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10 Mistakes First Time Buyers Make

And How To Avoid Them!

By Brian Sklute

1.       Not getting pre-approved first.  It’s important to speak with a local lender before shopping for your first home so you have a clear picture of what you can afford and also what your payments will be.2.       Calling the real estate agent listed on the For Sale sign.  The agent on the sign is the listing agent and he/she works for the seller.  Their job is to sell the house at the highest price possible.  You should consider finding a buyer’s agent to represent YOU.  Their job is to get you the house for as little as possible (or negotiate some other favorable terms for you, like getting all repairs done or having the seller pay all of the closing costs).  The buyer’s agent fee is generally paid by the seller.3.       Working directly with the site agent at a new construction site.  Again, that site agent works for the seller, the builder, not you.  Get your own representation.4.       Skipping the home inspection to save a few dollars.  While the buyer is responsible for paying for the home inspection at the time of the inspection  (~$200-350 depending on the size of the home), deficiencies brought to your attention during the home inspection which are documented on the report can then be requested to be repaired by the seller.  Oftentimes the seller will agree to make hundreds or even thousands of dollars in necessary repairs.5.       Making a lowball offer on every house.  Your buyer’s agent can assist you in determining if the house is overpriced, competitively priced or bargain priced.  Making a lowball offer on a well-priced home (and asking for all closing costs to be paid as well) will likely result in a rejected offer and possibly a missed opportunity for that perfect home.6.       Opting out of purchasing owner’s title insurance.  Again, trying to save a few dollars could result in having to pay thousands in court costs or possibly losing your home if title problems surface after you purchase the home.  Owner’s title insurance is only paid once and protects you while you live in that home and even after you move.7.       Wanting to see EVERY house on the market, even those that don’t really meets your criteria.  Spend some time creating Must Have,  Don’t Want and Like to Have lists.  If you find THE house of your dreams, you should act on it or risk losing out on that home.   Taking a “wait and see what else comes along” approach may result in losing the right house for you.8.       Not asking your agent, lender, home inspector, etc. questions.  This is likely your largest purchase to date so you want to be sure that you understand the entire home buying process.  Ask before you sign the initial paperwork and continue to ask questions throughout the entire process.9.       Not looking past the paint colors, carpet colors or seller’s lack of housekeeping and decorating ability.  When considering a home, look past the things that are relatively easy to change, such as paint and carpet colors and existing furnishings (that won’t be there when you move in).  Look at things you can’t easily change, like location and floor plan.10.   Not visiting www.thesavvyfirsttimebuyer.com regularly for more tips and information.

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Should I Get a Home Inspection?

What Should It Include?

By Denise Fleischmann

A home inspection is an invaluable tool in helping the first time homebuyer to make the decision as to whether to complete the purchase of  a home. For a small fee, usually paid at the time of the inspection, the homebuyer will learn about the home’s condition, what repairs may be necessary, and what maintenance may be required in the future. A home inspection is a visual examination of the physical structure and systems of a house, from the roof to the foundation. The purchase of a home is one of the biggest investments you will make in your lifetime and a home inspection costs only a small fee in comparison. A home inspection helps ensure homebuyers of the quality of their investment by making them aware of its condition and alerting them to any concerns before they complete the purchase of their home. A home inspection gives the buyer the opportunity to opt out of the purchase of the home, to ask the repairs be completed before the purchase of the home, or ask for credit off the agreed upon price to enable the repairs to be made.First time homebuyers should always make their purchase of a new home contingent on a home inspection.  A home inspection provides peace of mind and a greater understanding of their investment.What does a home inspection include? According to The American Society of Home Inspectors (ASHI), the standard home inspector’s report will cover the condition of the home’s heating system; central air conditioning system (temperature permitting); interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement and structural components.  They publish a Standards of Practice and Code of Ethics that outlines what you should expect to be covered in your home inspection report.   ...

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How to Choose the Right Property

By Barbara Randall

Whether you are a first time home buyer looking for a starter home in Newport News, or a veteran searching for the perfect retirement home in Williamsburg, the same rules apply. The rule of three (Golden Rule) is that you need to have the right balance between affordability, availability and suitability. Selecting the right home will require you to put in prospective your wants and needs. It’s rare that the perfect home comes along at the right time, however; you can look for a home that is practical, attractive and fits within your budget. Here are some steps on how to choose the right property.Affordability – Before attempting to obtain a home mortgage loan, borrowers should first understand exactly where they stand by pulling their credit report from all three credit reporting agencies and finding out their credit scores. The next important step in calculating loan eligibility would be the ratio between the amount being borrowed and value of the property being placed as collateral. Money needed exceeding the mortgage usually comes from a cash down payment. Debt to income ratios can be calculated by adding together all of the borrower’s debt payments, including not only the loan being applied for but also any auto loans, consumer debt, credit cards, etc: divide this number by net cash available each month available to the borrower for living expenses as well as debt. Most lenders would prefer this ratio to be approximately 40% or less. With all of this data gathered you should be able to determine approximately how much of a home you can afford.Availability – Now that you have figured out what you can afford and keeping in mind any costs you may incur for improving the property and assuming you know the general area where you want to live. Depending on your family status (kids of school age or empty nesters, married, single, young, middle-ages, nearing or past retirement age) you may want to factor in the quality and cost of the schools, the taxes, entertainment, cultural events or lack of, and so forth. It will be very likely that you will have to compromise on some of your wants and needs so be prepared to be flexible. Suitability – Once you have truly defined your ideal home and possible locations, you are ready to contact a Realtor. Let your Realtor know what you are looking for in your new home, and he or she will be able to search a Multiple Listing Service database and generate a list of homes that fit your criteria. Thin out possible homes to maybe half a dozen or so, and schedule appointments to see those properties. If more than one person is going to be involved in the home buying process, make sure that all parties are present for the showings. Gather all the information you can from your agent about each property before you visit it (property description, disclosure statements, deed information if available – and make sure to read it all). Always follow the motto ‘caveat emptor’ – buyer beware. Ask why the seller is moving? What’s wrong with the area? Bring a checklist of wants and needs and use the process of elimination after viewing two or more properties. You may not be able to accomplish this entirely, but even if you cut the choices in half using a systematic approach, you’ll be closer to your goal. It is important to remember that some things can be repaired or redesigned and some cannot, so make sure this home will function for you the way you would like it to. It is important to go for practicality and function and location, location, location. You can improve the property but you can’t move it. Consider not just the appeal of the neighborhood, but how it may change in the future. The price could very well be affected by new development, retail shops, and more other factors; which could affect your resale value.You may find that choosing the right property is a complex process, but the reward in the end is wonderful! ...

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