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12 Things I Learned Working with Buyers
The thought of buying a house, whether it's your first or your third, can be daunting. It's probably the largest investment you'll ever make. For this reason, it's best to be prepared for the journey. Here are some things I've learned when working with buyers. Hope this list helps and prepares you for your home buying experience.
Your credit doesn't have to be perfect!
The average credit score for an FHA loan was 675! If you have bad credit, remember, it can be fixed. You just have to know the right people to contact to show you what you need to do to bring it up. They can help you raise your score by showing you what should be paid off/down and other ways to
bring up that score! It’s not always smart to just pay everything off.
You don't need a 20% down payment!
There are several types of loans you can apply for. Some offer low or zero down payments! There are also state programs that provide down payment assistance. You don't know what you can qualify for until you talk to a lender. Which brings me to #3.
Don't start your home search without knowing what you can afford!
Talk to a lender to get pre-approved for a mortgage. The lender will ask you some questions to determine your affordability. Sometimes, you may be disappointed in what you thought you could afford and what you actually can afford! Don't be discouraged. A good lender will be able to help you get to where you need to be financially.
Your first home probably won't be your dream home
There's a reason why they're called "Starter Homes." You can't afford the house you want, so find something you can live in for a few years until you build your equity to be able to buy your dream house! Investing in real estate is one of the most profitable investment you can make. So buy your starter home now and move up when you can. At least you won't be throwing money away on rent. Experts reported that 88% of landlords raised their rents in the last 12 months!
Determine your wants and needs
Make a list of the things you absolutely need to have in a house. The things you can't live without. That may be a basement, a garage or, for some people, an in-ground pool. Your wants are things that would be nice to have but won't break the deal if the house doesn't have them. Needs are things that are absolute deal breakers if they aren’t in the house!
Have as many inspections on the home as you can. The standard home inspection checks to make sure things are in working order including the furnace, appliances, etc. They also check for safety issues, signs of mold, and other problems that may be present. However, there are other inspections that can be done. For example, mold and insect inspections, also if there’s a septic system or pool, those should be inspected as well. All of these inspections cost money so you’ll need extra cash to cover them. And speaking of extra cash…
How much cash you need to buy a house
You give the title company an Earnest Money Deposit (or good faith deposit) when you submit your offer. However, when closing day comes, make sure you have a couple extra thousand dollars to cover things that must be prepaid at closing. First of all, your closing costs. Then there are some things that must be prepaid including a year’s worth of property taxes, homeowners insurance, and a few other things. All of this can add up to a couple thousand or more. However, the seller can help you pay for some of these things, if we negotiate them within the deal.
No Lowball offers
There’s a time and place for everything. But lowballing that new listing $30K under asking price, the first day it’s on the market, will not only make you look like a real jerk, but you won’t be taken seriously! Imagine you’re having a garage sale and you have a decent snowblower for $200. A guy comes up and offers you $25. You’re going to tell them to get lost, right! The same thing is true with homes.
Buying a house is a HUGE deal and probably the largest investment you’ll ever make so make sure you understand every aspect of the transaction. Don’t wait until you’re at the closing table to speak up! If you don’t get it – ASK!
Every home buying experience is different
Just because your coworker had an awful experience buying a house, doesn’t mean you will. It’s about teamwork. If you have a good agent, lender, inspector, etc., they can make your home buying experience a dream come true or a total nightmare! Interview Buyer’s Agents and don’t sign anything unless you’re comfortable with the agent. Most good agents also have a team they work with. They can recommend lenders, inspectors and any other professional that you may need.
Why do you need a Buyer’s Agent?
First of all, a Buyer’s Agent doesn’t cost you a penny! In Real Estate, the Seller pays the commission for both agents! That being said, when you do decide to work with a Buyer’s Agent, pick one. Some buyers think that they have to use the agent that has the house listed so when they request a showing, they call the agent that has the house listed. But that agent works for the Seller. They won’t have your best interest in mind. That’s why you should hire your own agent that will work for you.
Buying a house may not be for you…
…And that’s ok. Just because your friends, family and coworkers own homes, your money may be better spent elsewhere. The important thing is that you know what it takes to buy a house.
First-Time Home Buyers!
Home Ownership is No Longer Just a Dream
If you are a first-time home buyer, there are programs to help you buy your first home. In addition, if you haven't owned a home in the past three years, you qualify for this program too!
The State of Michigan will offer a maximum of $7,500 toward your downpayment. (A minimum credit score of 640 is required).
MI Next Home Down Payment Assistance
Repeat buyers may also qualify for mortgage assistance. If you are repeat buyer, the State of Michigan may offer a maximum of whichever is the lesser of $7,500 or 4% of the sales price. This program is available to repeat homebuyers statewide. A minimum credit score of 660 is required.
If you would like more information, contact me! I have some great lenders that I work with, that can help you determine which program is best for you!
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