Home Buyers How-To: First Time Buyer Worries
by Bob Hendrickson, REALTOR RE/MAX Tradition Realty
The most important thing to understand is that this type of nervousness is caused by a lack of sufficient information. It is human nature to worry about the unknown. Therefore, the best prescription for this type of mental anxiety is to learn as much as you can about the important topics surrounding home ownership.
Probably most people's biggest worry is whether or not they can afford a home. In reality, this is not that much of a concern. Here's why. Your home loan lender will make sure that you don't spend any more than about one third of your gross income on your home loan payment. After all, they don't want you to get into financial difficulties and not be able to repay the loan. Any competent real estate agent or home loan representative can calculate for you how much of a monthly payment you can afford. This figure easily translates into a purchase price figure that you can use when shopping for a home to purchase.
The second most common worry is whether the buyer will be qualified for a home loan. It is best to get this question out of the way, before you begin looking for a home. The financial qualifications you will need are basically these: steady income, good credit, cash in the bank.
By meeting with a home loan representative BEFORE you shop, you can have all of these questions and worries taken care of up front. The process by which you accomplish this is called "prequalification."
Another significant worry is about price. Am I paying too much for the house? If you are getting a home loan in order to buy, the lender will require an appraisal of value of the property to make sure the value is what the seller says it is. If it isn't, and you are in danger of paying too much, they won't make the loan. This protects both you and the lender. (If you are paying all cash, get an appraisal on your own.) The only other question about price is what could you have purchased the home for? This answer is achieved by GOOD negotiation, preferably through a Realtor who will protect your interests. By the way, not every Realtor does this, you have to ask!
First time homebuyers often worry if they are purchasing the "right house." The best test of this is to ask yourself the following question; If I needed to sell this home in 3 years, what would I get for the home? If the answer is not tolerable, it may not be the right home. Your Realtor is your best guide in determining this. If you have chosen the right one, they will be able to answer this question truthfully and with confidence. You should ask this advisor early on what makes a "bad investment" in your area. Specifically ask about exterior features, number of bedrooms, lot type and size, the need for a basement, fireplace, or other highly sought after features. You don't want to purchase a "white elephant" and suffer with a poor sale later on because you didn't realize that what you bought no one else wanted.
The key to solving all of these problems is to have good advice. Neighbors, friends, and co-workers will all be more than willing to offer this but your best source is someone who is in the business of helping people with these types of questions every day. Your Realtor is your best source.
Happy house hunting!
Bob Hendrickson is a licensed real estate agent with RE/MAX Tradition in the Annapolis area. He has been in the real estate business since 1981 and is a real estate buyers' consumer advocate who helps people find and purchase homes all over the United States and Canada. Please send your questions to Bob at KernelBob@yahoo.com.
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