San Diego First Time Home Buyers: Getting Started!!!
Posted by Gretchen Pagnotta | Visited 92 times, 1 so far today | Leave A Comment »
First time home buyers are purchasing in record numbers in San Diego. The combination of low interest rates, great loan programs and tax credits (www.federalhousingtaxcredit.com) have propelled the market in the past year. In many cases purchasing home is less expensive than renting the same property. How you may ask does one get started with the process?
First, please do not assume that you can or cannot purchase a home. You need to get some good advice to make any decisions. Step #1 is to talk with a lender. You may elect to use your credit union, bank or a lender that either a real estate agent or a friend has recommended. You are not obligated to go with this person if you speak with them. You will need to provide this person with basic information; your income, debts including credit card balances, car loan, alimony and any other outstanding loans you are obligated to pay off.
The lender will run a credit check to determine what is called a FICA score. You may elect to do this yourself on line. It is free and available at www.freecreditreprt.com. The FICA score is critical as it sets a standard that lending institutions use to determine if your credit history is strong enough to make them feel comfortable in loaning you money. Many times people who do not use credit and pay cash or use debit cards have low FICA scores and the lender will make suggestions as to how you can improve these scores. Obvious things such as late payments or outstanding unpaid debts will produce a score that may be lower than what the lender requires. The lender will discuss the price of a home, loan amount and down payment you will need . You will receive a “Preapproval Letter” outlining this information which will allow you to proceed to Step 2!
Step 2 is finding a good real estate agent. This is critical as you are placing a huge decision in the hands of someone and you want to know that person is ethical, experienced, trustworthy and has the time and patience to open the doors to your first home. I suggest searching the web for an agent active in the area you are looking. Simply do a quick Google search in “any town real estate” Go to at least 5 agent web sites and do a thorough review of the content including their biography and any testimonials posted. If you like what you read then give them a call. I receive 70% of my business off the web and most of my clients say “you looked so friendly.” I am friendly and also am very knowledgably, patient and an very experienced agent! Agents are happy to talk with you on the phone or chat on an email..if the vibes are good commit to meeting them which brings us to Step 3.
When you meet with an agent realize that the more information you can share with them, the easier it will be for you to find a home that suits your needs. Be prepared! Outline your basic requirements, likes and areas you will consider. As a first time buyer the most important lesson to understand is COMPROMISE. If the meeting goes well and you feel you “connect” with the agent pledge your loyalty to them. Real estate agents are paid by commission only. You may think every real estate agent makes a zillion dollars a year. It can be a difficult process in today’s market to get a first time buyer into a home. Recently I had an experience that outlines this challenge. I had a listing priced at $300,000..every first time buyers dream…clean, new paint, new carpet, a view to die for in a fabulous neighborhood. I had 3 offers immediately; 2 all cash and one from a first time buyer. The first time buyer was preapproved for a loan by a lender but my sellers elected to accept the offer from the all cash buyer. Why do sellers prefer all cash offers? All cash transactions can close quickly; 14 days or less vs. 30-45 days for a buyer obtaining financing and it is a sure thing. Even with preapproval the lender may not come through with an acceptable appraisal or final funding. This buyer has submitted 9 offers on different homes and has lost each home to other purchasers who are paying “all cash.” That means his agent has shown him countless homes (we know at least 9!), written 9 offers and still has not earned any payment for his services. Be loyal…and if asked to sign a Buyer Broker Agreement that pledges your loyalty as well as due diligence on the part of your agent…sign it! You will be #1 priority for the agent. 
Now you are headed for Step 4…viewing homes. Please bring a digital camera, notebook, your significant other, water, shoes you can easily remove and an open mind. If you are including your children in the search make sure you have discussed this with your agent and plan to drive your own car and follow your agent. Most of the time children are pretty bored with the process of looking at homes so it is best to make other arrangements if possible. You are on your way! After each viewing make notes on the home focusing on your requirements and on your initial reaction to the property. The most important element is location so keep that at the top of your list…and remember the COMPROMISE part of the process. Good luck! You are on your way!
Watch for my future First Time Buyer Blogs:
Why should I purchase a home?
How do I determine value?
Can I get a better “deal” calling the Listing Agent?
