Most Americans view purchasing their first home a rite of passage! Visions of white picket fences, modern houses in the hills, or classic suburban bungalows can all come to mind depending on your dream. But when the rubber meets the road, it can be difficult to develop a timeline as to when you want to purchase and what you can afford. Maybe it’s 6 months out, maybe it’s several years, but taking those first steps toward planning your first home purchase is the point at which you really start to make your dream home come true. Maybe you want more space, a garage for your beloved car, or a plot for growing vegetables. Dream homes come in all shapes and sizes, but they do all require a similar process to get from point A to point B. For first time buyers, that process can feel overwhelming, but the good news is that there are ways to break it down into manageable pieces, and a good real estate agent can help guide you through each step!
#1 Consider neighborhood preferences.
Share with your agent what neighborhoods appeal to you or ask them to conduct a property search based on your wish list. If you’re new to the area or don’t know which neighborhood would be best for you, an agent can give you some options based on your priorities. Do you want a neighborhood close to your work? A quiet area to retire and garden? Or a more active neighborhood with a strong sense of community and good schools? The type of house you’re looking for could come into play here too. Are you looking for an accessible one-story home or would you prefer two stories? Would you prefer a ranch-style house, bungalow, cottage, or Victorian? Or maybe a downtown, urban loft is more your style. Whatever your preferences are, your local real estate agent will be your best resource. They can help you understand the culture of different neighborhoods around town and help you to find the best home for you in each one! .Make a checklist of your must have requirements!
#2 Get your finances in order.
When seeking a home loan, be sure to talk with your agent about how much money you have for a down payment. Do you have a projection of how much you can spend comfortably each month on your mortgage payments? Make sure to consider extras such as property taxes, and any monthly homeowners association dues. Once your agent introduces you to a preferred mortgage specialist, be sure to get your credit score checked. Credit scores may affect your mortgage rate. You can access your report at Free Credit Report. Be prepared to share that credit report along with documents such as W2’s, last year’s tax returns, other assets, your photo ID, and bank statements.
#3 Be prepared for legal paperwork. Lots of it.
In order to create a working relationship between you and the real estate agent, you’ll start by signing a Buyer’s Broker Agreement. The agreement spells out important information so that every aspect of the relationship, including the definition of representation, agreed upon commission, and obligations of both parties, is clear and mutually agreed upon. Once the document is signed the agent will start going to work to help you get that dream home as soon as possible! You can set up a loan either before making an offer or once you have found a home you like. The mortgage broker will provide you with your home loan and closing cost documents. They are also responsible for making sure the title adheres to the lender’s requirements before final sign off.
#4 Know exactly how much you’re willing to spend.
A seasoned real estate agent will determine the best negotiation tactics to use when making a deal with the seller’s agent, and will negotiate on your behalf. The most important information you can give the agent is the maximum amount you’re willing to spend. From there, your agent will guide the process. Nobody enjoys having to go back and forth with offer contracts negotiating the price or bartering for additional repairs before signing off on a deal, but an agent provides invaluable strategies based on first hand experience. For example, they may already know the seller’s agent and possibly worked with them in the past. Knowing how the seller’s agent behaves can help with the entire process especially when problems or concerns arise. According to the Huffington Post, another tactic that works well is called Mirroring during Bargaining which allows for both parties needs to be validated. The Huffington Post states if you are going back and forth on the price, look at mirroring what the other side is doing, as it is an effective way to get more out of the bargaining chips. It can also reduce the amount of times both parties go back and forth on the listing price.
#5 If you remember nothing else, remember this:
The more detail you can give your real estate agent the better!
Just like you’re going to a doctor or seeking counsel from an attorney, the more information you give your real estate agent, the better your agent will be able to accurately represent and serve your needs. Knowledge is power and creates better outcomes. Any bit of information from your home style preferences to how you envision the neighborhood will get you closer to that dream home! No detail is too small. Even if you think it’s not important, tell them anyway! Don’t forget that your agent is on your side and legally bound to protect your buyer’s rights. Unlike other professionals, they do not get paid until escrow has closed. They want to ensure the entire home buying experience is not only enjoyable but also fulfilling!
Contact Realty Summit today to set up a free analysis of what neighborhoods and homes are right for you!