Buying a home for the first time can be an interesting and intimidating process. From the beginning when you first see the home you hope to make yours, to the end when you finally get the keys to your new home, it’s important to make the process as smooth as possible.
When first looking for a home, talk to a lender to see what you can afford. It makes no sense spending time looking at homes way below or above your price range. Your lender will help review your income and finances and find that sweet spot for the home that you can best afford.
Then, find a real estate agent who knows the market. In fact, this should be your first call. A seasoned real estate agent will know several lenders skilled in working with borrowers of all stripes. Whether your financial history and credit score are the picture of perfection, or you have had some past challenges, the right lender can find the perfect loan product and program for every borrower.
What loan program will work best for you? Some options to ask your lender about would be an FHA loan, a conventional loan, a V.A. loan for veterans, and any down-payment assistance programs. Your lender will review the right products with you.
After you find what you can get approved for, the lender will provide you with a pre-approval. This shows you and your agent how much you likely can borrow. This information will help in the home and neighborhood selection process. Do you want to live close to work, your relatives, a good school zone in the city or the suburbs, or close to the beach or the airport? Your pre-approval figure will help determine the type of areas or neighborhoods you can afford.
When choosing the real estate agent you will partner with, you should feel a perfect fit. And for good reason: a home purchase likely will be the largest financial transaction you ever will make. Ask friends or associates for referrals. Read the reviews on HomeLight, Google, or YELP. When talking with an agent, find out how involved they will be. Do they work as a solo practitioner or are they a part of the trend of realtors working as part of a real estate “team”?
Make sure you know, like and trust not only the realtor, but the systems they use to help you make a decision.
Ask about the methods of communication they use, whether they attend inspections, or if they have inspectors, lenders, or other professionals they recommend, like Donn Rubin with Fairway; Tony Gemmel with Guaranteed Rate; or Sondra Dane with Supreme Lending
Make sure you’re comfortable with their suggestions - and the role they each will play.
Next, when choosing your home and neighborhood, determine what compromises you may be willing to make. You might like a specific home but do not like the paint inside or outside. Maybe you love a home, but wish it has a pool. Are these “deal killers”? Actually, these additions can be made over time and should not hold your decision hostage.
However, if you are starting a family but love a one-bedroom, one-bath condo, how will that condo suit your needs as the child starts growing up? Will it be easy to sell once you start looking for the right single family home? Remember a typical loan is for about 30 years, so chances are, a growing family may sell a home before the loan is paid off.
These are decisions you will have to make before pulling the trigger on a home.
If looking for an investment property, ask your agent to send you listings for multi-Family units. If you are a first-time investor who has never bought a home, you could use an FHA loan. This loan requires a down payment of 3.5% of the sales price, even for a multi-family unit. The lower the rate, the lower your repayment will be.
Every loan includes some fees. Inspections, for example, can range from $200 to $400 or more, depending on what type of inspection you want. The bank will order an appraisal, priced from $300 to $400, to determine what the property is worth.
From the Realtor to the lender to the neighborhood or property you want to call home, every decision is yours. Find an agent. Talk to a lender. Those professionals can help find the right-priced place to call your own.
Chaddler “Chadd” Williams is a rising star among millennial and first-time home buyers in the Fort Lauderdale real estate market – and vital member of the team at Gary Lanham Group at Coldwell Banker Real Estate Fort Lauderdale Beach Office. Learn more at 954.695.6518.