The 5 Biggest Questions for First-Time Homebuyers

September 20, 2015 by AJ Smith

It’s only natural for a first-time homebuyer to have questions. For many of us, buying a home is the largest financial decision we make. It’s important to be thoughtful and confident in whatever choices you make. Check out the important questions below to help you prepare for homeownership.

1. Is It Better to Buy or Rent?

The rent vs. buy decision is common among Americans looking to make their next move. Some say that buying is always a better financial choice, but that is not necessarily the case. It really depends on your individual financial situation.

It’s important to ask yourself how long you plan to stay put, how stable your job is, how the monthly costs compare, how the total costs compare, and if you are both financially and emotionally ready. The truth is, there is no clear right or wrong answer. In some cities, and for some people, buying a home makes more sense, but for others, renting may be the better choice.

2. How Much House Can I Afford?

Having a realistic estimate of how much home you can afford will help you gauge your next move much better. You can use online tools to help estimate the total value of a property you can afford, what your mortgage payment and amount are likely to be and what kind of down payment you will be looking at. Your income, credit score, debt ratio and desired location will all play an important part in the calculation. You want to find a home you are happy with without scrambling to live month to month. It’s important to establish your housing budget carefully. (You can check your credit scores for free on Credit.com to see where you stand.)

3. Is It Better to Buy an Existing Home or Build?

Most buyers spend a lot of time and energy either searching for or designing the perfect home. It makes sense, because each buyer typically has a wish list that includes specific needs and wants. Buying an existing home will almost always be faster and more convenient, but does involve numerous steps like viewing homes, making offers, home inspections and closing. Plus, you may have to do work on the home to make it fit your needs. Building a home, on the other hand, ensures you can get exactly what you want (so long as you can afford it). This usually comes with a longer timeframe and heftier price tag.

4. How Do I Find a Lender?

It’s important to do your research when it comes to choosing a lender. You want to find the best offer and also a reliable lender. It’s a good idea to research broadly and then narrow your focus once you find a type of lending environment that makes you most comfortable and offers reasonable rates in your area. You can ask at the bank or credit union where you currently have an account and turn to friends and family members for referrals. Applying to multiple lenders at once can increase your chances of approval at the best possible rate without dragging down your credit score.

5. What Happens at Closing?

Closing is the final step before you become a homeowner. It’s a good idea to know what you are in for during this step. This will be when the title of the home is actually transferred from the seller to the buyer.

Knowing the answers to these five questions can help start you off on your homebuying journey. Next, you can try to find the right neighborhood and home for you. Before you know it, you will be an educated homeowner enjoying the property that fits your personal needs and goals.

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About the Author - AJ Smith is an award-winning journalist with more than a decade of experience in television, radio, newspapers, magazines and online content. She currently serves as the managing editor for SmartAsset. AJ has a passion for meeting new people, sharing stories and helping others. She has degrees from Princeton University and Mississippi State University. AJ and her husband also write and illustrate educational children’s books. More by AJ Smith

Different Generations See the Value in Homeownership

by Steve Harney on April 18, 2013 

Our founder, Steve Harney, occasionally asks to do a personal post on what he sees as important to our industry. Today is one of those days. – The KCM Crew

During an online chat with other real estate professionals last week, the question of the true value of homeownership was raised. My son, Bill, and I each chimed in unaware of the other’s response. It was interesting how the different generations valued homeownership for slightly different reasons. Below, are both responses.

Bill’s Response:

 

I want to weigh in as a 20-something who recently purchased a home for the first time.

While the financial reasons (wealth-building, not wanting to throw away rent payments every month, that owning is actually cheaper than renting in many markets right now) certainly had an impact on our decision, I think there are too many that are quick to dismiss the non-financial reasons that my peers and I discuss more often than people think.

There’s a very good reason why my wife and I host more parties than my friends who live in apartments (space). There’s a reason why we get more compliments about our house than our renting friends (freedom to choose our own stuff). We have the greatest dog in the world, while I hear “I can’t wait to get a house because I’ve always wanted my own puppy but I can’t right now”.

As a “young” buyer, do I want to make a smart decision? Of course. Do I want to understand the numbers and feel confident with the purchase? Sure. But that’s not what I woke up dreaming about 2 years ago. I woke up dreaming about the house that my wife and I can raise a family in; the house where we’re going to have barbecues with all our neighbors.

We woke up talking about the house that finally allowed my wife to get the dog she’s wanted since she was a kid (and that I fell in love with). We started picking out bedroom colors for our future babies.

You want advice for helping more young buyers? Ask them what their dreams are. What are their goals? What do they wake up talking to their partner about? Help them realize this and you only have to show them that the financials make sense (we’re not looking to make a quick buck on the house we’re living in).

Isn’t this what real estate is about anyway? Helping people realize their dreams? That’s what it was always about in my house growing up (thanks Steve). That’s what my wife grew up thinking. That’s what my friends (all in the first time home buyer range) think. Why not talk to them about this?
Sorry for the rant everyone. Figured I had a spot for the voice of the young buyer to be heard by the industry’s elite and I couldn’t pass that up. Thanks for reading.

My Response:

 

Do I think that homeownership is right for everyone? No, I don’t.

Do I think people who can’t afford a house should buy one anyway? No, I don’t.

However, I do believe for the majority of families that homeownership is important. Instead of giving you the links to the numerous studies I have that delineate the benefits of homeownership, I’ll give you one anecdotal story – my own.


Guess where I got the seed money to start my real estate company? My home.

Guess where I got the money for Bill’s college education? My home.

Guess where my younger son, Steven, moved to when he couldn’t find gainful employment after college? My home.

Guess where my older son, Bill, and his wife (and cat & dog) moved to when Sandy ravaged their house? My home.

Guess where I got the down payment for a winter getaway in South Beach for my wife and me? My home.

The home I struggled to buy over 20 years ago has financed my business, put two sons through college and enabled me to buy a winter escape in Florida. And during that whole time, it also allowed me to provide my family shelter during their times of need.

Do I firmly believe in the value of homeownership? Yes, I do!!

Ready to start your own Real Estate adventure? If so let's chat and get you on the right path.

Noemi Cardoso
William Raveis Real Estate
911 Main Rd - Westport MA 02790
Cell: 508-558-1945
www.DistinctiveHomes-NE.com
Noemi.Cardoso@raveis.com
Serving Ma & RI
Fluent in Portuguese and English


 

Warren Buffet Bets Big on Real Estate

As reported on Bloomberg:

“Warren Buffett’s Berkshire Hathaway Inc. is extending its bet on the U.S. housing market by forming a venture with Brookfield Asset Management Inc. as low interest rates, inventory and prices spur a real-estate rebound.
Berkshire’s Home Services of America Inc. unit will be the majority owner of the venture to manage a U.S. residential real-estate affiliate network…The firms plan to offer a new franchise brand, Berkshire Hathaway Home Services, starting next year. Brookfield’s network has operated under the Prudential Real Estate and Real Living Real Estate brands.”

According to the new company’s announcement:

“This new franchise brand joins the existing brands and affiliate networks of Prudential Real Estate and Real Living Real Estate and will be available in 2013.
The resulting combined networks of more than 53,000 Prudential Real Estate and
Real Living Real Estate agents were responsible for generating in excess of $72 billion in residential real estate sales volume in 2011, and operate across more than 1,700 U.S. locations.”

Mr. Buffett purchases the franchising opportunity for a large number of real estate companies and plans to use the iconic Berkshire Hathaway name in the rebranding. We assume this is a great sign that he believes a real estate recovery is guaranteed.


If you are thinking of buying a home in Westport MA visit www.DistinctiveHomes-NE.com for a free list of homes for sale in Westport MA.

If you are thinking of selling your home contact me for a FREE Current Market Analysis and to learn about our Market Plan to get your home SOLD!

Noemi Cardoso

William Raveis Chapman Enstone
911 Main Rd - Westport MA

Cell: 508-558-194
www.DistinctiveHomes-NE.com
noemi@DistinctiveHomes-NE.com

How the Serenity Prayer Applies to Real Estate

by Steve Harney

You may be wary of either buying or selling a home in today’s market. You may feel powerless to the process. How could YOU possibly know whether the current good news about housing will continue? There is no doubt that today’s real estate market is extremely difficult to navigate.

However, we want you to know that thousands of homes sold yesterday, thousands will sell today and thousands will sell each and every day from now until the end of the year.

It is totally within your power to decide whether it is the right time for you and your family to move. Even in the current market.

“How?” Let’s look at the simplicity of the famous Serenity Prayer and apply it to selling a home in today’s real estate market.

“God, grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.”

Accept the things you cannot change

The two main concerns many talk about when discussing the housing market are:

1. the current economy
2. the election later this year

As an individual, there is very little you can do to impact either of those two situations (outside of voting on Election Day). The best think-tanks in the country are struggling to discover what impact each of these items have on real estate.

Have the courage to change the things you can

If you are a seller, there are plenty of buyers in the market for a home they consider priced correctly. You have to decide what the correct price is for your home if you truly want to sell. If you want your house sold, you must list it at a price a buyer will pay for it. Not a buyer from 2006 but today’s buyer who has plenty of homes from which to choose. It will take courage to sit with a real estate professional and honestly decipher the true value of your home. If you want to sell, you must have that courage.

If you are a buyer, and you believe now is the right time for your family to purchase a home – DO IT! Prices are back to pre-bubble prices and interest rates are at historic lows. That means that your monthly housing expense will be lower than any time in the last 50 years – and probably lower than your current rent payment.

The wisdom to know the difference

We all realize that the economic situation will take some time to correct. The question is whether or not it makes sense to delay moving on with your life until everything gets ‘better’. Should you not sell your home and delay reconnecting with friends and relatives that have all moved to another part of the country? Should you not buy a house and enable your kids to attend the school you have already decided is best for them? Should you spend another winter up north even though your doctor recommends you move to a climate better suited to your current medical situation?

This is where your wisdom must kick in. You already know the answers to the questions we just asked. You have the power to take back control of the situation by moving forward. The time has come for you and your family to move on and start living the life you desire. That is what is truly important.

If you are thinking of buying a home in Westport MA visit www.DistinctiveHomes-NE.com for a free list of homes for sale in Westport MA.

If you are thinking of selling your home contact me for a FREE Current Market Analysis and to learn about our Market Plan to get your home SOLD!

Noemi Cardoso

RE/MAX Welcome Home

Cell: 508-558-1945
Home Office (Westport) 774-264-9085
www.DistinctiveHomes-NE.com
noemi@DistinctiveHomes-NE.com

Buying a home? Buying a home? Things to know before starting driving around...

If you are currently in the market for your first home, you probably have lots of questions. You are about to be making an important decision for your future, a great investment of both money and time. I have a wealth of experience helping first time buyers like you make sound, informed decisions. Here are some tips that can help make your home buying process successful:

• Tip #1: Do Your Homework - The perfect home won't find you by itself. The key step in buying a home is doing the proper research. Educate yourself on local schools, neighborhoods, and the kinds of homes available. By reading available materials and talking with experts, you can start to put together your idea of the perfect home.
• Tip #2: Start Planning - Most decisions benefit greatly from proper planning, and home buying is certainly no exception. Start a filing system with sections such as home buying, home financing, and service providers. By forming a home buying plan you can more easily focus on the most important factors and help give structure to the entire process. My website is a great resource for property information.
• Tip #3: Shop Around for Your Mortgage - Deciding on the financing for your home can be as important as choosing a home itself. The first step is deciding what kind of loan best fits you: a fixed rate mortgage, or an Adjustable Rate Mortgage (ARM). There are benefits to each form of loan, and your real estate professional can provide you with more information. Next you'll want to begin to shop around for different lenders. Learn and understand about your closing costs and down payment expenses. Even a 100% financing still have costs involved.
• Tip #4: Get PreQualified - Getting prequalified for a loan normally only requires a short phone conversation with a local lender, and can greatly help your home search. Prequalification does not guarantee you a loan, but it does provide you with an estimated monthly payment and a price range to use as a guide when shopping for homes. Being prequalified can also often indicate to sellers that you are a serious, prepared buyer.
• Tip #5: Get a REALTOR - Having an experienced full time REALTOR, who is familiar with the neighborhood where you plan to move to is a great way to avoid frustrations and misrepresentations. off course the listing agent can submit an offer in your behaf the bottom line is, they still have obligations to the seller's and will look for the best deal for the seller. A Buyer's agent will represent you, looking for THE BEST DEAL FOR YOU. Read past clients testimonials, ask for references, if necessary, discuss upfront if there are fees involved with their services (usually there are no costs to it). Your agent will assist you through the process making it much easier on you and the family. Besides protecting your insterests, a buyer's agent will do all the leg work for you, sifting through hundreds of listings and getting to know you to find you that 'home' you have been looking for. A Realtor will also provide you with statistics on recent sales and sale prices in the area, assiting you from setting up showings, preparing paperwork, following up on dates and documents, protecting your deposit and sharing a network of services, if needed, to closing and beyond.
• Tip #6: Look for Value - When shopping for homes, it's important to consider potential value. Even if you're not planning to sell the home some time down the line, it's a good idea to consider the future value of the home. Protect yourself against things like falling prices and gradual shifts in the nature of the neighborhood. You may not think of a new home as a means to make money, but it's an important investment that requires caution.
• Tip #7: Decide What You're Looking For - Settle on the home features that are important to you (covered parking, hardwood floors, architectural style, etc.) and make an ordered list. Having well established guidelines will help narrow down your search and will prevent you from being shown properties that lack your key amenities. It can help you make the decision not to buy an attractive property that doesn't really fit your needs. My website has a search feature that allows you to filter thousands of listings based on attributes that you select. If you know you want a brick house with gas heat and a garage, you can get the results you're looking for.
• Tip #8: Relax - You don't have to make an offer on the first home you see. Make sure to look at other listings in the area to get a feel for the marketplace. When you decide to make an offer on a house, consult with your real estate professional so that all of your questions are answered.
• Tip #9: Protect Yourself - Be careful when signing a contract on a home that allows you to find financing, have the home inspected, and work through any problem areas that may arise. Paying for a quality home inspection is absolutely crucial! You can save yourself thousands in repair costs by being sure of what you're getting into.

More information for first time buyers can be found on my website, or by giving me a call. I'm confident that I can provide the kind of exceptional service that will make this process an exciting one. Don't hesitate to contact me with any questions you may have, I would love to be of assistance to you.

Noemi Cardoso
RE/MAX Welcome Home
Serving Westport, Dartmouth, Fall River, MA
Little Compton, Tiverton, RI and surrounding towns.
www.DistinctiveHomes-NE.com

Portions of this blog are extracted from First Time Home Buyers Mailing Campaign from REMAX.Com