1st Time Homebuyer

The number of first-time homebuyers searching for a new home has increased dramatically.  With the number of foreclosures, short sales, and standard sales, looking for a home has become overwhelming with various terms and conditions in each type of sale. 

Home buyers need to watch for a variety of factors including length of time-to-close the transaction, market absorption rates conditions of the home, and costs of repairs,.  So, if you're looking for a home or plan to in the near future, here are 31 tips every first-time home buyer should know about before buying a home.

     General Mindset

1. Short sales that have not been pre-approved generally take much longer than foreclosures or standard sales to close.  Perhaps 6- 8 or more months to close.
2. Don't shy away from homes that are not in move-in condition.  If a few weekends of work will increase the value by $20k - it might just be worth the work
3. If you're looking at neglected properties, always think about inexpensive ways to improve curb appeal such as removing dead plants, a new front door, painting, or building a patio area.
4. Compare homes in terms of how much you're paying per square foot in homes that have similar features.  I can give you comparables for the neighborhoods you are interested in.
5. Drive by the neighborhood at different times to understand the community, traffic, and noise level.
6. Talk to your potential neighbors and get some tips on what it's like to live there.
7. Choose an area with good schools - this will come in handy for re-sale even if you don't have kids.

Mortgage Insights

8. Get pre-approved first (not pre-qualified), so that when you're ready to buy, the underwriting process is already underway.
9. Have a good understanding of your finances, what you can afford, how much property tax, and home-owners insurance is before looking.
10. Meet with a Mortgage Broker (your new best friend and invaluable resource!) to calculate how much home you can afford first.  Remember, your mortgage payment should be approximately 25% of your income, so buying the most home now may make you financially stressed later.
11. Speak with your Mortgage Professional if paying for points is beneficial to you.
12. If you don't have at least 5% of your down payment saved up, look into how "FHA loans":/home-loans/fha-loan can help.  Your Mortgage Broker can help you with this.
13. Get your "free credit score and report" at FreeCreditReport.com.
14. If you have low credit, look into FHA loans to help.
15. Remember, if you find a home that's structurally sound, but needs improvement - a FHA 203k loan can give you up to $30,000 for repairs on the home, making it great for investment property to turn around in a few years.
16. Ask your Title Company for a Good Faith Estimate to have a solid idea of how much money to bring to closing.  I can help you find a professional and competent Escrow Officer.
17. Don't forget about title insurance fees, survey charges, escrow fees, and loan origination fees, all of this is due at closing so it's good to know ahead of time what you'll be paying for.

Home Condition Insights

18. When looking at a potential home, see how old the water heater and furnace are, and if there's any rust.
19. Before deciding against the home, make sure it's because of large factors and not cosmetic issues such as the wall being dirty.
20. Don't place all damages on the same comparison level, for example a broken tile is far less serious than a leaking roof.  
21. Mentally compare the square footage between homes you've already seen.  Seems too small?  Think about the size after you add furniture
22. Check for mold along the edges in the basement.
23. Check for water damage along the walls of the basement or the side of the home; it may be as simple as making sure the gutters flow down further away from the home.
24.  Don't be turned off by paint colors - this is such an easy fix that it shouldn't deter you from a great bargain.
25.  If you need to buy appliances for the home, consider buying Energy Star certified ones to get the tax credit and be green.
26. Be sure to weigh your options in terms of price to fix a feature versus how much the feature is worth.
27. Look into what home improvements have the highest return on investment so you know which projects you want to take on.
28. Remember tubs can be re-glazed for relatively cheaply if one doesn't fit your standards.
29. Be flexible about your wants. Limiting your search to a set amount of features can prevent you from seeing other comparable properties.
30. If the home has a composite roof or wooden shingles, find out the age and make sure it does not need replacing soon.
31. Do your research and go prepared with an idea of what things you'd be willing to fix and what you'd have to hire out, and also what repairs you want to avoid.