking out for your best interests.

Let’s face it, shopping for a home before getting pre-approved for a mortgage is like walking into a grocery store without a wallet. You may have the desire to buy, but you lack the ability. Let’s cover some basics…

What is a mortgage pre-approval?

In a nutshell, a mortgage pre-approval is written assurance from a lender or broker that you’re able to borrow money to purchase a home up to a certain amount. It’s based on the income, employment and asset documentation you supply at the time of application, in conjunction with your credit history. So let’s look at the 6 reasons you should get pre-approved.

1. It carries more weight than a “pre-qualification”.

A pre-approval differs from a pre-qualification. With the former, the lender has actually checked your credit and verified your documentation to approve a specific loan amount (usually for a particular time period such as 30, 60 or 90 days). A pre-qualification can be useful as an estimate of how much you can afford to spend on your home, but it’s a less accurate indicator of your ability to purchase. A pre-approval always carries more weight.

2. You’ll know how much house you can afford.

Getting pre-approved before you begin house hunting allows you to know how much house you can realistically afford. Knowing this narrows down the options and makes the selection process more efficient. Not to mention, it protects you from the unpleasant surprise of realizing the home you fell in love with doesn’t fit your budget.

3. It adds clout to your offer.

In many markets, homes attract more than one offer. If the sellers are weighing one offer against another, they may lean towards the one accompanied by a pre-approval letter. That’s because pre-approvals instill confidence that the buyer is financially capable of purchasing their home.

4. It could increase your negotiating power.

In addition to strengthening your offer when compared to buyers who haven’t taken this step, getting pre-approved may give you the upper-hand when negotiating the price. If the homeowner is eager to sell, they may be more willing to accept a lower offer from someone they’ve been assured is financially capable of purchasing their home.

5. It saves time.

Obtaining a mortgage is a lengthy process. Getting pre-approved ahead of time shortens the time between contract to close — this way you’re ready to proceed with finalizing the mortgage once you’ve found the home you want to purchase.

6. Without it, most agents won’t work with you.

Makes sense, too. Right? Think about it: when you hire an agent, he/she will invest countless hours showing you homes over the course of your house hunt. If you were in their shoes, wouldn’t you want assurance that your hard work would lead to a favorable outcome for both you and your client?

9 Tips for Summer Home Selling

What’s the best season in which to sell your home? That depends greatly on who you ask, and where the home is located! If you live on the coast, it’s likely that summer is your ideal time, but if you live somewhere where skiing is the main attraction, winter is probably the best time to sell. While spring and fall tend to be the most popular times to sell a home overall, it simply depends on too many factors to be able to give one single answer.

Some Realtors say that summer is the worst time to sell your home. Why? Well, people are distracted by summer vacations, the kids being off school and needing more care and attention, and all the endless summer activities that go on in communities across America. Still, if you find yourself needing to put your house on the market in the summertime, there are lots of ways to ensure that you get the most attention from buyers that could result in a sale.

Here are nine of our best, most effective summer selling secrets!

1. Get your lawn care on

When your lawn looks unkempt, so does the rest of your home. And where first impressions are important, as they are when selling your home, you’ll want your lawn to look amazing. Plan on mowing it twice a week, and keeping everything edged and trimmed nicely to make the greatest impression you can.

2. Up the curb appeal

Trim the hedges, edge and sweep the sidewalks, clean up your flower planters and plant new ones. Get rid of any yard clutter. Create a bright, summery, welcoming entrance to your home that will impress buyers right away.

3. Bright summer accents

Choose a few new, brightly colored accessories such as throw pillows, rugs, or blankets to add summery color to a dark or neutral interior palette. Add bright freshly-cut flowers in vases around the house. Switch out heavy winter drapes for summer sheers that let in more light. Brighten the “mood” of your rooms, and your potential buyers will feel it!

4. The brighter, the better

We’ve already discussed ditching the heavy drapes, but when you’re showing your home, make sure all the drapes are opened all the way. This goes for window blinds too. If you can’t pull the blinds all the way to the top because there is something unsightly outside the window, at least open them partially to let the most light in.

5. Be flexible

Remember that everyone is busier during the summer months, so try to be more flexible when it comes to showing your home. Since the days are much longer, you may have people wanting to make evening appointments for showings. Try to be as accommodating as you can. Remember, the goal is to get your house sold! A temporary inconvenience now could result in an offer!

6. Outdoor living

Pay extra attention to outdoor living areas when preparing your home for a showing. You want to showcase how your home is summer-friendly by calling attention to outdoor cooking and eating areas, and entertainment possibilities. Make sure your grill is sparkling clean on the outside, and that everything in and around your outdoor living areas looks neat and tidy.

7. Open house idea

If you have a summer open house, dress up your outdoor eating area as a picnic, complete with someone manning a grill, and grilling hot dogs and burgers for open house guests. Buy a red and white checkered tablecloth, and fill a cooler with ice and frosty beverages. Make it a happy, positive event that potential buyers will love! Remember that the longer they stick around, the more apt they are to begin seeing themselves living in the space.

8. Citrusy scents

Some people are sensitive to perfumey, flowery scents, but just about everyone equates lemon or citrus with “clean.” Grab a couple of lemon or grapefruit-scented candles, or use a natural air freshener spritz a few minutes before your showing appointment. Remember, subtle is better than overpowering when it comes to any scent.

9. Turn on the air

If you have air conditioning, turn it on, even if you have your windows open. It’ll help circulate the air, and will help keep your potential buyers in your house longer, and will be a nice break from the heat of the summer. It’ll also serve to show them that this major home system is in working order.

Hopefully, these tips will help you as you enter the summer season and try to get your home sold. Be ready, willing and able to do all you can to accommodate your summer buyers. Show them how awesome your home is to live in in the summer, and what fun they can have living there. Let’s get your home sold!

June is National Homeownership Month

homebuyers-month-cover

Are you aware that June is National Homeownership month?

Probably not. Because you’re too busy working to afford the home you live in, whether you rent it or own it.
Why should you care?

If you poke around and read anything you can find about it, you’re being urged to recognize and celebrate the benefits of homeownership.

That seems kind of a weird thing to ask you to do. Do you really have the time or care? What’re you supposed to do, throw a party? Sit alone and contemplate it? Invite some friends out for coffee and chat about it?

You’ve got to figure that the people who actively promote it probably have their reasons and motives for pushing it. (You know, like real estate agents, mortgage lenders, and the government.)

It makes you wonder…

Why do they push it, other than to make money?

Is it really the “American Dream”? Or is it just a packaged ploy?

Is it all it’s cracked up to be? What about all the people who were recently hurt by the housing market and getting in over their heads?

What about the economy and jobs? What about making enough money to even afford a house?

And, what about all the headaches and worries that come with homeownership?

Are you being sold on something unachievable, or not even all that desirable?
Maybe you shouldn’t own a home

OK, first off…

Homeownership is not for everyone.

There always seems to be this push to increase the percentage of homeowners. It gets wrapped in reasons why it’s good for you, your community, the country as a whole…maybe even the whole universe.

Pushing to increase the percentage of homeownership for the sake of statistics and percentages is wrong.

Lots of people shouldn’t own a home. Maybe some people shouldn’t even be allowed to own a home even if they qualify financially. That’s what leads to problems, because it’s a responsibility not everyone can handle.

Besides, if everyone owned property it wouldn’t be as special. As coveted. As much of a dream.

So, if you do question whether homeownership is “worth it”, maybe it isn’t the worst thing. Maybe you shouldn’t own a home.

It’s easy enough to let the people who really want to own property, and believe in the value of it, own all of the real estate.

Just don’t buy any…
Let them enjoy the “pride”

One of the catch phrases you’ve probably heard is, “There’s pride in homeownership.”

That’s kind of the cover-all reason given as to why more and more people should own their own homes.

You can’t entirely diminish the fact that there is pride and value in owning real estate. There is.

Nor can you entirely diminish the actual benefits of ownership, like building wealth, tax incentives, and not throwing money out the window and building someone else’s wealth.

But there’s certainly an inability for some people to buy real estate. Some people will never achieve homeownership.

And there’s certainly risk and worry involved. Not everyone can handle that.

It’s certainly understandable that lots of people shy away from buying real estate so soon after the real estate bubble burst, and the slow recovery. Some people are still recovering financially. Some people watched their parents struggle and worry, only to lose their home.

But for those who can and do own real estate, there is pride. And there’s appreciation.

Because while not everyone should own real estate…at least now everyone can.
You get to choose, not be chosen to own land

It used to be only a select few who could own land.

Now almost everyone has the right to own property…if they want to and have the ability.

This isn’t the feudal system where there are only a handful of Lords who’ve been granted a piece of land to look after by a King. (Side note: Do you think any Lords ever questioned the value of owning land?)

You can choose to be the lord of some land. You just have to want to, and be financially qualified to.

While you don’t have to be “chosen”…nobody’s giving it to you either.

So, if you can financially afford to, there should be some pride and appreciation in owning a little (or large) piece of this planet, with a “castle” to call your own.

So, when you do decide to buy some real estate, you should enjoy the pride, appreciation, and respect for the right and privilege to do so. You are essentially choosing to be your own land Lord.

There are places in this world you still can’t. So, imagine that. Imagine not having the choice.
Is it worth you recognizing and celebrating?

With all that in mind, is National Homeownership Month more meaningful to you?

Does it put homeownership in an objective light? Is it appealing to you? Does it make you want to own real estate? Does it make you want to own more real estate if you already own some?

Don’t get swept up in the hype of homeownership month, or anyone just trying to persuade you of the benefits of homeownership, no matter what month it is.

The best way to figure out if you should be a homeowner is to speak with a serious, objective real estate agent. One who takes counseling clients more seriously than pushing the pride of homeownership, just so they can make a sale.

Give me a ring if you’re looking for some good, objective counsel. I’d love to be part of that round table.