Buying a home can be stressful, especially for first-time homebuyers.
Not only is it one of the biggest investments of your life, but the process itself can also be complicated for those who don’t know the ins and outs of real estate. Local real estate experts have some tips to help you navigate your first home-buying journey.
Before you can buy a home, you must save money for a down payment. While it’s common to put 20 percent down, some lenders require much less and there are first-time homebuyer programs that allow as little as 3 percent down.
“The best loan programs and interest rates require 20 percent down, so the more you can save – and the sooner you can – the better,” said Tom Schieber, broker associate at J. Rockcliff Realtors.
According to Schieber, most first-time homebuyers don’t have that amount available, so they look at other options.
“FHA loans require only 3.5 percent down with decent credit and are probably the most popular option for first-time buyers in our market,” said Schieber.
Once you have secured a down payment, it’s important to decide how much you can afford and check your credit. Online home affordability calculators can help you determine what’s within your price range. Cleaning up your credit will help you secure a lower interest rate on your loan.
“The first thing you should do is obtain a copy of your credit report,” said Jim Graydon, broker and owner of All Phase Brokers. “Look through your credit history and find any unpaid or delinquent accounts and bring them to current.”
Graydon also recommends that first-time homebuyers take care of all liens or judgments by paying them down to a zero balance and making sure that all credit card balances are under 30 percent of their high balance limit.
After you have determined how much you can afford while taking all factors into consideration, it’s a great time to start your home search. Before you search, first-time homebuyers should be prepared to compromise.
“First-time buyers should not try to buy their forever home the first time out,” said Schieber. “Buy what you can afford. Get into the market. Focus on a location or a neighborhood you feel good about.”
According to Schieber, first-time buyers may miss out on a good home if they’re looking for a perfect house.
“You don’t have to jump at the first thing you see or buy a total fixer, but have realistic expectations,” said Schieber.
Buyers should also consider whether they want to move into a single-family home, condo or townhouse.
“Those who are single or have a small family find condos appealing for many reasons,” said Graydon. “They are in many cases neat, clean and well maintained by the HOA and may feature swimming pools, tennis courts and gyms.”
Graydon recommends that homeowners also make sure the benefits of a condo outweigh the risks by evaluating fees associated with the HOA as well as any penalties for breaking HOA policies.
When you’ve browsed houses and are ready to attend your first open house, bring a list of questions or a checklist of things for you to research. Finding out when the house was built and when the roof, furnace, air conditioner and water heater were last repaired or replaced will give you an idea of possible expenses that might arise down the road.
Open houses are also a great chance to scout the neighborhood. Check for traffic and noise, including from the neighbors next door.
The final piece of advice for first-time homebuyers is to make sure you have a good real estate agent who will walk you through every step of the process and negotiate with sellers to make a strong offer on your first home.
J. Rockcliff Realtors is located at 3860 Balfour Road, Suite B, in Brentwood. For more information, call 925-487-3172 or visit www.tomschieber.com.
All Phase Brokers is located at 1145 Second St., Suite 174, in Brentwood. For more information, call 925-584-9886 or visit www.allphasebrokers.com.