Tips for First-Time Buyers 

Buying a first home can be the single most important decision you have had to make up to this point in your life.  If the decision is not solely yours, the first step should be to reach agreement with your spouse, partner or co-buyer about your goals.

• Will your life style be best suited to a single family home?  Some housing subdivisions require membership in mandatory homeowner associations.  Will abiding by a set of community rules and regulations be right for you?

• Do you want to live in a planned community with amenities such as a community swimming pool, tennis courts, or clubhouse?  While there will be a monthly fee associated with membership in a homeowners association, it can provide the convenience of amenities and facilities without the high cost of building your own pool, or the hassle, for example, of having to maintain your own swimming pool or re-surface your own tennis court.  These communities may be gated, with or without guards on duty.  

• Buying a condominium could be the right move for you if you wish to be free of much of the traditional upkeep associated with a single family home.  In addition to common area amenities and facilities, certain utilities such as water and cable TV may even be included in your monthly maintenance fee.  Additionally, you may be able to rely on a manager and staff experienced in handling the day-to-day concerns of the residents.  As in the case of a homeowners association, condominium ownership requires mandatory membership in a condominium association, which will set rules and regulations governing ownership and some aspects of daily living.  

• What type of neighborhood best suits the needs of your household?  Is it important for you to be near schools, shopping areas, public transportation, or places of work?  Area traffic patterns are important consideration in today’s busy world.  

• Should your new home allow for special-purpose space such as boat storage, workroom, home office, or unusual storage?  Are these uses permitted in the area where you would like to live?  

• Will extended family or seasonal visitors require additional space and layout considerations?  

• What level of spending does a realistic budget permit?  What is your current debt load?

• Buying a home at your upper-level spending limit may prevent you from enjoying your home later.  

• Are any changes anticipated that may affect your future budget, such as plans to return to school for higher education?

• Have you taken a look at your “credit report” to see if any errors need to be corrected before you begin application for a mortgage loan?

• Ask your bank, a mortgage lender, or a mortgage broker to do a pre-qualification as a preliminary step to determine your ability to buy.  You will be told about the various loan programs that could be available to you, as well as the amount of down-payment and expected closing costs that you will be expected to have available at closing.  The lender or mortgage broker will provide this information to you in writing in a “Good Faith Estimate.”  

• Keep in mind that a motivated seller might be willing to pay some of your closing costs.  

• Our on-line mortgage calculator can help you quickly calculate the expected monthly payment for principal and interest on different loan amounts, with the ability to see the variations if interest rates and term of loan are changed.  

• Keep in mind that you will need to add to that monthly payment an amount that will go into your escrow account at the mortgage lender.  This escrow fund will be used by the mortgage lender to pay your annual property tax and insurance.

• As you begin your home shopping, ask sellers or your real estate professional the amount of the latest property tax and insurance bills for the property.  Roughly speaking, this amount divided by 12 will give you an estimated amount that you will be expected to pay in your monthly mortgage payment, along with the principal and interest you estimated on the mortgage calculator.

• A seller, a real estate professional, or an insurance agent can give you preliminary information about property elevation and the possible need for flood insurance for a property in the areas that interests you, if those areas are determined to be in a “flood zone.”  

• Keep in mind, however, that once you have chosen a home, your pre-qualification is not a guarantee of mortgage approval.  You will need a “pre-approval” from your lender which is the result of a thorough evaluation of your ability to pay for a home.  This process will require you to document any amount, which you estimated to the lender in your initial pre-qualification.  This can provide you with a written confirmation of the mortgage amount for which you are qualified.  A seller will need to know that you will ultimately be able to buy the home once it has been taken off the market for you.

• When you are looking at homes, don’t allow the excitement of the moment to sweep you away.  Don’t take anything for granted.  Ask questions. 

• Walk through homes slowly.  Look at the condition of the property.  If it appears that something is in need of repair, ask specifically how the seller intends to correct it.  If you ultimately buy the property, you will want to verify that the repair was completed exactly as indicated.  Later is not the time to be surprised by the unexpected that could have been avoided. 

• If you admire specific features in a home such as a spa, fireplace, automatic garage door opener, portable air-conditioning unit in a garage, unique window treatments, ceiling fans, or ornate lighting fixtures, ask specifically, one by one, if the items will be left behind.  If the items will be removed, determine who will be responsible for returning the area back to its pre-installation and removal condition.  Ask specifically how that repair will be handled, so as not to be disappointed on the day before closing.

• Look for mold and mildew, which can be signs of previous water damage or current water entry.  Be certain that areas exhibiting mold are tested by a professional experienced in this area, in order to rule out the presence of toxic mold. 

• If ceilings or walls exhibit water stains, clarify that any promised painting by the seller would include treatment with a stain-killer prior to repainting.  If this is not handled properly, the stain will bleed through the new paint.  

• If you are interested in the property, let the seller know that you will want to have the home inspected by a professional inspection company of your choosing.  Be certain that this is written into your contract, along with specific remedies and obligations by either seller or buyer if the inspection report were to show any areas of concern.  If you still want the home, you may be willing to absorb part of the cost of the repair.  If the damage or risk is significant, you will want to be able to reject the property without losing your deposit.  If the seller will be responsible for making repairs, the specific amount the seller is willing to pay should be specified in the contract.