February 20, 2019
Are you buying a home for the first time? Ever?
Well, then you’ve come to the right place because I’m going to give you 8 strategies to follow.
Hi everybody my name is Ty Eden. I’m with Exit Realty Redefined in Wheaton Illinois. I’ve been a licensed Realtor for about a year and half. However, I’ve been an investor for my whole life. So, I work with Buyers, Sellers and obviously Investors and I want to be able to bring you some value if you’re a first-time home buyer to know what the path is that you need to walk down in order to find a home, find a lender and find the realtor. All the steps that you need to do from beginning to end.
I’m going to give you eight points to follow in the process before you actually be able to buy your first home. Now this is the third of four segments that I’m giving to you and in this segment, we are going to talk a little bit about beefing up your down payment. It’s very important to have a nice sizable down payment even some cash reserves and then also the most important part is who is that professional that is going to help you with finding that property.
Now, point number 4: Beef up your down payment
You want to beef up your down payment. Why do you want to beef up your down payment? There’re all these no down payment loans or 3% FHA loans and all this. You want to have enough money set aside because there’s something called maintenance on the house that if you’re a renter, you’re not really paying for. The people that own that apartment, condo home that you’re currently living in – they are paying for the maintenance. Painting the inside and outside, cleaning the carpets after you’ve left. Fixing things that had got broken either because of you or not because of you but just broken items in the house, your busy calling the landlord – “hey you got to come fix this”.
But when you own your own property, you’re the one who’s going to be fixing that. Items going wrong with plumbing, electrical, you name it, it’s going to come out of left field. Maybe some kids are playing across the street and accidentally throw a ball through the window. You may have home insurance on the house, but most home insurance policies are going to have of what’s called a deductible. The deductible is what comes out of your pocket and what if the insurance company ends up not covering for that broken window? You’ve got to pay for it yourself.
Be financially able and ready to pay for something that is unexpected and the only way to do that is by having savings around. Don’t depend on credit cards because if you run those up and it does nothing but affect your credit score.
Now as I said a little bit earlier, there are loans out there: FHA loans which are very low money down. I think they are like 3%-3.5% down payment but then again you want to have ample money set aside. There are also for you veterans, VA loans that might even be able to pick up 100% of the loan, but again have some money set aside because that lending company, that bank, whoever going to buy the house on your behalf, they are not going to pay for all the maintenance that may have to take place in the time period that you live in the house.
Point number 5: Get a Realtor
You want to make sure that you’ve got a realtor helping you with this process. For properties closed with the assistance of a realtor both on the buyer side and the seller side. Now as a buyer, you probably never knew that you don’t have to pay the realtor’s cost. But you want to find a realtor that is going to negotiate in your best interests, that is going to be sensitive to your wants and needs, you want to make sure that you’ve got a realtor that represents you.
How do you go about finding a realtor? Find yourself 3-4 different realtors with different levels of experience and you want to ask them: do they work for themselves? Do they have a team? If so, what role does that realtor that you’re talking to, what role do they play in that team. Because what you want to do is you want to make sure that the person you initially sit down with is the person that is going to actually walk you through the whole process when you finally decided on a home.
Someone who is going to help you in writing up your offer, negotiating any counter offers and assisting you through the home inspection if your offer is accepted, help guide you to an attorney if necessary, explain to you the title insurance and all the different facets of what goes on with buying a house. You want to make sure that the realtor can help you through that whole process. You don’t want to get handed off from one to the next to the next because it is a relationship thing. You want to make sure your comfortable and you can communicate with the realtor.
It is a two-way conversation, not the realtor just talking to you. At the end this is a time consuming and complicated process that you might end up with something you really don’t want. As your sitting down at the closing table, you might end up going: “I’m not comfortable with this”. And after spending all that time, your effort and you got some earnest money down, you don’t want to end up with cold feet at the end of the process. So very important aspect: Make sure that you know who your realtor is. Know that you can work with the realtor, that the realtor is going to be there for you through the entire process and that you can communicate back and forth comfortably. Because it is all about you “the buyer” at the end of the day.
With that, I hope you found some value out of this short piece and stay tuned for our next piece next week. This is an 8-part series so I am giving you 8 points on: “If you’re buying your first house ever?”. I’m hoping that these 8 points can help guide you through the process that you need to go through to buy your home.
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