Newsletter - Tips For The First-Time Home Buyer

1. Short sales that have not been pre-approved generally take much longer than foreclosures or standard sales to close.
2. You should look at many houses before choosing one.  So don’t feel bad if you haven’t found the right one yet. 
3. In the case of foreclosures, looking at over 30 homes before deciding is not excessive.
4. When looking at a potential house, look in the basement first, see how old the water heater and furnace are, and if there’s any rust.
5. Check for mold along the edges in the basement.
6. Check for water damage along the walls of the basement, it may be as simple as making sure the gutters flow down further away from the house.
7. Before deciding against the house, make sure it’s because of large factors and not cosmetic issues such as the wall being dirty.
8. Remember, if you find a house that’s structurally sound, but needs improvement – a FHA 203k loan can give you up to $30,000 for repairs on the home, making it great for investment property to turn around in a few years.
9.  If you find a house with a damaged pool, remember this depreciates the house by around $10,000.  Taking an above ground pool out will require quite a bit of dirt to fill it in if they buried it a couple feet in — which may cost you thousands in loads of dirt.
10. Don’t be turned off by paint colors – this is such an easy fix that it shouldn’t deter you from a great bargain.
11.  If you’re looking at investment properties, always think about cheap ways to improve curb appeal, such as building a porch or deck.
12. Mentally compare the square footage between homes you’ve already seen.  Seems too small?  Think about the size after you add furniture and a dog.
13. Don’t shy away from homes that are not in move-in condition.  If a few weekends of work will increase the value by $20k – it might just be worth the work.
14. Compare homes in terms of how much you’re paying per square foot in homes that have similar features; your realtor will give you the comparables before bidding.
15. Don’t place all damages on the same comparison level, for example a broken tile is far less serious than a leaking roof.  
16. Be sure to weigh your options in terms of price to fix it, or how much the feature is worth.
17. Remember tubs can be re-glazed for relatively cheaply if one doesn’t fit your standards.
18. Look at the neighborhood to gauge the worth of the home, bad next door neighbors can depreciate the value of the neighborhood.
19. Try to choose an area with good schools – this will come in handy even if you don’t have kids in terms of reselling.
20. Get pre-approved first (not pre-qualified), so that when you’re ready to buy, the underwriting process is already underway.
21. Be flexible about your wants. Limiting your search to a set amount of features can prevent you from seeing other comparable properties.
22. Always check out the comparables for an idea of how much to bid.  Your realtor can hook you up with info about how much similar homes have sold for in that neighborhood in the past 6 months.
23. If you’re getting an FHA loan, keep in mind that the inspection is stringent, so water in the basement or cracks on the driveway may not pass inspection.
24. Keep in mind, just because you bid on it, doesn't mean you won it.
25. Realize that finding a home could take some time; it may take 2 weeks or more than a month.
26. Make a list of all possible locations you can live at.
27. Have your realtor print out profile sheets for all the homes you’re going to see that trip so you can make notes and keep track while you’re inside the home.
28. Look at the roof to make sure it was built properly and that it’s not caving in any way.
29. Check the cement sidewalks for cracks and hazardous areas.  Many inspectors will look for those issues.
30. Make sure your furnace and water heater are in an easily accessible area.  If previous owners built around that to finish the basement, you may be looking at the cost of knocking down a wall to get it out when the time comes to replace it.
31. Calculate how much home you can afford first.  Remember, your mortgage payment should be 25% of your income, so buying the most home now may make you financially stressed later.
32. If you don’t have at least 5% of your down payment saved up, look into FHA loans.
33. If you have low credit, look into FHA loans to help.
34. Do your research and go prepared with an idea of what things you’d be willing to fix and what you’d have to hire out, and also what repairs you want to avoid.
35. Have a good understanding of your finances, what you can afford, and how much the property tax is before viewing.
36. Don’t be blinded by a well painted house, try to envision the house as plain white on the inside to focus on structural flaws.
37. HUD loan foreclosures often take less time to find out if your bid won.  Your realtor has to bid for you through the HUD website for these homes.
38. Use a mortgage calculator to find out how much home you can afford.
39. Ask your banker for a Good Faith Estimate to have a solid idea of how much money to bring to closing.
40. Get multiple pre-approvals so you are ready to bid at multiple prices.
41. Look into what home improvements have the highest return on investment so you know which projects you want to take on.
42. If you tend to spend extra cash at the end of the month, consider having a shorter loan and making larger payments.