Top 3 Tips For Home buyers
As a buyer agents, I have had the opportunity to work with both first-time home buyers and more experienced clients.. Through my experiences with these transactions, I have noticed a few important things to keep in mind when buying a home.
1. PROTECT YOUR LEVERAGE
Picture this scenario: You are driving home from work and see a For Sale sign on 123 maple St. listed with Mary Smith of ABC Realty. You call the number on the sign and the listing agent comes out to meet you for a showing 20 minutes later. The agent opens the house and you have a short conversation where you tell the agent your profession, that your lease is almost up and and want/need to buy ASAP. You love the house, and the maximum amount you are pre-approved for.
At this point, you have thrown out every bit of negotiating power that you had. The listing agent, who has a signed agreement that represents the SELLER, now knows you love the house, what your max budget is, a rough idea of what your income is, and your instant attachment to the house. It's fine if you dont't want to use a buyer's agent, but remember that the listing agent works for the seller. They represent the seller and look out for the seeler's interest, not the BUYER's. If you do decide to search on on your own, be careful that you don't disclose anything to the listing agent you would not want the seller to know.
2. TALK TO A LENDER
Before you start looking at homes on Zillow or want to set up a property showing, take a few minutes to have a conversation with a mortgage lender. A simple 10-minute phone conversation will save you a lot of time in the long run.
Think of it this way: If you are going shopping, you have to know your budget. Similar to shopping for a car, it is not productive to shop for a Porsche on a Honda Accord budget. You are setting yourself up for disappointment, and you haven't even signed a contract yet. Remember, just because you have talked to one or two mortgage companies does not mean you are locked into working with them. At this stage, it is best to talk to a lender and get an idea of your budge.
3. THINK LONG TERM
Buying a house is one of the largest investments most people will make in their personal and financial lives. Knowing where our clients are in their lives helps us understand what type of buying plan to work up. When I work with First Time Buyers, they are usually on a smaller and tighter budget. Nobody I know likes to be house poor. I advise first time buyers to stay under budget, and find a house that fits their current needs. Statistically, first time buyers will only stay in a house 5-7 years before they need more room. Going off that statistic, first time buyers should ask themselves these two questions:
- Will this house fit my current needs for the next 406 years?
- Will I be able to re-sell and make money, or at least break even?
Now, if you are a first time buyer and have money to renovate or buy a forever home, that is great. However, most first time buyers do not have that privilege. The final point is that this is your first home, not your last home. You should lay the foundation strong and keep moving up until it is time to downsize.