In this buyer’s market, you can count on getting some long-term, personal attention from your realtor. “It’s a wonderful time for the buyer-agent relationship,” says Lucinda Sharp-Gates, a real estate educator with Gates Real Estate Concepts and an agent with Sharp Concepts Realty. “We get an opportunity to really focus on our buyers, helping build their trust in us. And it’s a great time for us to rekindle relationships with former clients, too.” The slower pace allows more time than usual to work together and for realtors to get to know buyers’ needs.
Don’t worry about overpaying for a home with today’s economy being so unstable. Instead, get out there and make this market work to your advantage. Hosta-Stickney likens the real estate market to the stock market. “You have to look at it long term, over many years. It goes up and down. And when it’s down, it’s a great time to buy.” But she also says to look beyond the investment aspect and remember that when you buy a home, you are purchasing shelter for you and your family. Not only will it appreciate over time, but you will be living life, creating memories and making your home during that time as well.
To give you a head start on your home search, we’ve gathered a baker’s dozen of insider tips from our CABOR pros:
Weigh your options.
Hosta-Stickney says: “If you live in an apartment, you’re in a prime position to take advantage of this market. Before you do, conduct a rent vs. own analysis to see your personal tax benefits of owning over renting.” She says a real estate professional or lender can help with this.
Know your credit score, get preapproval, narrow down your search and commit to a reliable realtor and lender. “There are so many homes on the market right now, you must have a clear idea of what you are looking for and build a team of pros to help you stay focused. That way you’re sure to have a productive, satisfying shopping experience,” says Sharp-Gates.
If you start putting aside as little as $300 to $500 per month, you could save enough for a down payment on a starter home. Since it can take a year of planning, prescreening, house shopping, inspections and paperwork, you can get started right away and save while you’reshopping.
Don’t be intimidated if you think you don’t have enough of a down payment to get a loan. You can purchase a home with as little as 3.5 percent down. “Just because this is a turbulent market doesn’t mean you need to save 10 to 20 percent for your down payment,” says Hosta-Stickney. Financing will vary based on credit scores and the type of loan package you’re seeking.
If you’re moving from an apartment to a home for the first time, don’t forget you’ll need to plan funds for things like a lawnmower, rake, snow shovel and garbage cans. Home ownership is different from renting, so prepare yourself.
The best time to buy is when you’re ready. Realtors work 12 months out of the year. Houses are always selling, it’s not true that you have to wait for spring. But if you’re planning to be in a certain school district by the end of August, you need to start putting your puzzle together in February.
Go out and experience this market for yourself. Go to open houses, get information on realtor.com, read the real estate listings in the paper, and start doing some research. But the best way to really get the details is with your local real estate agent. “Real estate is local,” says Hosta-Stickney. “Get to know a local realtor, and tell them what you’re looking for. We are here to serve the community, and we would be happy to share information with you.”
Many first-time homebuyers are Generation Xers who want to move in, store their stuff and go out and live. If you don’t mind putting in a little work, you can get a great deal on a home that needs updating — homes that might be off the radar of other GenXers. Sharp-Gates explains: “If you can look past décor to see potential — and especially if you’re handy about doing home projects — you can get a great deal on a home, put a little sweat equity into it and have the home of your dreams for less.”
Don’t be afraid of having your credit checked. It’s usually painless — most bumps and blips can be worked out with a little time and expert help.
Be sure the agent you choose is in good standing with his or her local real estate board.
Be sure to ask your agent/real estate company if they charge a processing fee. Some do and some don’t, so be a smart consumer and find out up front. Surprises are fun for birthdays, not for real estate transactions.
Check with the community to which you want to move to find out if they offer homebuying incentives. These case-by-case, city-run incentives can include down-payment assistance and grant money for rehab projects. The financial assistance can make a difference in affordability and might help you make a decision about where to buy.
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
First-time Homebuyer Tax Credit Feature, H.R. 3221