From the importance of familiarizing yourself with the neighborhood to unexpected closing costs and more, experts share their insight for first-time buyers.
With many areas experiencing reduced housing inventory and record low interest rates, the current real estate market is more competitive than ever for buyers. "Today's buyer must be completely prepared with a pre-approval letter, proof of funds to close, and be armed with up to date information on values and trends in the market they are interested in," says real estate agent Christine Baker of Willis Allen Real Estate. "It is extremely competitive in today's market for even extremely well-qualified buyers."
Along with finding and securing a property, Ellen Sykes, a broker at Warburg Realty, says there are other moving parts that can complicate the home-buying process. "Obtaining financing usually takes a minimum of 30 days, even if you are pre-approved," she explains. "Houses need to be inspected, and in some cases, surveys conducted for property lines." Curious what else real estate agents and brokers say they wish buyers knew before they begin searching for a new home? From the importance of familiarizing yourself with the neighborhood to unexpected closing costs and more, real estate agents and brokers share their insight ahead.
A good agent is essential.
According to real estate agent Justin Fichelson, cofounder of Avenue 8, the first step to take before searching for a new home is to find an agent you can trust. "A reliable agent is someone who can advise you properly on everything from putting an offer down (so you're not over or underpaying) to specific details with regards to the neighborhood," he explains. "A good agent will help ensure that the buying process runs more smoothly."
Location is everything.
In the age of COVID-19, when we're spending so much time in our homes and neighborhoods, real estate agent Tamar Asken of Avenue 8 says location is more important than ever before. "Research a neighborhood before you consider moving there," she advises. "Drive through the location if possible, or 'walk the streets' via Google Maps, perhaps during the day and again at night—to get a sense of what living there might be like before you consider moving in."
Home inspections are critical.
The home inspection (and the inspector you choose) are vital to discovering any latent defects in a property that might cost you major money in the future. "Choose an inspector familiar with the neighborhood who will know the right questions to ask about the home," Latham Jenkins, a real estate broker in Jackson Hole, Wyoming, advises. "You will want to join the inspector at the end of the process to walk through the home and discuss any issues identified, as well as how the systems in the house work and where they are located. This is a key professional for helping you close that knowledge deficit."
Worry less about rates, and more about timelines.
When working with a lender to help finance your home buying costs, Asken says it's crucial to focus on the timeline of the loan—and not the mortgage rates. "As people are jumping in to buy and refinance at the current ultra-low rates, lenders are working with high volumes of business right now," she explains. "While they might promise you a 30-day turnaround, it's the buyer who ends up in hot water if their lender doesn't deliver. Be prepared to have very frank conversations with your lender so that you're fully in-the-know with regard to the timeline to close."
Real estate agent Julie Gans of Compass says it's also important to understand the timeline for purchasing a new home. "Every region or geographic area has a different process, so it is necessary to research how it works in the area in which you wish to buy before you get started," she explains.
Know the costs associated with buying and maintaining a home.
Whether it's the price of a replacement AC unit or the costs of landscape upkeep, Nicole Beauchamp, real estate agent at Engel & Völkers says understanding the costs of owning and maintaining a property is key when searching for a new home. "This is particularly of note for those who have lived in environments (often urban) where a management company or staff typically takes care of things," she explains. "Familiarize yourself with what appliances may be at or nearing the end of their lifecycle, and get an idea of what your ongoing maintenance costs will be, so you are financially prepared to own a home."
Agent Mihal Gartenberg of Warburg Realty says that closing costs can also create a huge financial burden if buyers aren't expecting them. "Shopping around for the best rate and closing-cost package is a good idea," she says. "It's also important to recognize that the cheapest rate may be coupled with the highest closing costs. So, understanding the pros and cons of each offer in the short and long-term is very important."
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