First-time Home Buyers
Why should I buy, instead of rent?
Purchasing a home is an investment. If you are currently renting, think about how much you hate handing over that monthly check, knowing that your money is gone forever. But, when you own your home, you can deduct the cost of your mortgage loan interest from your federal and state income taxes. This can save you quite a bit of money each year because the majority of your monthly mortgage payment is interest for many, many years.In California, you can also deduct the property taxes you pay as a homeowner. Be sure to talk with your lender and tax consultant to discuss the financial impact of owning your home.An added bonus to homeownership is that the value of your home may go up, approximately 7% a year on average. However, houses have been appreciating much more than that over the past several years, especially in Sonoma County and the San Francisco Bay Area. And finally, the best part of homeownership is that you’ll enjoy having something that’s all yours – a home that you can repaint, refurbish, decorate, landscape, and enjoy as you please.
Buyers Agent Free to the Buyer
Through the years, I have found that there is sometimes a little confusion on how the buyers’ agent is paid. Many people are worried by the thought of having to hire someone to help them find a home in addition to the cost of having to purchase a home. But buyers usually don’t have to spend a dime getting all the service I provide you with as a buyer’s agent! Yes, it’s true, buyers do not pay their agents to work for them; traditionally, the buyers’ agent is actually paid by the seller.
This does not mean that the buyers’ agent works for the seller; the sellers usually have their own agent. My loyalty and fiduciary responsibilities (when I’m in the role of being a buyers’ agent) are only to my buyers. Yes, you will still have to pay for any home, pest inspections and anything else you wish to have done, but you do not have to pay me even though I will work hard for you. What I ask for, if you are pleased with my service, is your loyalty in return and that you refer your friends and family members to me. I promise to take good care of your referrals.
Now that I’ve decided to buy, where do I start?
There are three important things to know before you purchase a home
- What can you afford?
- What is your credit like and what can you do to make it better?
- How do I get pre-approved?
A good lender can help you with all of this. First you’ll want to check your credit rating. Credit scores range between 400 and 800. Generally, the mid to high 600s is considered ‘good’ and anything close to or over 700 is considered ‘premium’ and will usually qualify you for better interest rates.
Here is the contact information of the 3 major credit reporting agencies. You can contact them or your lender will to determine your credit rating. Your credit is like gold; if you need to, ask your lender what the reports mean and how you can improve your credit score.
Equifax 800.685.1111 www.equifax.com
Experian 888.397.3742 www.experian.com
Trans Union 800.888.4213 www.transunion.com
Contact me if you want referrals to some excellent lenders that I have worked with through many smooth transactions.
It’s very important to be pre-approved for your bank loan. This will help you determine what size payment you’re comfortable with and how much house you can afford. It means, once you’ve found a home or piece of property you really want, you can act quickly, and your offer will be stronger than that of someone less prepared. Sellers will want to know that you are pre-approved and their agent will often call your lender to verify that you are.
Remember, lenders like stability, so now is not a good time to make other major life changes such as changing your job, making large purchases or even moving large sums of money around.
Now that I’m pre-approved, how do I get started?
Now that you’re pre-approved, it’s time to shop!
I will listen carefully to your needs and wants as we look at houses so I can help you find the perfect match for you and your family. I’ve had experience with many first time home buyers and will be there for you every step of the way to make sure that the process is smooth and timely. (Some clients have said that my experience in personal, couple and family counseling has been a real bonus.) I have strong relationships with a good working “team” of professionals from lenders to carpet cleaners; whatever you need along the way, I can help you get the information or professional service that you need.
What do we do now that we’ve found the perfect home?
Making an offer on your “perfect home” is often a very exciting and emotional experience. When it’s a sellers’ market, as we’ve had over the last few years when the interest rates have been exceptionally low, it can be very competitive and there have sometimes been many offers for a desirable home. This can be come an emotional roller-coaster. But remember, whatever happens, and no matter how much you have your heart set on a home, don’t loose sight of what you can afford. Offering too much may put the home out of your comfortable budget range whereas offering too little may see your offer rejected. I will help guide you on how to make your offer as strong as possible while protecting your interests, what things to expect and not to expect, and how best to handle your nerves when all of this is happening.
What if my offer is accepted?
“With the market being so competitive, we wouldn’t have gotten our beautiful home without Susan’s persistence.”
— First-time homebuyers
Sarah and Carlos Montes, 2005
Congratulations, you’re one step closer to homeownership! Going into escrow opens the door to unfamiliar territory for many people. As your Realtor®, it is my job to help guide you through this process. I can help you determine what inspections you may want to or should have done on the home and property and help you to get in contact with professionals to help you with each of your needs.Escrow has two phases. The first phase is called the contingency phase. This is the primary time during escrow where you have inspections done on your soon-to-be home, find out about your loan package, and find out about the appraisal of the home. Once you are satisfied with all of these things and the contingency period is over, escrow will goes into the second phase called pending. Once an escrow goes pending, buyers and sellers can start planning more seriously for the move ahead. Everyone is excited now! Cleaning and packing will be foremost on your mind and, although I won’t be able to help you pack, as your agent I can help you get reliable personal assistance with cleaning and packing, free moving boxes, and free storage. I can refer you to reliable movers, and provide you with a list of important phone numbers that are helpful to have when you are moving – numbers for utilities, school districts, medical care, house keeping, remodeling, and gardening.
What if my offer is rejected?
In a multiple-offer situation, many people will have their offers rejected. As your agent, it is my job to help you make your offer as desirable as possible to the seller. Sometimes a more desirable offer comes along; perhaps someone offers all cash or offers a considerably larger amount of money. If your offer is rejected, sometimes we can negotiate, if the sellers are open to negotiation. If we cannot, sometimes your offer can be made a back-up offer. That would put you next in line should the accepted offer fall through.
But sometimes, no matter how much effort we put into an offer and how many emotional ties you have to the home, your offer is not accepted. This can be very upsetting, but it helps to be prepared for this possibility. Also, it helps to know that, as a team, we did everything we could to put your best face forward and to get your offer accepted. But don’t worry! An even more “perfect home” is still out there waiting for you! Consider this time as practice before you make an offer on the home that you really, really want.
Now can I have my keys?
<img Now the home is almost yours. If you want your keys, escrow must close, and to close escrow you must sign and finalize your paperwork. Closing is a settlement time when the property is formally sold and transferred from the seller to you, the new buyer. At this time, you take on your loan obligations, pay closing costs and receive the title from the seller. Once the transfer of title is recorded with the County, the home is yours. Now it’s time to move in and reap the rewards and contentment of homeownership–now you can have your keys!
For additional useful information, you can check out Information for Buyers on our Coldwell Banker website.
I Can Help You Get Started!