Do's and Don'ts for First Time Homebuyers

As a first-time homebuyer, you may be anxious when it comes time to making what could be the largest purchase in your life. So I have come up with a simple "do and don't" list to make it a little easier for you to make your dream of homeownership come true.


DO:

• Utilize free online tools to arm yourself with as much knowledge as possible. For example, the Home Listing Report available at www.coldwellbanker.com/hlr/ offers buyers a way to compare average housing costs in over 400 U.S. markets.
• Take time to access and closely review your credit score. A sound financial track record and solid credit score can help lock in a loan and lower interest rates. Checking your records with a fine-tooth comb in advance will also ensure that you catch any errors ahead of time, as well as help you better understand how lenders may perceive you.
• Explore mortgage pre-approval. Getting this early green light will help others involved with your purchase see that you are serious about home ownership – and well qualified. In competitive bidding situations for that special home, it could very well be the difference between winning and losing.
• Anticipate your future needs and buy for lifestyle. Try to anticipate how long you will live in your next home and plan for major lifestyle changes when possible. What may make a perfect starter home for a couple might not work as well when children come into the picture. Remember, people move for lifestyle reasons and your first home will likely not be your last.
• Hone in on your housing priorities. Your ideal home may have a porch, a pool and five full baths. But before you start looking, make sure to separate your "must-haves" from your "nice to haves," so you know where you can compromise to meet your budget.

DON'T:

• Fall in love with the first house or neighborhood you see. You need to keep an open mind to make sure you find the right fit for all your needs. At the end of your search, it may turn out that the home you weren't considering at first is actually a better bet all-around.
• Buy beyond what you can afford. You may "want it all" when it comes to size, amenities, location, etc., but remember that your eyes may have a larger appetite than your wallet. Make sure that the down payment, closing costs, monthly expenses and taxes are truly within your income and savings range before you sign on the dotted line.
• Treat your home the way you treat your stock portfolio. It's unrealistic and unwise to expect your housing investment to appreciate as quickly as you'd hope for your high-risk bonds. Buying for lifestyle, as opposed to trying to turn a quick profit, will help ensure that you are viewing home purchasing and ownership in the right context.
• Try to time the market. By the time most consumers sense a major real estate or financial market shift, the tables have typically already turned. Instead of waiting for an unreliable time frame and potentially missing out on a dream home, buyers should focus on their own lifestyles and buy when the time is truly right for them.
• Jump into an exotic or confusing mortgage. When it comes to down payments and mortgages, if it sounds too good to be true, it probably is. Be sure to read carefully through every aspect of the proposed agreements to fully understand your end of the bargain. Arm yourself with information and don't be afraid to ask questions.

One last important "don't" is to not underestimate the value of a trustworthy real estate agent's on-the-ground expertise. While being a savvy buyer and doing your homework will help on the road to homeownership, a local expert with years of negotiating experience is invaluable when it comes to scouting out the perfect home – and closing the deal.

Please call me at 415-832-9151 with any questions you have about the home buying process. I'm more than happy to help.