Marianne Leopold
Realtor®, Broker Associate, CRS, ABR
661 607 1818
661 251 0997
email: marianne_leopold@hotmail.com
website: MarianneLeopold.com
License: 01410038
The following article is good advice for all first time buyers.
Tips for First Time Home Buyers 
by Gary and Marilyn Jackson,
Coldwell Banker
As housing prices climbed steadily higher over the past couple of years, many first time home buyers--stunned by sticker shock--sat on the sidelines and waited for prices to come down, or at least level off. There is hope for first time home buyers. Now that the economy has started slowing and inventories of homes on the market are beginning to grow, residential real estate may move toward a buyers' market once again. So what should first time buyers know before they march out to see model homes?
Don't Make The Mistake of Waiting
Many potential buyers wait until they can afford their dream home. This is a mistake. If in 1999, for example, you made the conscious decision to save money rather than adjust your expectations and buy a $250,000 "starter" home, you would have missed out on the 40 to 50-percent appreciation we have witnessed in many markets in Northern California in the past couple of years. Had you purchased that home, you would have accumulated about $100,000 in equity--in addition to the tax savings on mortgage interest. Even though you may not be able to afford that spacious four bedroom, three bath home, you can purchase a home that will serve as a stepping stone toward your ultimate dream home.
Obtaining The Down Payment
The first step is to figure out how to come up with the down payment. If you haven't been able to save enough, you may want to start with family members to see if they are willing to gift you the funds. Some buyers choose to borrow on their 401K plans. You may also talk to your bank or professional mortgage advisor about first time home buyer programs. Some offer 0-3% down payment options with approved credit and even allow you to roll in closing costs so you can close without even writing a check.
Get In Touch With The Experts
Start your home search with experienced real estate professionals. Include banking and financial representatives who will assist you in getting the most for your money. Often, you can be pre-approved for a mortgage up to a certain amount before you begin house hunting. This allows you to know the amount of mortgage you can manage in advance. Additionally, when working with lenders, you should get a clear understanding of all out-of-pocket expenses which will be required to obtain your home loan. The lender should educate you on specific loan programs, including first-time home buyer benefits. Good real estate professionals who know neighborhoods can help you make an informed decision on appreciation, upgrades, and what areas you should put your money toward. You may also want to talk to a CPA to better understand the tax benefits of your mortgage and related real estate costs.
Dream Home vs. Reality
Once you know the mortgage amount you can afford, sit down and discuss everything you want in a dream home. Then decide how much of your dream is realistic. Share your goals and dreams with the professionals you are working with. It will help them direct you to the right home. As mentioned before, you should consider the purchase of your first home a stepping stone which will put you one step closer to the dream. You may even want to consider buying a townhouse or condominium over a single family home. Always search for a home with an eye on location over property. We advise first time buyers to buy the worst house in the best neighborhood. The same applies to new homes--the goal should be to get into a great neighborhood, even if it means buying a smaller home or adding fewer bells and whistles.
Understanding The Home Buying Process
The buying process is complicated and can be intimidating, especially for first time buyers. Real estate professionals can make it easier. We offer a buyer booklet, which provides a road map of the entire home buying process. Another tool we use to increase the comfort level for buyers is an estimated calendar of how long each aspect of the home buying process takes. From the time you sign the purchase agreement to the final walk through, you should have a clear idea of what will take place during your escrow period. Of course, as you go through the process, you will have plenty of questions. Be sure to write them down. This will ensure that all of your concerns are addressed and all of your questions are answered.
The Home Search
According to a Chicago Title and Trust survey, the average first time home buyer spends 2.3 years saving up for the down payment and looks at nearly a dozen homes over five months--not to mention browsing hundreds of homes on the Internet. Of course, these are national averages. Don't be concerned if you only look at two homes or if you need to see 50 before finding one that meets your needs. The bottom line is you are going to live in the house and you must be happy. So it's worth taking the time to make the right decision--one you'll be happy with for years to come.
The purchase of a home, especially your first, is one of the most important decisions you will make in your lifetime. Obviously, you'll want to collect as much information as you can. More importantly, you'll want to work with a team of experienced real estate professionals who can help you make the right decisions and move you one step closer to your dream home.