Tips for First-Time Buyers

Contingencies. Credit reports. Inspections. Disclosures. Loans. Prepayment penalties. Mortgage. Escrow. Title. Yikes! Where do you start?

It’s easy to feel overwhelmed when you’re thinking about buying your first home, but armed with some information and a great real estate agent, you’ll soon be well on your way to home ownership. Here are some tips for first-time buyers:

Your agent is your ally.

Your real estate agent will help you understand every step in the process of buying your first home and will guide you, from beginning to end. Your agent represents your interests in your home search, in negotiations, and throughout the sale and escrow process.

Take time. Ask questions.

Remember: when it comes to your house, there are no stupid questions. If you have concerns, don’t understand something, or need more information about any aspect of the real estate process, just ask! Your agent should be informed and available to answer your questions.

It IS complicated!

You may be feeling a bit nervous or intimidated by the whole process, but don’t worry, it’s not you! Today’s real estate transactions are extremely complex. Even experienced buyers need expert help.

Evaluate the economics of buying versus renting.

The money you’re putting in your landlord’s pocket every month could be building equity for your future. By calculating your income and projected costs – down payment, loan, property taxes, insurance – and comparing the result to your monthly rent, you can begin to make informed decisions about purchasing a home. (I would be happy to help you look at all the variables that go into this calculation.)

Consider your down payment options.

Putting together funds for a down payment may be the hardest part of buying a first home. You may be tempted to finance your down payment on your credit card, but that’s a very expensive option. If personal funds are not readily available, talk with family members about pitching in and, if necessary, put together a monthly savings plan to work toward that lump sum. Lenders offer many, many loan programs and some loans are available with very low down payments. If you don’t have a lender or would like another opinion about your financing and down payment options, I would be happy to refer you to qualified lending experts.

What about credit reports?

If you will be financing the purchase of your home – and most people do – your lender will run a credit report on you and any other signers on your loan. The credit report weighs all of the variables of your financial outlook – your income, your outstanding debts, your payment record, your various credit card accounts, your recent “big ticket” purchases (such as a car or boat), bankruptcies, defaults, savings, and your available credit, among other things – and comes up with a numerical rating. The higher your rating, the better you look to the lender. But even buyers with low ratings can get loans, so don’t lie about your income or try to hide credit problems. If you have concerns about your credit, let’s discuss your options and then I can refer you to a lender who specializes in financing for first-time buyers.

Don’t cut corners.

Some buyers think they will save money by skipping home inspections, but this can be one of the most expensive mistakes a buyer can make. A qualified home inspector (again, I’m happy to provide names of excellent inspectors in your area) evaluates all of the major systems in the house – the structure, construction and mechanical systems, including foundation, roof, plumbing, electrical, finishes, and heating/air conditioning – assesses the remaining useful life of each, and identifies problems that need attention, repair or replacement. Even new homes can have hidden problems. The inspector’s report can be a powerful negotiating tool – or it may help you decide to wait until a better house comes along! Other inspections may also be necessary or recommended, depending upon the age, construction and location of your home. We can discuss the costs and benefits of these inspections.

Where do you start?

Start by finding a real estate agent. In fact, all you have to do is e-mail or call me! We can talk about your needs, your priorities and your concerns and start looking for your new home – today! Please contact me at Coco@WestsideLifestyles.com or 310-278-6033.

Some areas of interest on my site for those interested in Selling in the Greater LA area: