I’m a real estate agent, as you may know, and I love working with first time buyers. It doesn’t usually result in a big paycheck for me, but I get to work with some amazing people and be a part of a huge event in their lives. I consider it an honor to help them. But many of my first timers are sadly surprised by what they need to have in order to buy a home. Most think they can hop on Zillow, look at the estimated price, put that amount against their income and they’re good to go. But there’s WAY more to it than that. Downsizers, you are also running into sad surprise many times.
First, you MUST sit down with your lender and get pre-APPROVED. Listen, a pre-QUALIFICATION is not worth the paper it’s written on, assuming there’s paper somewhere in the process. So be careful about the online estimators. If I am your agent, I am going to want you to get face to face…yes, FACE TO FACE…with a lender, so they know whom you are, and so that they can be held accountable for making the deadlines to which you will contractually obligate yourself. This is critical. The lending process is fraught with potholes, and you need to be more than a number among hundreds of numbers. You need that lender to know your NAME and be able to put your face with it. And I will need to be able to verify/check on milestones as the process progresses. BUT…you must have a letter from the lender that goes WITH your offer to the seller. That’s the norm now.
And listen, the lender is GLAD you are there. They WANT your business. So go in asking what they can do for YOU today.
Next: It takes DISCRETIONARY cash up front. You have to pay for inspections and you have to put up due diligence money AND earnest money (usually), and these days you should count on 15K and up, depending on your price point. Now please listen to this. You will get all of that back when you close, but if you WALK AWAY, the seller gets to keep your due diligence money and that can start at 4% of purchase price on average. OMG where am I going to get that kind of money? Well you can be gifted quite a bit. But you’ll need to talk to that lender person, the one you’re looking in the EYES, about that.
When you find a house you like, these days, sellers don’t have to pay your CLOSING COSTS, they don’t have to buy you a WARRANTY, they don’t even have to do repairs. In other words, don’t look for a fixer upper unless you are a fixer and you have the money and skills already on board. The seller is not going to help you out. Why? There are 20 other offers on the table that won’t ask for it.
Be sure your agent knows about any class action lawsuits about construction that happened during the age of the house you seek, and ALWAYS look in the crawl space. Make sure your agent knows what red flags to look for while you are looking at the space and placing furniture in your mind.
Don’t change jobs. Don’t incur more debt. Your job history is SO important, and debt-to-income is critical. Spiff up your credit score, pay off as much debt as you can, and save, save save. Ya gotta have some cash if you want your offer to win out against the many others.
Buyers always have a list of must-haves, but also almost always veer WAY off of that list in the end. So my advice is to have an open mind, because…it’s going to end up that way.
Let me know if I can help you; call me if you want to just chat. And have a wonderful day!
I am Brenda Briggs
Coldwell Banker Advantage