Are you a first time buyer?
If so, there are three important rules you may want to follow prior to getting too far into the search for a home.
Before you even go look at your first home, you really do need to know several things.
The first major step, My Rule #1 should be to talk to a GOOD Loan Officer, one you really trust and feel comfortable with. There are multiple reasons for this.
>The most important reason is that you need to know exactly how much you can spend. How can you shop for such a major purchase without a budget? You may think you have all kinds of buying power, but do you really? Or maybe you have more spending power than you knew.
Either way, you need to know what your spending ability will be.
>Another reason to talk to a Loan Officer is that you will need to see what type of loan you qualify for, or want to use. Every type of loan has it’s own set of rules that you must follow. To determine what type of loan you will utilize, you need to ask the Loan Officer several questions in order to find the loan that best suits your needs. Here are just a few:
>How much money will I need to put down?
->How much will I need for closing fees and what will those closing fees be?
>How long will the loan type I qualify for take from the day of the offer to the closing date?
You may be asking yourself why you need to know these things. Here is why:
>If you are looking at homes that you cannot afford, after you make an offer, you may find that you really cannot buy that house that you and your Buyers Agent spent so much time looking for. You will be disappointed, and so will the sellers, and both Realtors.
>When making an offer, deadlines are very important and must be followed to a tee or you can loose the home if not met. If, for example, you know that an FHA approved appraiser needs to be used and that they typically take longer, then that information needs to be considered when writing the offer. There are all kinds of rules that need to be known prior to making the offer, especially when things are changing so drastically on the loan front.
>You need to be prepared with how much money you will need to bring to the closing table. You have to know the down payment amount AND the closing
>You will also need to know the length of time that your type of Loan and your bank can take to close, because here in NC this is included in the offer to purchase as well. Take too long and you can miss another important deadline that could cost you that home.
Once you have your Loan paperwork ready, you will want to start looking at homes. Here is Rule #2. Do not call an agent who is listing the house you want to buy. First things first. Find yourself a Buyers Agent that you trust. Here is why.
>Let’s look at buying a house with a basketball analogy. You have two teams. Let’s call them Team Buyer and Team Seller. Each team has a coach. Let’s say the coaches are the Buyers Team Coach and the Sellers Team Coach. The coaches are pushing for the best for their own team. They just want to beat the other team and the coach makes this happen. But what happens if one team has no Coach? It becomes a mismatch pretty quick. To be fair the other coach could take both sides. But can he do that fairly?
>Lets say you call Listing Agent Joe Lister. Joe shows you the house and then writes up an offer for you. Who is Joe Lister coaching for? This is not a trick question, but one you need to understand. Joe Lister is coaching for the sellers, first and foremost. Anything that he knows about the sellers (ie: why they want to sell, what their bottom line is and any other possible important information) is between the sellers and Joe Lister. They had the contract with him first, and he knows everything about them. Can Joe Lister coach the buyer with the same confidentiality. If he represents both of you it is called Dual Agency. He would be the single coach in the game, which would now shift him to the referee. He is supposed to be fair to both parties and he is supposed to keep both sides confidential. How can he be fair to both sides when he already has an upper hand with the sellers? He needs to become a mediator with no opinion for either side. Can he advise you on price or negotiating things into the contract fairly?
If, on the other hand, you have a good Buyers Agent, Buyers Agent Coach assists you with the best terms and price possible because she is working for you. And she works for you at the seller’s expense. Here in NC, a home in the MLS is already contracted for the agents to share the commission, which is paid by the seller, so why not have your own Agent? Here are the ways your own personal agent can assist you at no cost to you:
>A Buyers Agent will know who the best Loan Officers are and will be able to refer you to a number of fair and good local people. They will assist you in getting all of the information from that person when the offer is ready to be written. A good Buyers Agent will follow through with that same Loan Officer from the time that your offer is submitted until the closing day, in order to ensure that the loan is ready on the day of closing.
>A good Buyers Agent will sit down with you and listen to your needs and wants for a home prior to seeing the first property, in order to avoid the pitfalls of falling in love with the wrong home and experiencing disappointment. They will not only show you homes in your price range, but will show you only those that meet your needs in terms of location, size and other things that are important specifically to you as a buyer. They will show you any and all homes that meet only your specific needs.
>Once you have chosen the home you want to buy, a good Buyers Agent will negotiate for you. They will work to get you the best possible price, the best possible terms and time frames. They will follow through on making sure that all time lines are met and that all inspections are performed in a timely manner. If there are issues that come up after the offer, a good Buyers Agent will be aggressive in renegotiating those items into the contract.
Rule #3 is that you must have patience. In these times there are all kinds of issues that can come up to slow down the closing. Closings used to take 45 to 60 days. Now they are shifting to 90 days or even many months, with foreclosures and short sales. Some homes have even reached a point of being un-sellable, which can mean starting over again. Keep this in mind as you begin the process. It could take a very long time, even on a home that appears to be an easy close. Right now is not the time for being in a hurry. When things move slowly, or an offer has gone haywire, just step away, take a deep breath and move on to something else. Patience truly is a necessary thing these days. Knowing this ahead of time can make all of the difference.
If you follow these three simple rules, you will save yourself a lot of headache and sorrow.
Buying a home for the first time should be a fun and joyous time in your life. If you can follow this advice and find the right people to assist you in this endeavor, it really can be everything you want it to be.
Happy House Hunting!
Jerri McCombs, Advanced Virtual Assistant
828/553-5190 or info@JerriMcCombs.com