SPECIAL SECTION:
Real Estate
WHAT FIRST-TIME
HOMEBUYERS
SHOULD KNOW
Last year was a great year for new homebuyers.
According to the National Association of Realtors, about
35 percent of the homebuying market was made up of
first-time buyers. Yet, each year is not created equally in
the mortgage industry and real estate market. Changes
happen frequently and it is often hard to keep up. If
you’re looking to break into real estate for the first time,
here are some insights into how to navigate the market.
Saving. Step number one for a first-time homebuyer
should always be saving. Take a look at your current
finances. It’s recommended that your mortgage
payment not exceed 30 percent of your gross monthly
income. See where you can cut back spending to put
away a little extra out of your paycheck every month
for your new home. Not only can this cash go toward
a down payment, but most likely you’ll need furniture,
appliances, and decorations to furnish your new home.
Don’t just calculate the amount of money needed for a
down payment. Keep in mind the unforeseen expenses
such as home repairs, agent fees and closing costs. You
can never save too much!
1. Mortgage. Applying for a mortgage can be an
intimidating process, but if you prepare accordingly,
you’ll be happy with the outcome. According to
LendingTree.com, mortgage lenders are allowing
higher debt levels for borrowers with lower down
payments (as little as 3 percent on a conventional
mortgage loan). You may not need the typical 20
percent down that was required of homebuyers a
few decades ago. If your debt-to-income ratio is high,
you may not have to worry. Mortgage companies
are making it easier for borrowers with more debt to
still qualify.
2. Agent. Having a real estate agent in your corner
for a first-time purchase is key. Agents will not only
help you navigate the home-buying process, but can
also be a valuable resource for an inside look at new
homes that go on the market. This gives buyers the
opportunity to view homes that may not have made it
onto real estate websites for public viewing.
3. Location. Your dream house may not be in your
dream location, and your dream location may not
have your dream house. Don’t get stuck in a rut if
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6. BUYING/SELLING:
Your real estate agent matters.
According to Zillow CEO Spencer Rascoff, research shows
gender matters when choosing a real estate agent. Rascoff says
men will get your home sold closer to asking price because they
are stubborn, while women will negotiate and close the deal faster.
Most importantly, find an agent who will work on your behalf.
Ask friends and family for references of agents they’ve used in the
past. Look up their current listings to see if they align with the
type of home you want to buy or sell. This will also indicate their
knowledge of the market.
7. BUYING/SELLING:
Get a second opinion.
When you have lived in your home for years, it’s easy to
overlook problems that potential buyers may spot right away. Have
a relative or trusted friend come over to spot any small fixes that
you can make prior to putting your home on the market to make
sure it’s in optimal condition prior to selling. When considering
buying a home, it’s also helpful to have someone who is not buying
the home go with you to take a look. He/she will be able to point
out potential issues that you may not see when trying to make such
an important decision.
8. SELLING:
Ignore the housing market.
Don’t waste your time watching the housing market for the best
time to sell. According to Investopedia, “it doesn’t matter what
your home is worth at any given moment except the moment
when you sell it. Being able to choose when you sell your home,
rather than being forced to sell it due to job relocation or financial
distress, will be the biggest determinant of whether you will see a
solid profit from your investment.”