All day long, everything thing we do, day in and day out, requires a process—a correct sequence of events that leads to a successful result.
If you put the butter on your bread before you stick it into the toaster, you’re going to make a mess (and possibly start a fire!) If you try to put the car in “Drive” before you turn the key, you’re not going to go anywhere.
Each day, we follow a series of proscribed steps for mundane tasks, knowing that following the correct sequence will bring the desired result. Why, then, do so many First Time Home buyers embark on the biggest purchase of a lifetime without first “reading the directions” or laying out a plan for success?
Many prospective home buyers start on the internet, or trolling the streets of the neighborhoods they like. When they see homes that appeal to them, they call the names on the listings and start requesting showings. To the uninitiated, the way to buy a home is find one you like, and then figure out if you can afford it. Unfortunately, this method is going to lead to a lot of wasted time and disappointment.
First, how does a first-time home buyer know if the house they like is the one that best suits their budget? Even savvy buyers who are good at math and can figure out what their mortgage payment may be on a certain home, based on a random interest rate (or use the handy payment calculators on real estate websites). However, most don’t think about all the variables that affect monthly mortgage payments—Private Mortgage Insurance, fluctuating interest rates, down payment requirements, flood insurance, credit score etc.. How does the average person know how much house they can buy for a monthly payment that makes them comfortable? They find out by taking…
Step 1: Discuss your plans to purchase a home with a trusted lender. A good Mortgage Lender will be happy to sit down with a Buyer, talk about their current financial situation and help them decide if this is the right time to buy and how much to spend. The lender will issue a “preapproval” or “pre-qualification” letter, which a buyer must have “in hand” in order to make an offer to purchase a home.
Second, when a Buyer calls the name on the listing, they are talking to that homeowner’s agent–not their own. While that agent must be honest and deal in good faith, that agent’s goal is to make sure that seller gets the highest possible price for that listing. A smart Buyer knows that to avoid this, they need to take…
Step 2: Employ a Buyer Agent. The Buyer Agent will sit down with a new client and determine wants and needs, explain the home purchasing process, and present the buyer with listings that will suit the desired price range. The Buyer Agent shows the homes and gathers information about them.
Not only does a Buyer need information about the house they wish to buy, but they may also want to know about the neighborhood, the schools and entertainment opportunities in the area. The Buyer Agent has access to all that information and more. The Buyer Agent will also gather information on utility costs, and the costs for any improvements the Buyer may wish to make on the property. When the Buyer settles upon the property they want to buy, the Buyer Agent will compare that property to other recently-sold properties in the area to help the Buyer negotiate a fair price and fair terms for the sale. Once the contract has been negotiated, it’s time for…
Step 3: The Settlement Process. The Agent will assist the buyer with scheduling inspections, gathering information and completing tasks necessary for financing and, ultimately, settlement. Problems may arise along the way, but a good Buyer Agent will work as a team with the Buyer, the Lender and the Buyer’s attorney to bring about a successful sale.
First Time Home Buyers who follow the steps to Home Ownership and find the right Buyer Agent will find the home buying process as easy as 1, 2, 3!
If you’re considering your first home purchase I’d be delighted to help you get the process started! First Time Home Buyers are my specialty!