Useful Tips For First-Time Home Buyers

Get a Credit Score

When you are in the market to buy a new or used home, one of your first acts should be to receive your credit score 1bet2u. You’ll need this if you’re planning on qualifying for mortgage loans or any other kind of money lending/credit.

Exercise The Advantages of The ‘Buyer’s Market’

Thanks to the recent housing market crash that has effected lending, borrowing, and real estate sales in general worldwide, the current market has seen an across the board reduction in housing prices to spur business. Real estate agents are accepting drastically lower prices for properties today that are probably half as much (or less) than the closing prices of yesterday.

Maintain a ‘Seller vs Buyer’ Mentality

A real estate agent or a seller is not your friend, point-blank. You would do well to use this advantage while shopping for a new home, as a seller who thinks they can get $300K for their property will quickly realize that nobody will be willing to pay more than $100K in today’s market due to depreciation in the housing market.

Stay Focused And Plan Ahead

There is no worse position to be in as a home buyer as a person who waits till the last minute (days before their old house/apartment lease is up) before looking to get a new property. When a buyer is desperate to find a new home, sellers can almost ‘smell’ the buyer’s lost advantage (as the seller can simply play hardball on a high price and wait for the buyer to run out of time and be forced to accept the higher price).

Take Risks (Wisely)

It may sound odd, but many first-timers who are buying a home will over-think every aspect of the home-buying process. There are times to be cautious, and there are times to go ahead and dive into securing a new real estate property. Often times first timers will lose out on their dream home from imagining that something is ‘too good to be true’ when it’s actually a legitimate bargain.

Buy in The Winter

A rarely used tactic for home-buying involves waiting until the ‘off-season’, so to speak, to secure the best bargains. Most home-owners buy their homes in the summer time, when demand is at the highest (mostly from transferring children into new school systems). Sellers will not often get buyer interest in the winter, and as a result there is less competition, and more willingness for the seller to accept a lower offer.

Talk to Potential Neighbors

There are quick and easy ways of finding out whether a neighborhood is ideal to move into. When shoddy neighborhood housing construction issues, illegal chemical dumps, or social problems are rampant in a community, the neighbors will be only too happy to talk about it to new potential home owners researching the area.

Be Wary of Foreclosed Homes

Many times a reduced-price foreclosure home might seem like a good deal. But upon inspection, there could be thousands of dollars worth of damage to fix (offsetting any price reductions you’d enjoy when buying). Always get an inspection before making an offer on a foreclosure home.

Picking A Real Estate Agent

A real estate agent is simply a salesperson, much like the movie/stage play ‘Glengarry Glen Ross’ portrays. Agents have no allegiance to anyone but their own bottom line, so there may come situations where they are presented with the option to gain money through the misfortunes of their client (i.e. asking sellers to lower their listing price for a quick sell to meet monthly quotas).

Don’t Assume an Agent Has Your Best Interests in Mind

Agents are working on commission from closed sales, and as such will do whatever it takes to make the biggest deal. This means buyers should never tell an agent how high a price they’re willing to pay for a home-make sure to give agents the lowest offer the seller might consider before anything else, and stick to that amount. Otherwise you can put yourself in a situation where the seller was at first willing to accept a lower offer, but the agent advises them to play hardball.

Use Agents For What They’re Good at

Realtors excel at finding properties for buyers that match specific criteria (i.e. communities near schools, houses in a certain price range, etc.) Aside from this, avoid giving the realtor too much influence over your housing situation-do not let them choose your property attorney, and in general just allow them to unlock the front door for you when touring a house (as a buyer).

Use a Successful, Full-Time Agent

The best way to measure an agent’s success as a seller is to check their current listings. Agents with many listings are an ideal choice to become a client of, as they will most likely be closing several houses a week. Part-time and less-successful realtors will have few homes listed, and will otherwise not give you as much attention or expertise as the full-time agents will.

Avoid The ‘Tricks’ of Shady Agents

Some agents will betray themselves as unprofessional when creating a house listing. Agents who use overly superlative language when describing a home should be avoided. Also the ‘insider agent tips’ like saying “Another buyer is interested in this so you should make an offer today!” should send red flags to any buyer as well. Remember that agents are first and foremost working to close the sale, and not trying to ‘help you out’ with useful info.

Be Aware of Signs Your Agent is Working Against You

An real estage agent that continually shows you homes that are several thousands of dollars higher than your specified price range is clearly trying to earn extra commissions by closing a higher sale. On the same token, an agent that says there are ‘zero’ homes in the area at the price you are looking for could be guilty of a similar ulterior motive-try searching for homes by yourself to confirm or deny the agent’s claims.

Do Not Pay an Agent Up Front

Agents should never be paid any money up front. They only get paid when they close a sale for a seller and/or a buyer. If an agent asks you for money before completing any sale, fire them and find a real agent.

Do Not Sign Up With an Agent for More Than 90 Days

As a seller, it makes sense to give agents a short leash in order to spur their efforts into finding a buyer. If you sign a 6 month contract with an agent, they can delay selling the home for a few months (forcing the seller to pay mortgage and interest in the meantime) before getting serious about selling the home. Limit their marketing efforts to 90 days to get them to give you 100% effort from day one.

Mistakes To Avoid In Home Buying

Trusting a Buyer’s Agent or Mortgage Broker

One of the most common mistakes home buyers make is in putting too much trust in professional housing market agents/brokers. These people’s first priority is making their commissions from the sale, which usually involves keeping the closing price as high as possible (something you as the buyer should try to avoid!) Do not let their great personalities fool you into accepting a bad deal.

Buying in a Rush

Too often a home buyer will make a decision based on their immediate needs for a home (in order to move out of their old place, or to secure a stable environment for their children before the start of a new school semester, etc.) This is the worst time to start looking for a home, as the sellers will often be able to exploit your desperation when negotiating a price.

Not Bothering to Research Real Estate Agents

Some agents are much better than most. Some are much worse-the agents you find that have many homes listed are the ones to go with. Unsuccessful agents with only a few homes listed are generally having problems closing sales. These agents will be less willing/capable to provide buyers with the best deals and the best properties in an area. Don’t waste your time with a poor agent.

Using a Real Estate Agent at All

Many buyers find that using a real estate agent is in and of itself a hassle that is best avoided. As mentioned, agents will only get money when selling high-sale properties, so they will often have conflicting interests with a buyer who is searching for affordable properties. Unless you have a high-spending margin, it’s perhaps best to go it alone.

Choosing The Worst Time to Buy

Buying in the summertime is when buying competition is at it’s highest. Most people are moving and shopping during the summer (the ‘off season’ as it were for most children and when many people take vacation hours). When looking for great deals, it makes much more sense to wait until the start of the winter holiday season when most people are settled in.

Overlooking HOA Dues

Homeowner’s association dues can be a costly thing to opt into when joining a housing community. If you don’t get any information about HOA dues from the seller, make sure you do your own research to ensure that the local authority is not problematic. Bad HOAs have frequent increases in monthly dues, without many benefits at all-avoid these communities, or those that are cryptic on HOA budget and monthly dues information.

Not Negotiating on The Listing Price

The listing price is not set in stone, yet many first-time buyers do not realize that they are often empowered to make an offer that is several thousands of dollars lower than the asking amount. Considering the seller is paying mortgage payments for every month they do not sell the house, there is always a lot of wiggle room especially in today’s ‘buyer’s market’ housing economy.

Trying to Afford an Expensive Home on Credit

Perhaps the worst mistake to make for any buyer, using your credit to secure the majority of your new home’s price is probably not a wise idea. Anything over 3 times the amount of your yearly salary (in other words, something that will take you over 5 years to afford under normal circumstances) is a big risk that many currently-foreclosed homes should warn buyers against attempting.