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Buying Your First Home? Here’s What You Need to Know

By Michelle Fradella, Broker – Pinnacle Real Estate Services, LLC

You’ve made the decision to make one of the largest investments you’ll ever make in your life-buying your first home. You’re excited, but at the same time anxious. Some of the questions you may be asking are: Will I be able to afford the home of my dreams? Do I have enough money for a down payment? Can I get a home inspected before I make an offer?

The homebuying process can be overwhelming, but if you go into it prepared, your first purchase can be a good experience. Here are some things to consider before making the plunge.

Getting a mortgage-Fear of being rejected for a home loan is one of the main concerns for first-time homebuyers. To lessen the stress, you may want to get pre-approved for a loan before looking at prospective homes. This will not only help you feel more confident, it will also give you an advantage when there are multiple offers for a specific home. The fact that your loan has already been approved is of great value to the seller: because it shortens the purchase process and there is less of a chance that the buyer will back out of the sale.

Mortgage Payments-The costs involved in the purchase of a home can be overwhelming to first-time buyers. However, with the help of a real estate professional, you can calculate out how much they you be able to pay each month in mortgage payments, and from there, what prospective homes offer a feasible payment plan.

Down-Payment-The down-payment amount varies depending on the value of the home you choose and your mortgage lender. And in some cases, first-time home buyers can purchase a home with no money down. Although it varies from state to state, most offer government-funded programs for first-time buyers that help people buy a home with no down-payment. Your real estate professional will be able to explain the different options available to you.

Closing Costs-First-time buyers often forget to consider the closing costs when making an offer on a home. Paying closing fees of up to 10 percent of the home sale amount is not unusual. Add that to the down-payment and you’ll have quite a sum to raise before the final papers can be signed. However, a smart first-time buyer takes this into account before making an offer, and with some professional help, the costs can be estimated in advance.

Making offers-Don’t feel pressured into making an offer on the first home you see. This is a common mistake of many first-time homebuyers. Make sure you view different homes to get a feel for the marketplace. When you do decide on a home to make a bid on, work with your real estate professional to get all of your questions answered first before making an offer. But don’t wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.

Condition of the Home-Buying a “problem” home is another fear of first-timers. A home that needs major repairs can become a costly venture. And, unless the asking price is adjusted to reflect the hidden repairs needed, chances are the home is not worth as much as the seller is asking for it. To avoid unfortunate surprises, your real estate professional may advise you to hire a home inspector before making a serious offer. That way, you know what you are getting into.

Above all, remember that there are no silly questions. Make sure you understand and are comfortable with every aspect of the transaction. Your real estate professional can be an invaluable asset in helping you make educated decisions so that your first-home purchase is a rewarding experience.

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Can You Afford to Sell your Home?

by Michelle Fradella, Associate Broker – Keller Williams Realty Professionals

With the market changing drastically over the past few years, there is a new question that must be asked – “Can you, Mr/Mrs Seller, afford to sell your home?”  Now this question may be a bit alarming to some people, but the fact of the matter is sellers are finding that the market is not able to sustain the amount of money they owe on their homes (if they have refinanced in the past 5 years), and they may not be able to get enough for their home to actually close without bringing money to the table.

Many sellers may have heard about, and think they are in the position to consider a “short sale”, but unfortunately not everyone realizes the intricacies of doing one.  It’s important for a seller to notify their Realtor AT THE TIME OF LISTING, that they will come short of the amount they need to pay off their loan, and will need to ask the lender for the possibility of a short sale.  Keep in mind, however, that the lender is never, in any way, obligated to actually take less than what is owed on the house, and that there are specific circumstances that must be present, in order for this to be considered.

A short sale is not something that can be handled overnight, either.  The process will all depend on many variables that are not the same in each case.   A short sale can take as short as a few weeks, or a few months, to over a year to get approved.  A buyer may not be willing to wait for you to get that approval, or their lender may not let them wait, either.

Another important factor to know is that (even if you are in the process of working a short sale with your lender, and have a buyer ready to buy) if you don’t make your regular payments to your lender, they can, AND WILL, foreclose on your home.  If you aren’t able to make the payments during this time, your Realtor needs to know this, so they can also be in touch with the Foreclosure Department for your lender, and communicate with them constantly to assure that the house isn’t taken in foreclosure.  It’s standard practice that the foreclosure department and short sale department of a lender do not communicate with each other, and things can go wrong very quickly.

When putting your house on the market, you have to disclose to all Realtors and parties that your home can only go to closing if the lender approves a short sale.  You will also need to get all the contact information for your lender to your Realtor so they can be in constant contact with the lender to assure that things are moving in the right direction.  Be aware that not all Realtors are experienced in the intricacies of short sales.  It’s very important for your Realtor to know and understand the process, to be able to assist you in the best way possible.  Look for a Realtor that has the “SFR” designation (Short Sale and Foreclosure Resource).

Remember to always disclose to your Realtor, up-front, what your true situation is, and be prepared to be in the process for the long haul.