Saturday, April 19, 2008

Advice For First Time Home Buyers

Buying a home for the first time can often be an intimidating ordeal. Below is an excerpt from an article from Realty Times regarding the Dos and Don’ts of first time home buying. I strongly agree with two of the Dos: getting pre-approved for a loan & finding a dream team of professionals.

Getting pre-approved will allow your interest to be taken more seriously and you will get much better response from all parties involved. It will also help give you a better idea of what price-ranges you should be looking at.

Working with a quality real estate professional will also make your first home purchase much smoother. It is important to have somebody representing your interests in the transaction to ensure that you are getting the best deal possible.

SI Real Estate has done an excellent job of representing first time buyers in the Tampa Bay area. We know the market inside and out which allows us to make sure that our clients are getting the right property at the right price. I urge you to read through the following excerpt so that you can be better prepared for buying your first home. If you are looking to buy real estate in the Tampa Bay area, please give us a call and we can help you evaluate all of your options.

The Dos

DO browse for housing information. Begin your search by arming yourself with information. For example, Coldwell Banker's the Home Price Comparison Index allows you to compare average housing costs in over 400 U.S. markets. RealtyTimes Market Conditions gives you a snapshot of thousands of local markets.'s Home Buying/Selling section is chock full of the nitty gritty insight you'll need to get going. Stick with the known, long-time real estate information Web sites and you'll learn more than you need to know.

DO examine your credit standing. You need to know your credit standing. You may need to request corrections if there are errors. You may need to adjust your habits if your credit behavior is less than sterling. And you need to take those steps before seeking a loan. Your credit report is free from, the federally regulated place to go. You can stagger retrieval of your credit report from each of the big three credit bureaus, getting one from a different agency every four months. Your report is free, but you may have to pay a nominal fee for your credit score (a numerical scoring of your creditworthiness) depending upon your state law and other factors. Learn more about your score at Privacy Rights Clearing House.
DO explore a mortgage pre-approval or commitment. An early green light on a loan will put you in a good negotiation position when you find your dream home. It will also help you shop within your budget.

DO line up a dream team of professionals. You may need a real estate agent, attorney, mortgage broker, home inspector and others to be your professional eyes during your home search.

DO buy for your lifestyle. Your first home may not be your last, so try to anticipate how long you'll live in your home and buy based on plans for the duration. Raising kids, starting a business, taking on a new job, housing Grandma could all impact the size or type of home you need first.

DO heed housing priorities. Separate your "wants" from you "needs" so you know where you can compromise to stay on budget.

The Don'ts

DON'T get taken by the first house or neighborhood you see. Keep an open mind and spend sufficient time finding the right fit in a house and neighborhood for your needs.

DON'T buy more than you can afford. Lenders will often loan you as much as your financial condition warrants, but that may not be what you can comfortably afford. It's better to live with a comfortable mortgage on a smaller home than to struggle every month paying a mortgage on a house with more room than you really need. The down payment, closing costs, monthly expenses and taxes must in total all be within your income and savings range.

DON'T treat your home like a stock portfolio. Homes appreciate and depreciate in cycles which often aren't so predictable. Don't expect your home's value to skyrocket. Buy a home because you need a roof over your head, not for a quick profit.

DON'T try to time the market. Pinpointing the bottom of the market almost always happens after the market has started to turn up. How, otherwise, can you see the bottom? Focus on personal lifestyle needs, not market trends, in terms of timing your home buy.

DON'T sign for a confusing mortgage. Shop around for the best loan, read every detail of your loan contract and get some help understanding terms and provisions that confuse you. Avoid exotic, "creative financing," multi-option loans you don't understand. Again, lifestyle is key. Get a loan that fits.

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