The state of the current real estate market has produced numerous changes for those wishing to buy their first home. Mortgage lenders are now often requiring 10-20% down payments before considering lending on a property. While there are some government agencies such as the Veterans Administration (VA) and Federal Housing Administration (FHA) which will enable a first time home buyer to purchase a house with less money down, these agencies have other specific requirements which must be addressed by potential buyers
The most logical first step for a buyer is becoming prequalified with a bank. Many lenders will issue a pre-approval letter to a buyer stating how much money the buyer can reasonably expect to borrow based on a cursory qualification of the buyer's income and assets. This will give a realistic dollar figure as to where in the real estate market to begin looking. The pre-approval letter can also be a "bargaining tool" to indicate to a seller that a buyer is bona-fide.
www.hud.gov/buying/index.cfm Buying a Home/U.S. Department of Housing and Urban Development (HUD) ... offer lower down payments and a good option for first time home buyers
Going House Shopping
The vast majority of today's home buyers are beginning their search on the internet. Internet listings include multiple pictures and even virtual tours of the subject properties, enabling a buyer to become familiar with a particular house before ever setting foot in it.
Buyers should have an idea of the style of home they would prefer. Large families might need the extra space offered by a colonial. Older buyers often prefer a ranch to avoid future problems with stairs. While some like the feel of a true antique, others want all of the most modern amenities found in new construction. Condominiums offer the busy person a place to call home without any of the upkeep associated with owning a house.
Neighborhoods Should Be Considered
Buyers with young children often want to be in a quiet area but close to schools. Some prefer a rural setting with privacy while others like the potential comraderie of an established subdivision. There are golfing communities, retirement communities, gated communities, some with recreational facilities such as pools, tennis courts, and club houses. Taking the time to decide what aspects of a future neighborhood matter is an important step in the home buying process, but buyers should be aware that some neighborhoods have associations which charge fees, adding to the overall cost of home ownership.
Selecting a Real Estate Agent
It is important that a buyer find a real estate agent who is a good "match" as far as compatibility. The relationship between the agent and buyer can become very close, and the lines of communication should be open from the very beginning. Buyers should remember that the real estate broker they are working with will be representing them throughout a complicated, and lengthy process from the initial offer to purchase through the actual closing of the property. A broker who is knowledgeable about home market values, neighborhoods, and recent developments and trends is a valuable resource.
www.homefinder.com Why You Should Hire a Real Estate Attorney
Using a Real Estate Attorney
Both first time home buyers and seasoned property purchasers need to keep in mind that there can be many pitfalls to overcome when purchasing a home. Once it is signed, the Offer to Purchase is a legal document binding Buyer and Seller. In order to protect oneself fully, it is recommended that an attorney specializing in real estate transactions be consulted to help with all documentation. A buyer should be fully aware of exactly what each document means before signing same.
The Home Inspection
Once a property is placed under agreement, a buyer should arrange to have a home inspection performed by a licensed inspector to determine if there are any problems with the subject property. Most home inspectors encourage the buyer to be present for the actual inspection and to accompany the inspector around the property during the process. It is customary for a broker to provide a list of home inspectors available to a buyer.
Home ownership is part of the American dream, but the process involved from start to finish can be stressful. Buyers should never feel reluctant to ask questions or seek advice from more those who have successfully bought a home.
Sources:
- Federal Housing Tax Credit: Home
- The Worker, Homeownership and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first time home buyers www.federal housing tax credit.com
- Common Questions from First time Homebuyers - HUD www.hudgov/buying/comq.cfm
