Not too long ago, I was consulting with some new clients who were considering buying their first home. These clients told me that the challenge of buying a home for the first-time was so intimidating that it was tempting for them to just continue to rent. Their main issues were that their parents had lost a home to short sale and they were worried that the same thing could happen to them. They also didn’t understand the mortgage loan process and thought that their credit wasn’t good enough to get a loan. Lastly, these would be new homebuyers were concerned because they believed that they had to pay their realtor 2.5% to 3% of the purchase price of the home they were buying along with down payment and closing costs which they thought would be well over $25,000. This was money they didn’t have. Wow! That is a load of concerns. But, as a realtor with a listening ear, it was my job to help demystify the home buying process for this couple and to help them get the most out of their home. Here are the five tips I shared with this couple and these pointers will help to get you on your way too! First-Time Home Buyer Pointer #1 - Have a budget and stick to it. Let’s say you're interested in a home, but you’re not sure it’s in your price range. That could be a problem. Ideally, before you start browsing, looking at homes online and touring homes, it’s crucial that you iron out important questions such as; What is the most you can afford? What is your ideal price range? What is your desired monthly payment? What will your full monthly payment be; including principal, interest, taxes and insurance? So, before you put the cart before the horse you need to let your realtor pair you up with a great mortgage lender so we can help you arrive at a figure. As experienced realtors we have lenders that can close your mortgage loan in 10-21 days, home inspectors, pest inspection companies, escrow officers, contractors, electricians, roofers and more. It is our job to help you get the home of your dreams. First-Time Home Buyer Pointer #2 – Find out if there is a down payment assistance program available that you can utilize. How does a home buyer obtain a Down Payment Assistance (DPA) Program? You must qualify for these programs. Home Buyers must have qualifying income, meet a 640 FICO (credit score) and occupy the home they want to as their primary residence. Down payment assistance programs are a great option for potential home buyers that don’t have a lot of money saved up for a down payment. If you live in California, you have a golden opportunity because the Golden State Finance Authority (GSFA) created the Platinum Program. This program provides low-to-moderate income, California homebuyers. with down payment and/or closing cost assistance to help state residents achieve their goals of purchasing a home. DPA programs can offer Conventional, FHA, VA and USDA loans. Up to $24,200 of DPA funds available and the amount you receive will depend on program and option you choose. We can have one of our preferred lenders review all these options with you. If you don't live in California, don't worry there are options for DPAs all across the country. First-Time Home Buyer Pointer #3 - Make a short list of your non-negotiables. Before you start seriously shopping for homes, consider your lifestyle and values. What features would enhance your well-being? And, what things would make you miserable? From here, make a list of non-negotiables, from location, to square footage, to amenities. List all the things that you must have in your future home. This will also help guide us as your realtors. There is nothing better than knowing exactly what you want! As your realtors, we will take your list of non-negotiables, your desired price range and your areas of intertest and we will search for properties that fit your wants, needs and desires. The best way to gauge your options is to tour homes with us and get acquainted with the local market. If you are honest with us, your realtors, on what you want, we can almost guarantee we’ll find you homes that are exactly what you are looking for. First-Time Home Buyer Pointer #4 - Use a realtor that will be in your corner. Your realtor can make or break your home buying experience. According to the National Association of Realtors, 54% of buyers found their agent from a personal referral or had used an agent they’d worked with before. Know this! A good realtor has knowledge of the areas you are interested in and more importantly can listen to you and find what you are looking for in a home. In addition, a good realtor will be in your corner until the closing -- and, in our case, well beyond the close. You will like us so much that you may want to name your children after us or at the very least invite us over for family BBQs. LOL. First-Time Home Buyer Pointer #5 - The Secret Science of Bidding Your opening bid should be based on two things: what you can afford (because you don’t want to outbid yourself), and what you really believe the property is worth. As your realtors, we want to make your opening bid something that’s fair and reasonable and isn’t going to totally offend the seller. However, you want to make sure that your offer is also irresistible to the seller. A lot of people think they should go lower the first time they make a bid. However, it all depends on what the market is doing at the time. You need to look at what other homes have gone for in that neighborhood. In addition, there are things that as a buyer you can offer the seller that cost you nothing but are very valuable to the seller. A quick close, a higher earnest money deposit, a faster removal of contingencies and allowing the seller to rent back are all bargaining chips that we can use to help you win the home of your dreams. In closing, it’s okay to not know everything when you are buying your first home. Many people want to do all the research and watch all the television shows before taking the step into home ownership. But it’s perfectly alright to have the desire and the finances to buy a home, but not know everything else. We are still surprised to hear from first-time home buyers that don’t reach out to an agent when starting their search because they don’t have the extra money. The truth is, the seller has negotiated the commission they pay long before you see the house advertised and if the buyer doesn’t have an agent the listing agent keeps the full amount. This leaves you with a very happy listing agent, but also with you as a buyer, not having anybody protecting your interest. Buyer’s agents exist for a reason! Let us as your realtors guide you through the process and answer the many questions that will come up. We not only know the market well, but we will work diligently to understand your needs. Remember that our representation for you as a buyer is free! If you’d like to have real representation when you’re buying a home, give us a call at 916-269-3337 or go to www.theradiorealtors.com.