Consultation with experts
I know a lot about being a cop. I know a lot about real estate. I know a lot about those courses I taught to other cops and other police/deputies/U.K. Police, Military LE, RCMP and other LEO's from the world.
However, when I'm about to spend money, as much money that homes cost, I seek out experts in those fields. If I want to start to save for retirement because I'm self-employed, I'm going to seek out a retirement expert and someone in the financial planning field. You can also be sure I'm going to find that person who is successful and not the one who is living in his parent's basement. No offense to those living in their parent's basement.
The same rule should apply to you and your real estate venture. You are considering buying a home as a first-time buyer. You need a Realtor who will sit down with you and plan it out. They will bring up questions that you have never considered. That is why they are the expert. They cover all of those things a "rich dad poor dad" would as that relates to Real Estate.
BTW - Said expert real estate agent, should not be living in his parent's basement.
The selection of such an expert is critical to your home buying success. You are going to be able to identify that expert by searching as you normally do being you are most likely in the newer generation.
I have kids; I know this. You don't search as the older ones in the world. You don't get tricked by the ads that are at the top of the search results on Google and Bing. You know to look deeper to find the organic results.
You also know to steer clear of the real estate syndication websites because you know they are used to generate leads for agents who are unable to get clients organically. By the agents who are paying for those leads from websites like those.
You are looking for the local real estate agent blog and website, where you are finding more than just homes for sale. Everyone has homes for sale on their websites. You are looking deeper. You are wanting to find that real estate agent's website where there is a conversation happening between that agent and the first time home buyer. Where advice is being given and where questions are being answered.
Questions such as these that I constantly write about, do videos about, conduct radio shows about and more:
What kind of credit score do you need to buy a house? Usually above a 620 FICO score is required.
How do I prepare to buy my first home? Continue reading this article!
How long does it take to buy a house from start to finish? If you find the home you want to buy and are able to get your offer accepted, usually only 30-60 days until you can have it close with you as the new owner.
How much do you have to put down to buy a house? If you are Veteran and can use a VA loan, nothing down if you and the home qualify. If you are using an FHA loan 3.5% down payment is required. Then if you are a conventional loan home buyer, 5, 10, 15, 20% or more can be used as a down payment.
What are the steps to buying your first home? Consider if you are ready to be a home owner. Speak with me and have a free consult. I'll direct you to the questions to ask a home lender to get your very best deal to become pre approved for a home loan. We will then start to search in your comfortable price range, which may differ than the amount you were pre approved for. Most times pre approval amounts are too high to be comfortable for a first time home buyer. So hence you searching in a lower price range. I've been there I know :) After we find your comfort zome - then I do my magic. I search and find those homes within your price range and which comform with what you are looking for. I show you those homes. I give you my expert opinions of all the homes we see. When you see something worth pursuing, I will them pull comps to see how it's priced and we will together get an offering strategy in place. We may offer lower, the asking price or more. If we need to have the seller contribute to your closing costs (another subject covered below), then I will write the offer as such. If our offer is accepted, then we will start the investigative process with the home inspection, the apprasial and you doorknocking all of the neighbors that you are going to be living next to. We will view the home inspection report and we will work on a strategy to have the seller address those health and safety items. If we discover something that makes it so you don't want to buy the home any longer, then I will write up a cancellation and we will have escrow cancelled and move on. You will get your deposit back(topic below), and we will go find another home that better meets your requirements. If we proceed with all known things, then excrow will continue, you will be signing documents at escrow. YOU WILL NOT SIGN ANYTHING YOU GET IN THE MAIL AND SEND IT BACK WITHOUT CONSULTING WITH ME FIRST! You will then be signing loan documents and you will also be depositing any remaining funds for down payment in escrow which were agreed upon to close the transaction. If all continues on this path, you will fund one day, the lender sends the money via title and you then have the home recorded into your name on the following day. California is a two day process. Money moves the first day and the day after your name is recorded as the new home owner. You then get the keys after the agent gets confirmation of recording from the Title Company. That could happen between 11am and 5pm. If there are no "extra" days having been agreed upon when you made your offer for the seller to have additional days after you become the owner to move out, then you are golden. Utilities would have "scheduled" in accordance with your becoming the owner of the home, to be switched to your name so there is no interruption in service or "re connection" fees, they should be avoided is possible.
Do you need a downpayment as a first time home buyer? Yes you will need a downpayment unless you are a veteran using a VA loan. Being a first time home buyer has nothing to do with downpayments which are a requirement for most loan programs.
What do I need to do to buy my first home? You need to sit down with a real estate professional who will guide you through the entire process and in the ways that you can best prepare to buy your first home.
Who qualifies for the first time buyer programs? Those who have never owned a home. Those people that have inherited a home. Depending on the program, it will be those who have not owned a home for the past 3 years. Be careful of programs such as these. Some are being advertised and marketed as if they are "real", when in fact they are just a hook to get you to inquire for more information. Then your personal information is sold to tons of real estate agents, lenders and other vendors. Be careful. If in doubt, ask me or your real estate professional if the program you are seeing is a real thing or not.
What is a good price for a house for a first time home buyer? It would the one that you'd be comfortable paying the mortgage amount plus expenses for.
Can you buy a house with no money down? If you are fan of late night TV, you would think so. Those circumstances and localitalies are very specific and most are being advertised to sell books and information that will never come to fruition. If you are a military veteran and are able to qualify for a Veterans loan, then you can buy a home with nothing down. If you are able to have the present homeowner of the home you want to buy act like the bank, you could, if they agree, buy their home with zero down. If you pay cash for a home, you are paying it off and hence buying it with zero down.
Those are the most asked questions when we have home buyers asking us. I explain all and cover items that you may not have thought of as it pertains to preparing to buy real estate as a first time home buyer.
Price, Payment, and expenses
As stated, the price of the home is going to depend on your qualification amount. Said qualification amount may be higher than you are comfortable in financing. After you pay the insurance, the taxes and include your utilities and then factor in the mortgage payment, it may be too high and may require a too dramatic change to your lifestyle.
When having a guide, a qualified realtor, they will be able to direct you to a lender that will give you the straight answers. You should know, approximately, going in what your total monthly expenditure will be related to being a home, condo or town-home owner.
You will then be able to have your CPA factor in what you are going to be granted as part of the mortgage interest deduction that is an allowable deduction from your TAXES! - this one of the great reasons to own a home and not rent a home. By renting you are paying someone else's mortgage, making them wealthy. By paying your own, you are helping make yourself wealthy in real estate.
OMT - at some point you are going to "move up" or away. Do your best to find out everything you need to know about retaining the home and renting it out. See if that is an option. Maybe you can leverage the equity in that home to buy your next home. That is how people build wealth folks - think about it. A good realtor, as I do, will cover this without you asking when it comes to serving your second-time real estate needs.
Locality and venue
Where you want to live is important. You will want to do your research. If you are a walker, then you want to buy a home closer to those commerce centers that you love. Like the local mall, the restaurant belts and other areas that you want to walk to and around.
If you are a pet owner, you may want to do your research related to the pet-friendly parks and pet-friendly shopping centers.
Hey, you are buying a home, you might as well make it awesome.
Also, if you are going to be using public transportation, do your mapping out of the various neighborhoods and the walkability to those closets public transportation hubs.
If you are going to be commuting via freeway or surface streets - do your drive and check your times early within the escrow process, or even before.
If you are buying in a community that has controlled parking and where permits are required, make sure you go into those communities during or before escrow starts. You will want to see how "available" parking is for your guests and possibly yourself. You want to go on weekends and during weeknights. This action will also give you a good idea as to how it will be to live in those communities. Just park, sit and listen.
Talking a neighborhood walk around on an evening is also critical. You are bound to run into someone that will talk with you about how much the like or hate where they live. This is good intel to know. Also, as mentioned, door knocking your neighbors - super important. You will eventually find the chatty Kathy and she will tell you everything. Seek her/him out :)
Homestyle and elevation
One story - Two stories? What might you need in the future? What type will attain more equity and be a better investment over time?
What about the exterior, what choices are there in other models? Your agent should have access to some floorplans that may show the various elevation choices.
While those other homes may not be for sale at the time you are wanting to buy, it's nice to know because it could be something you could change yours to in time.
Other factors and considerations
Closing costs - these are fees that are over and above your down payment amount and deposit. For a home buyer, they are your lender's fees to get you a loan. They include your part of escrow and your part of title insurance. Approximately 3% total on top of everything else. They have to get paid, some sellers will allow a buyer to offer a different amount so they are included in the loan. Some sellers won't.
Deposit - in real estate the earnest money deposit, EMD is a real thing. Back in the past, it was real money, deposited at the time the offer was written. This is no longer the case in California. In fact, we used to make copies of the check, but that is not done. After escrow opens, the home buyer is to have the deposit submitted to escrow. Typical deposit amounts are $3,000 - $7,000 Depending on the purchase price. In some cases, the sellers will ask for an increased deposit or 3% up front.
This money is yours. You'll get it back if you cancel escrow, depending on where you are in the process, what you have signed, and other contractual agreements.
Home Inspection Appraisal Fees - these cost around $500 each. The home inspector you pay on site, the appraisal you typically pay through your mortgage lender. You don't get this money back if you choose to cancel escrow. Most may discount you during your next one if your cancellation was as a result of something discovered that you could not live with or which the seller was unwilling/unable to remedy.
Pest Control Fee - this used to be a seller thing. Due to some of the termite companies not being diligent when the sellers hired them to do the report, the home buyer is now in control of who is hired to do the termite inspection. This cost is about $85-$100 for the pest control inspection and you pay them at the time it is completed at the property. This usually happens at the same time the home inspection and appraisal are conducted.
When you are meeting at the home with your agent and the inspectors you hired, you might as well have other vendors come to measure. Like carpet people, painters, flooring, and others that you have considering quoting you.
When ready, contact me and I'll take great care of you. If I don't serve your area of interest - I have a vast referral network. I'm Connor with HONOR!