Your Vail Valley Real Estate Resource
Service – Experience – Commitment – Results
COLDWELL BANKER OFFERS A “DO AND DON’T” LIST
FOR FIRST-TIME HOMEBUYERS
According to the National Association of REALTORS, 34% of all home buyers in 2017 were first-time buyers. For most people, buying a home is the most significant investment of their lives. It is also the easiest and best way to build your wealth. After you make the decision to buy, the next question is, where do I begin? Coldwell Banker Real Estate LLC has come up with a simple “do and don’t” list to make the process easier for everyone dreaming of homeownership.
- DO line up your “all-star” team of professionals before game day. A team of experienced professionals will be key to making the home buying process simple and seamless. Start by interviewing and selecting a sales associate who you “connect” with. That sales associate should also be able to help you indentify suitable lawyers, mortgage lenders, home inspectors and others who play a role in the process.
- DO explore your options. Shop around with several Lenders to find the right program and rate for you.
- DO know your numbers and get prequalified. There are three things that your Lender will want to talk about to determine what you can afford. Getting prequalified only takes 15-20 minutes.
- Credit – Pull your credit score from www.AnnualCreditReport.com and understand what goes into it. About 35% of your credit score is based on whether or not you pay your bills on time, and about 30% is based on how much.
- Income – Make sure you have a good job history and have had a stable income for the past two years.
- Assets – You don’t necessarily have to put 20% down, but it is a good idea to have some savings go towards out of pocket costs and expenses, even for low or no down payment programs.
- DO know your timeline. If you are confident in your credit and assets, start talking to a Lender within 3-4 months of knowing that you are ready to purchase. However, if you think there could be an issue, start the process earlier to give yourself time to put away additional savings or repair your credit.
- DO anticipate your future needs and buy for lifestyle. Try to anticipate how long you’ll live in your next home and plan for major lifestyle changes when possible. What may make a perfect starter home for a couple might not work as well when children come into the picture. Remember, people move for lifestyle reasons and your first home will likely not be your last.
- DO hone in on your housing priorities. Your ideal home may have a porch, a pool and five full baths. But before you start looking, make sure to separate your “must-haves” from your “nice to haves,” so you know where you can compromise to meet your budget.
- DON’T believe all of the home buying myths. You don’t have to have perfect credit or 20% to put down to purchase a home.
- DON’T only think about your monthly payment. It can be exciting to find out that your mortgage payment could be significantly less than what you are paying in rent, but remember that there are other costs involved in owning a home that you will need to prepare for, such as taxes, insurance, repairs and maintenance.
- DON’T go with a Lender that you don’t trust. Just like when you choose a Real Estate Agent to work with, your Lender should be someone that you feel comfortable with. You will want to choose someone who will be there for you as an advisor and advocate.
- DON’T fall in love with the first house or neighborhood you see. That grand colonial with the picturesque view may win your heart at first glance, but don’t fall in love too fast. You need to keep an open mind to make sure you find the right fit for all your needs. At the end of your search, it may turn out that the riverfront ranch that’s closer for your commute is a better bet all-around.
- DON’T buy beyond what you can afford. It’s easy to fall into that all-you-can-eat attitude when it comes to your first home purchase. You “want it all” when it comes to size, amenities, location, etc. But remember that your eyes may have a larger appetite than your wallet. Make sure that the down payment, closing costs, monthly expenses and taxes are truly within your income and savings range before you sign on the dotted line.
- DON’T treat your home the way you treat your stock portfolio. It’s unrealistic and unwise to expect your housing investment to appreciate as quickly as you’d hope for your high-risk bonds. Buying for lifestyle, as opposed to trying to turn a quick profit, will help ensure that you are viewing home purchasing and ownership in the right context.
- DON’T try to time the market. By the time most consumers sense a major real estate or financial market shift, the tables have typically already turned. Instead of waiting for a slim and unreliable window of time – and potentially missing out on the perfect home – buyers should focus on their own lifestyles and buy when the time is truly right for them.
While buying a home is a complicated process, don’t let that intimidate you! Partner with a professional Real Estate Agent and Lender to make the process stress-free. Ultimately, buying a home should be fun and exciting!