Purchasing a home for the very first time can be a joyous yet stressful event. Whether you've been a long time renter, or are a young millennial ready to spread your wings and fly out on your own, buying a home is a much more complicated process than searching properties on the Internet. Today's current home buying market in many ways is much the same as it's always been but in other ways it's vastly different than it was before the past economic recession.
Mortgage lending guidelines are tighter and more restrictive. Banks and lending institutions can require jumping through and around many more hoops and obstacles for you to attain pre-approval for a loan. New laws are being enacted that will extend the amount of time it takes to purchase a home once you are under contract with a seller. In some areas around the Country they are seeing such a low inventory of homes available for sale bidding wars are becoming normal once again.
Hiring the right real estate agent to represent you is essential now more than ever before.We keep educated, trained, and up-to-date on all of the laws and contractual requirements pertaining to the purchase of a home. Myself being a real estate agent and now Broker for almost two decades I see a few adverse trends forming among new and first time home buyers that are keeping them from finding and closing on the right home.
1. Don't spend all of your savings on your down payment
The old way of thinking was to put as much money down on your home as possible. In principle, the thought behind this was to give you the most affordable monthly payment. Also, if you put 20% or more money down on your home you could avoid the required mortgage insurance. But what happens when tragedy strikes and all of your money is tied up in to your home? What if you or your spouse lose your job? What if the housing market dips and starts to eat away at all your hard earned savings that you dumped in to your property? Once you put that money down you no longer have easy access to it for when that rainy day hits.
Don't let someone convince you the more money you put down on your home the better.That's simply not the case anymore. You may be able to easily qualify for a loan with the amount of money you already have saved! Find a lender who will give you options. Let them educate you on all the different scenarios available to you and pick a loan program that has a good balance of money down requirement but still allows you to keep some of your savings in your pocket.
2. Nobody has time for low-ball offers anymore
Do you want to know the quickest way to lose the home of your dreams? Submit a low-ball offer to the seller. Not only will it be roundly rejected but you might not even get the courtesy of a response. Long gone are the days of sellers being trapped in their homes by payments they can't afford desperately searching for a buyer to rescue them. The latest monthly data report for Arizona shows that sellers are getting almost 97% of the asking price for their home. That means for a home listed for sale at $200,000 a seller will most likely get $194,000 or more for that home.
Generally, most new and first time home buyers also require the seller to assist them with their loan and closing costs. This assistance requirement will cause a seller to make other offers they've received a higher priority over yours if your initial offer is too low. If you find a house that you want then go get it. Don't waste precious time at the bargaining table which could allow another buyer the opportunity to get their offer in that may be higher than yours. Let your agent show you the most recently sold homes in the area to formulate an appropriate, realistic, and strong offer price.
3. There is no such thing as the perfect house
We've all seen the tear jerking moments on reality TV shows when a home buyer walks in to the home of their dreams that has everything they've ever wanted in a home. Well, I hate to be the one to burst your bubble but that's not reality. The perfect home does not exist. It ranks right up there with Unicorns and Big Foot. Every home will have pluses and minuses. New and first time home buyers always have their list of "must-haves" in a home. Some of the items on that list could very well be attainable but you will quickly find out that your list of "must-haves" is more a list of dreams and wishes you'll never see come true. You'll either be able to find a home in your desired location but it will need some renovating. Or perhaps you found a nicely upgraded house but it doesn't have that extra home office space you wanted. Maybe you found a move-in ready home within walking distance to work, but it sits right across the street from the local elementary school.
You get my point. You will need to make compromises. If you waste time searching for your perfect home other houses that would have still been a good fit will be snatched up by other buyers while you're on the sidelines. Meanwhile, interest rates will be rising and so will property values. A perfectly good home that could have been in your price range will soon be out of reach if your home search takes too long.
Buying a home for the very first time takes knowledge, strategy, and patience. Very rarely will you find a home that works for you right away. As your agent, I will show you multiple properties, in multiple locations that will work for you. I'll educate you on the amenities of each neighborhood, as well as the surrounding areas so that you can weigh out the positives and negatives of each home. Most importantly I will be your best advocate when it comes to getting you in to a great home for the right price. If you are in the market to purchase or sell a home in Gilbert, Arizona or the East Valley, contact us today!