HGTV has been running their popular “My First Place” show and have been focusing on the “Lessons Learned” that these new homeowners learned when they were buying their first place.  I work with many first time homebuyers and have stayed in contact with many of them over the years.  So, in celebration of this series on HGTV, I would like to offer my list of “Lessons Learned”.

(1)      Get Your Financing In Order & Understand The Type of Loan You Are Getting:  Even in this tight mortgage market, first time homebuyers are still getting financing.  In the Richmond VA area, there are a number of options still available for many first time homebuyers:  VA, FHA, VHDA, Conventional and there are even grant programs out there that can be used in conjunction with the various financing options.  You should definitely talk to your lender to get pre-approved/qualified; however, once you are pre-approved/qualified, you should also have a good understanding of the type of loan program that you will be going for.  The type of loan you are getting will impact the type of property you may or may not be able to buy – certain foreclosures may not qualify for government loans due to their condition and this may mean you may have to go with a different loan product which has different down payment requirements and other conditions that you may or may not want to comply with.

(2)     Make a Realistic Offer on the House You are Trying to Buy:  When you finally do find a house that you want to make an offer on, don’t automatically assume that the seller will jump at your offer, no matter how realistic or unrealistic it is.  Keep in mind that there are a lot of buyers out in the marketplace right now, especially those first time homebuyers who are trying to close on a house by November 30 in order to get the $8,000 tax credit!  There are properties that are priced very, very well to sell and may go into multiple offers!  And you may have properties out there that are priced at market value.  You want the seller to negotiate in good faith with you, so don’t insult the seller by offering them a price that is 25% under their asking price (unless, of course, the house is priced so far out of the market range!)!  Remember, there is the fine line between hard negotiating with the seller & insulting the seller!  If this is a house that you feel like is the house for you, then you should decide whether or not you want to do such a low ball offer to them that they will not negotiate in good faith with you or even not negotiate with you at all!!!

(3)     Get a Home Inspection:  Back in the days of the hot sellers market, where it was not unusual for a home to get a number of multiple offers, many buyers were waiving the home inspection contingency.  In today’s real estate market, you have the right to do inspections & most buyers are getting them done.  But you should make sure when you are doing your home inspections, that you leave enough time to do any additional inspections that may be needed above and beyond the general whole house inspection.  These may include things like a fireplace inspection, underground oil tanks, radon, roof, HVAC.  If the seller will not pay for any needed repairs found during the inspection, you need to decide if the cost of the house plus the cost of any improvements and upgrades along with the cost of repairs that the seller will not do is at or below your target price point! 

(4)     Know What Is and Isn’t Allowed By The Association:  If the home falls into a neighborhood that has an association, Virginia law says that the seller must provide a copy of the disclosure package to the buyer and then they have 3 days to review the package and decide if they wish to move forward with the transaction!  If you have particular needs – for instance, the property has lots of trees in the backyard and you want to cut down any of them, make sure you know what the association rules & regulations are regarding this! 

(5)     Keep Resale In Mnd:  Although you may say that this is your home for life and you will never be moving again, there is no guarantee that your family’s situation will not change down the line and therefore, at some point in the future, you will probably be selling your home.  Even if the noise from I-95 does not bother you, it may bother a future buyer of your home!  So keep in mind, that, if you do decide to buy that home that backs to I-95, when the time comes to sell your home, your price may need to be well under the value of the rest of your neighborhood in order to sell it.  Or, worse, you may have fewer buyers wanting to look at your home when you go to sell it!

(6)     Make Sure You Like Your Neighborhood:  In the hot sellers market, if a buyer found a house that they liked, they generally had to make an offer that day or risk losing the home!  In today’s market, many buyers are taking the time to decide whether or not this is an area/neighborhood that they want to live in for the next 5 or so years!  With technology that is out there today, you can have your Realtor set you up with a link into MLS that will show you homes that match what you are looking for in a home.  Take the time to drive by the homes you like on paper & then drive through the neighborhood to see if it is a neighborhood that you can see yourself living in for the next 5 or so years!  Talk to the neighbors to see what they think of their neighborhood!

(7)     Make Sure You Are Comfortable With The Monthly Payment:  Hopefully, when you do find the home that you want to make an offer on, your Realtor will prepare a Comparative Market Analysis (CMA) to show you how well the house is or isn’t priced!  But, at the end of the day, even if the house is priced fairly, if the payment is more than you want to pay each month, then maybe this house may not be for you.   As I tell all of my buyers, you need to be okay with the monthly payment, because, unlike an apartment, once you have closed on your home, the home is yours-you can’t give notice & move!  You will be writing that check out each month!

(8)     Make Sure You Are Comfortable With The Homebuying Process:  For a first time homebuyer, the process may seem overwhelming and a bit scary!  Never having bought a home before, you may be unsure of what the next steps are!  I can assure you – there is a method to the madness when it comes to buying a home!  But if you have questions, you should always, always, ask your Realtor any questions you may have!  You should understand the process – and not be afraid to ask whatever questions you may have!

(9)     Don’t Eliminate a Home Based on How It Shows:  In this market, sometimes there are some great buys out there that don’t show well.  The home may be a foreclosure & therefore has stained carpet or walls that need painting!  Perhaps the home is an estate sale and the furnishings that are in the home may be very dated!  Perhaps the home has dated kitchen & bath, or needs new paint & carpet!  Sometimes the homeowner just doesn’t have great taste in furnishings!  Sometimes a home is a great deal and all that is needed is some cosmetic updating to make it a great home!  So try to look beyond some of the cosmetic challenges of a home, because once the furnishings are out of the house, or you recarpet & repaint and put in some new appliances, the home could be a great home!

(10) Relax – and enjoy!  Hopefully, you have a great Realtor and a great Lender and a great support team behind you to help you through the process!  Before you know it, you will be signing the papers at closing and getting your key to your new home!  Remember, you will have a team of professionals behind you guiding you through the process!  So relax and enjoy and you will end up with a home you will love for years to come!

 If you have recently purchased your first home, and have some "lessons learned" in the process, or any questions, feel free to email me! 

Barbara