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7 "how to" survival tips for home buying!

Chris Mullins' Above & Beyond™, LLC interviews Sandy Orton, Realtor for Masiello Real Estate office in Peterborough, NH. I asked Sandy what advice she'd give to first time homebuyers.

MULLINS: What advice do you have for first time homebuyers?

SANDY: I'd give the same advice to anyone contemplating buying a home whether they be couples or single. Below is a list:

1. What are your long range plans? Will these plans effect the type and price of the house you're looking for? Is this purchase temporary long term? Be sure to work your personal plans into the mix, before you think about buying.

2. What are you looking for in a home? Sandy asks her clients to give her their "wish list" i.e. 3 bedrooms, 2 baths, fireplace, water or mountain view. You might get exactly what you're looking for, most of what you're looking for or strike out totally. Make notes about each home you look at, make a plus or minus list and see how that stacks up against your wish list.

3. Is there anyone else involved in the decision to purchase the home? You may have friends or family members that are part of your buying process, even if it's just to bounce ideas off them. Perhaps you have a grandparent or a friend who is offering financial assistance. You may even be purchasing the home with a relative or friend or perhaps they're not sharing in the financial aspects, but they should be part of the buying process. You need to include all of those folks that might be considered influential, even for "in-law apartments", etc.

4. Think about your lifestyle, kids, business, schooling or medical factors. Be sure you consider all of these. Don't forget allergies, size of yard, carpeting, hardwood floors, type of heating, no hot air heat, electric heat of oil heat. What type of community do you want to live in? What king of neighbors do you want? How far away do you want to be from other homes, shopping, hospitals and schools? What about pets… do you want any, do you want to live near any?

5. Before you start house hunting it's important to know that it's a sellers' market. Talk to a mortgage originator before you start to look, get preapproved for a mortgage. This is important because sellers have many buyers interested in the same home, if you're not prequalified or preapproved the seller will go to someone who is. Get your credit report checked, clear up any mistakes. Go to the bank first. Find out exactly what you're qualified for. After you're prequalified, use the internet, it's an excellent way to do your homework. Here's how you can use the internet to your advantage; technology is a big boom to buyers. It can help you narrow your search and give you a good sense of what your money will buy. Visit sites like… http://www.masiello.com and http://www.realtor.com. When you use the internet check out the listings, prices, price range; since you're already prequalified you're not wasting time, you're more in control, you can speak with more confidence because you have more knowledge. The internet offers "virtual" tours inside and outside homes; mini movies.

6. Find a realtor you're comfortable with. The "right" realtor would be the one that works hard to find you the right property. Be careful of the realtors that have so many people to work with that they're not able to keep an eye out for you. Feeling comfortable with them, trusting them and being confident that the advice they'll give is good and essential. It's also a good idea to work with two or three realtors.

7. Negotiating is an important communication skill when purchasing a home. Not just negotiating with the seller, but also with the person you're buying the home with. Slow down, think first, be prepared, it's critical you know exactly what your top price is so that you won't have any "bidding wars". Know what you're comfortable with and don't go beyond that. Price is not the most important element, sometimes terms are more important, earlier closing date, larger down payment or perhaps the property needs work and you're willing to buy it "as is". Instead of the seller trying to get all the work done suggest the seller simply pays for you to have the work done or lowers the asking price of the home. This will decrease the sellers stress level, which is a great opportunity for you; you end up with a better deal. So the trick to keeping your relationship together and getting the best deal is remaining calm and communicating.

MULLINS: Thanks, Sandy that's great advice. Two final questions before I let you go. How much time is involved in buying a home?

SANDY: From the offer stand point to the seller, it could be several days to come to a "meeting of the minds", buyers and sellers agreeing on the price and all the terms. Two to three weeks to get your home inspection. For a mortgage, the whole process usually takes three to six weeks. Then you're ready to close, you have financing and a satisfactory inspection. A closing date could be six to eight weeks out. Then it's time to meet with the banker and gather all the documents.

MULLINS: What does Buyers' Agent mean?

SANDY: Here's an easy way to look at it. A customer (buyer) is without representation. A client (seller) is fully represented. The idea is to hire a Buyer's Broker to give you, the buyer, professional advice, do all or some of the leg work. Your Buyer's Broker is there for YOU and only YOU. They'll work in your best interest, to get the best terms and price for you. They're loyal to you and on your side. Buyer's Brokers can definitely lighten the load of this seemingly full time job, explain things to you in more detail. They also excel during negotiations. They know the market, what houses costs, they know about hazardous waste, everything. They've become more popular now than 3 years ago. Remember, sellers are ALWAYS represented; now it's the buyers' turn.

MULLINS: Thanks again, Sandy. The big "survival lesson" here is to remember you're buying for now and the future. When you go through your "wish list" think about now and beyond. Do your homework and keep all influential parties involved. Have fun!

If you would like to contact Sandy Orton, Realtor for Masiello Real Estate, New Hampshire call 603.924.8373 ext. 206 or you can email her at sorton@masiello.com

Chris Mullins is president of Above & Beyond™, LLC and Mullins Media Group™. For more information on our products and services go to http://www.abovebeyond.net

©All Rights Reserved Chris Mullins' Above & Beyond™, LLC; Mullins Media Group™


Loan-Speak: A Glossary of Terms

Source: Plan ahead. Get ahead. Magazine, by the Principal Financial Group

Before you talk to Realtors and lenders, learn their lingo. Here are 10 terms every first-time homebuyer should know:

1. Adjustable-rate mortgage. ARM for short. Interest rates start out lower than a fixed-rate mortgage but rise and fall with interest rates over the life of the loan. Can save money if you expect to move in a couple of years.

2. Appraisal. The lender's calculation of your house's value - just in case the lender has to take the house back. It should be larger than the amount of your loan.

3. Closing Costs. Total cash due the day you buy the house. Includes your down payment, along with insurance, commissions, fees and taxes.

4. Comps. Recent selling prices of comparable homes in the neighborhood.

5. Contingency. Clause that lets you cancel a contract if a loan falls through or an inspection reveals costly damage.

6. Earnest money. The deposit you pay when you sign a purchase contract. Goes toward your down payment and shows you're serious.

7. Equity. How much of your house you actually own. Usually, the difference between its appraised value and what you still owe on the loan. Starts with your down payment and builds from there.

8. Escrow account. An extra part of your monthly payment your lender holds for taxes and insurance.

9. Fixed-rate Mortgage. The classic mortgage - your interest rate is locked in for the 15-, 20- or 30-year life of the loan. Best if you plan to stick around.

10. Points. One point is 1% of the loan amount. You can cut your interest rate by paying your lender extra points at closing. Cheaper if you plan to stay at least five years.