Tips for First Time Homebuyers

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Last updated on August 5th, 2018 at 02:25 pm

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Tips For First Time Home Buyers

89% of home buyers use a Realtor®

Remember: A buyer’s agent is free. A commission is negotiated long before a house is put on the market; by not using a Realtor® there is no one looking out for your best interest.

Top 5 Tips for First Time Home Buyers

  1. Communicate with your Realtor®
  2. Show what you can afford
  3. Know when to negotiate
  4. Don’t skip the inspection
  5. Be ready to act quickly

Most important factors to consider when purchasing a home:

  • Price
  • Location
  • Condition
  • Terms

The Home Buying Process For Dummies

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Last updated on August 5th, 2018 at 05:42 pm

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The Home Buying Process For Dummies

Get Your Finances In Order

Speak to a lender
Make a down payment plan & budget
Get pre-qualified AND pre-approved

Searches & Showings

Communicate home buying wish list to your Realtor®
Realtor® searches and finds properties that match your criteria
View properties with your Realtor®

Offers & Negotiations

Realtor® writes initial offer and reviews contract with you
Seller offers a counterproposal, Realtor®  negotiates on your behalf
The offer gets accepted and contract signed by buyer and seller

Pre-Closing & Closing

Realtor® helps you meet all deadlines (title commitment, inspection, appraisal, etc)
Presentation of buyer funds and final walkthrough
Closing and then moving in!

Dream Home or Nightmare? How To Buy A Fixer-Upper First Home

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Last updated on August 4th, 2018 at 09:50 am

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Are you considering a fixer-upper for your first home?  While you may be thinking it’s an inexpensive way to land a dream home, or even a quick way to pad your bank account, fixer-uppers aren’t for everyone.  Here are some things to consider before you take the leap.

How To Buy A Fixer-Upper First Home

Understand the process.

Before you can decide if a fixer-upper is right for your situation, it’s important to understand the homebuying process.  First, you need to set aside funds for a down payment.  Most lenders require a down payment of 20 percent, although some mortgage loans require less money or no money down.

Another step toward purchasing a home is to check your credit report, and you should do this early in the process.  Your lender will review your credit history as part of your loan application, and sometimes repairing bad credit can be a time-consuming proposition.  Any incorrect information can be disputed with the reporting party.  Unpaid debts and late payments can be more of an undertaking, so allow sufficient time to address issues.  You also may need to reduce the amount of your debt to improve your credit score.  Depending on your situation, this could also be time-consuming.

Once your credit is in order, you should apply for pre-qualification and then pre-approval for a mortgage.  Pre-qualification provides a snapshot of your financial picture and can often be done over the phone.  Mortgage loan pre-approval gives more firm numbers for your budget, and tells sellers you are serious.  In order to be pre-approved, you will make an appointment with your lender and provide paperwork proving your income, debts and employment history.  This is also when the lender will review your credit history.  Once you receive pre-approval, you can connect with a real estate agent and begin serious house hunting.  Note that conventional mortgages don’t cover renovations, so you need to find other ways to pay for repairs to a fixer-upper.

Consider the cost.

If you opt for a fixer-upper, you have several funding options for making repairs.  One is with existing cash, although for most homeowners the down payment and other costs associated with purchasing a home depletes accounts.  Some homeowners opt for a personal loan or another form of financing.  There is a special loan called the Limited 203(k) Mortgage, which was designed by the government to allow homeowners to renovate and repair properties.

The costs involved with fixer-uppers are one of the biggest drawbacks to purchasing.  While a fixer-upper may be an inexpensive way into a desirable neighborhood or a way to land more square footage or another characteristic you crave, the repairs can be cumbersome to your finances, time, and energy.  Even if you make repairs yourself, as US News & World Report notes, sometimes the work isn’t cost-effective.  You may end up with a property you put more money into than it’s worth, which isn’t too bad if you love it and intend to stay.  However, if you plan to “flip” a home you can get into trouble quickly.

Selecting a fixer-upper is another challenge.  You should search out fixer-upper properties in your area to be familiar with what’s available, learn neighborhoods, and explore price ranges.  For instance, the average listing price for a fixer-upper home in Colorado Springs, Colorado, is $350,000.  You should consider areas that are either growing in desirability or maintain value well if you hope to use the property as an investment or if your renovations will take time.  Remember markets can fluctuate, so if you intend to purchase a property to sell in a few years, you can end up taking a hit if renovations are extensive and costly.

Think about the repairs.

As The Washington Post reports, completing repairs is another ballgame.  Carefully evaluate your personal abilities and skill as well as your finances.  Have a home inspection completed before committing to the project so you can compare what the property requires with what you’re ready to invest.  Weigh the costs of making repairs with your budget and potential property value.  If you can do the work yourself, complete it quickly, and your fixer-upper is in a great location, you could come out a winner whether you opt to remain in the home or sell it to recoup your funds.

You can save money by living in the home while doing work if you plan to do the work yourself and you have the tools and know-how.  Tools can be rented or you may decide to buy your own.  Depending on the extent of renovations, you will need power tools such as drills, sanders, and jigsaws. If you plan to live in the home right away you may have crucial work immediately, such as a roof replacement, or septic or foundation repair.  Some work can require specialized expertise and even licensing, which also means hiring contractors and the possibility of permits.  All these factors weigh into your budget and time frame, so be careful in making your assessment.

Our upcoming book How to DIY Damn Near Everything lays out project steps, needed tools and provides photos to lead readers from step to step.

First home fixer-upper?

Deciding on a first home is challenging, and taking on a fixer-upper can make it even more so.  Depending on your situation, a fixer-upper can either be a terrific investment or a major headache and financial drain.  Consider your circumstances carefully to ensure a fixer-upper is a good match for you.

This article is a guest post written by Bret Engle of DIYGuys. You can check out their site, blog, and content at www.diyguys.net

The Smart First Time Homebuyer Guide

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Last updated on August 4th, 2018 at 09:52 am

first time homebuyer guide

Home Buyers Need Realtors Too

88% of buyers purchase a new home through a real estate agent or broker, according to statistics from realtor.com.  Approaching a new home purchase can seem like an easy process because of the technology available online to home buyers; however, this is not the case. Talking to a realtor early on, even up to five years before a purchase, can be a great way to start preparing for your future home and avoiding common mistakes. 1 out of every 4 home buyers regret their purchase, according to a recent survey by Redfin, a real estate brokerage firm.

A great realtor knows how to listen to your needs and also know what’s available in the market and how to find what you are looking for in your price range. They also can help you get the best offer for what you’re spending, what features you can DIY, and how to get out of a contract if you are uncomfortable. Make sure you choose to work with someone who has lived and worked in your target area so they are familiar with the neighborhoods, amenities, property conditions, and pricing.

What to Look for in a Home

  • Location
  • Condition
  • Terms
  • Price

Show What You Can Afford

Get Pre-Approved…Not Just Pre-Qualified

A good realtor knows the difference between getting pre-qualified and getting preapproved…as well as timing for both. If you are serious about purchasing a home, it’s important to get pre-qualified right away. Most realtors can provide you with referrals to lenders, lawyers, title companies or sub-contractors. Once you find a trusted lender, get pre-qualified right away. While you can start your home search after getting pre-qualified, it’s generally a best practice to be pre-approved prior to attending showings or making offers.

Realtors, lenders, and sellers want to know if you have the financial stability to purchase a new home before starting the required processes.

Know What You Want & Where to Negotiate

It’s important to be patient when searching for a new home, as the market availability isn’t always where you want it to be. Employing a little patience in the short term can actually get you what you want for the best deal in the long term. Knowing what features you can and cannot compromise on is key. A realtor is your best bet to knowing what the best deal is in the market, but below is a short list of critical systems not to skimp on and updates you can do yourself later:

Critical Systems Possible DIY’s
Electrical Colors or Paint
Plumbing Countertops
Heating/Cooling Storage & Shelving
Roof Carpets & Flooring
Structural Trees & Landscaping

Have you fallen in love with a home that has beautiful countertops, but has issues with the water heater? Critical systems such as electrical and plumbing should not be looked over. It may only take a hundred or so dollars to replace or install the counters you love, whereas replacing a hot water heater may cost thousands.

Feel Uncomfortable with a Contract?

Once you’ve located a home you are interested in, don’t feel locked down. The buying process can be stressful and you may feel like everyone is pressuring you to get it done quickly. A great realtor listens to your needs and doesn’t get pushy when you change your mind or don’t like an offer.