- Do you have a steady job and income?
- Do you plan on remaining in the same area for a few years?
- Do you have enough money set aside for your down payment and closing costs?
- Do you have an emergency fund?
- Do you live within your means, avoiding credit card debt?
Another consideration is whether you're mentally prepared for the responsibility.
"A first-time home buyer is probably used to renting," Glass says. "They've got to get used to budgeting a little differently in terms of having a reserve when things go wrong. And whether it's a new home or an old one, things will go wrong. Experienced homeowners know this. First-time buyers don't."
Step 2: Find out what you can afford.
When you're sure you have the right mind set to be a homeowner, it's time to determine how much house you can afford. Probably the best way to do that is to get pre-qualified for a loan. In fact, some real estate agents won't work with someone who is not pre-qualified.
There are three options for pre-qualifying: go to a lender with whom you have already established rapport, find a real estate agent you trust and follow the agent's recommendations for a lender, or research lenders online.
First option is the best because "if you've built a relationship with a lender, they will go to extra lengths to make sure they qualify you for the loan."
Your total monthly mortgage payment -- principal, interest, taxes and insurance (or PITI) -- should not exceed 32 percent of your monthly gross income. The U.S. Department of Housing and Urban Development (HUD) suggests that figure should be 29 percent. So this is not an exact science. You can calculate a ballpark figure from this information, but then talk to your lender to get a better feel for how much flexibility you might have with different lending arrangements.
According to Bank of America's Consumer Real Estate Group, you should find a lender that offers "first-time buyer options and financing ideas that take into consideration your personal situation. For example, many first-time buyer mortgage programs require only a low down payment or even no money down. If a down payment is required, you may be allowed to use 'gift' money from family members and other sources. Some first-time home buyer programs feature no closing costs. There may also be down-payment assistance programs available in your community."
Remember, the bigger the down payment, the less you're borrowing, and the less expensive your mortgage will be in the long run.
HUD offers programs to help first-time buyers, too. real-estate/agency1.asp
Step 3: Find out what's available
Now it's time to decide where you want to live and research what types of housing are available -- one-story single family, condos, town homes, etc. You can get an idea by looking at ads and driving around the community before you ever call a real estate agent, Glass says. In fact, he prefers clients who have done some research.
In searching for an agent, find one who makes you feel comfortable and, more importantly, one who listens to you.
HUD points out that it's traditional for the real estate agent to represent the seller's interests, although most state licensing laws require them to treat the buyer fairly. Laws regarding the relationships between real estate agents and clients vary from state to state and buyers should be aware who your agent is working for.
Step 4: Choose a neighborhood.
Once you know the housing stock, you can look at specific neighborhoods. Cruise by at night time to see whether you get a "vibe" that it's a safe neighborhood. If you have children, you'll want to check out the quality of the schools. You may want to check out what types of large-scale facilities (airports, highways, chemical plants, etc.) are nearby, and whether you're convenient to shopping, work and schools. You can do much of this independently, but you can also ask your agent to help you find sources of information about such things.
Step 5: Define your house and find it.
Now, you can narrow down the features you want in a house. Do you want an energy-efficient model? Do you want two stories, a basement, a bathroom downstairs or a large back yard? You may not find a unit with every feature that you want, but this will help you to define what's most important for you.
When you've found a house that has your most important features, is in the right neighborhood and is affordable, you're ready to buy.
Step 6: Do a home inspection.
HUD recommends that an offer should be contingent on a home inspection. As the buyer, you cover the cost of the inspection. If you're unsatisfied with the results, you may ask the seller to pay for certain repairs or to lower the price, or you may decide to walk away from the deal. Home buyers should have an inspection done regardless of the age of the home and should interview several inspectors before hiring one.
"A home inspection could uncover defects that could become very costly to repair after (buyers) assume ownership it could also uncover safety issues, water infiltration issues, roof problems, structural issues, etc.
"A first-time home buyer should start interviewing home inspectors before or at the same time they're interviewing real estate agents and mortgage lenders. Normally, real estate contracts only allow three to 10 days for a home inspection after acceptance of the contract and that doesn't allow the purchaser adequate time to find a qualified home inspector."
Step 7: Shop around for homeowners insurance.
Your lender will require you to carry homeowners insurance. Such insurance comes in many flavors, so it's a good idea to search for a policy that meets your needs for protection while being easy on your pocketbook. Access insurance information that is appropriate for your state .Many states provide data on typical rates charged by insurers, as well as information on the frequency of consumer complaints against a company.
Step 7: Negotiate.
Once you've found the house you want, you should make an offer that's lower than the seller's asking price. The seller expects this and will likely make a counter-offer. You have to decide before you start negotiating what your make or break point is, and stick to it. Just be reasonable. Don't expect the seller to give you a 50 percent discount on a good property.
Step 8: Closing.
In a number of states, it is customary for each party to have an attorney review the closing papers and to be present at closing. Whether that's the custom in your state or not, it's a good idea to hire your own attorney to review the documents to be sure that your best interests are represented in the paperwork. You'll foot the bill for your own attorney.
Step 9: Move in.
You've done all the homework and bought a great home. Enjoy it.
Selecting the perfect builder to turn your house plans into a three-dimensional work of art is a difficult undertaking. You will want to discuss at length the areas in which the builder specializes and the types of homes that they have built in the recent past.
We suggest that when you are interviewing builders, you focus on those whose niche seems to be building homes similar in design and budget to the home represented by the home plans you have selected. Because most builders do have areas of specialty, or “niches,” it is important that a good match between buyer and builder be made prior to beginning the construction of your home.
The first step to selecting a builder is narrowing the list of available options. If there is a lot of new home construction in the area where you will live, seek the names of the builders of homes similar to yours. Ask for references from friends and relatives. It might even be a good idea to ask the designer or architect who designed the plans for your home. Create a list of around ten possible builders, and call to schedule a brief interview with the companies.
It is important to check the references of every builder you are considering. Check with the Better Business Bureau or the Chamber of Commerce in your community or state for anything suspicious. Ask to see proof of required certifications, bonding and insurance from the builders.
Ask for references! This may be the most important step in the review process, and if any steps are going to be skipped please do not make it this one. Any builder who is reluctant to provide references should be looked at with suspicion – a reputable builder will most likely happily provide as many references as you request.
Have a prepared list of questions when you first meet with the builder. Show them the home plans and if possible, the building site. Ask them what their concerns would be with the project. Ask them what they foresee as a potential problem, if anything. It is best to share with the builder the expected budget for the project, as the builder may see issues that have been overlooked in budget preparation.
Get a feel for the communication comfort between yourself and the potential builders. Because the builder is someone with whom you will be in almost constant contact during the building of your home, it is important to ensure a good rapport. If you are uncomfortable with the builder for any reason, it may be a sign that this particular builder is not the best match.
Be wary of high pressure sales. If a builder tells you that you need to sign a contract with them immediately in order to lock in a price, you should take some time to think about whether that is a situation you want to find yourself in.
Take time to check the provided references, find out what types of problems occurred in their previous projects and listen to great reviews as well.
Once you have decided on a specific builder for your home, and it is time to contact the construction of your home, it is necessary to ensure that builder is willing to put their promises on paper. If there is any hesitation on the part of the builder to put details in writing, it is important to investigate the reason for their hesitation and to negotiate an acceptable agreement.
When construction plans have been arranged it will be necessary to determine a payment structure for your builder. Ask them their preference, but also investigate your options as the home builder. Talk to the provider of your funding, if applicable. Sometimes, the bank will have certain requirements that must be met prior to funds being released.
NEW HOMES:
*Most purchasers of new homes in atlanta fail to obtain a professional inspection. Instead, they trust that new homes are unlikely to have defects and that any imperfections will inevitably become apparent during the warranty period. These two assumptions have caused financial loss and mournful regrets for many buyers of new homes. It does not mean defect-free.Homes are built by people, and regardless of experience, skill, knowledge, integrity, and good intentions, all people make mistakes. That's the one guaranty that never fails.
Then there is the question of building department approval. Municipal building inspectors provide services that are limited by the time available to perform an inspection. Building departments are typically under-staffed and over-worked. An inspector might have as little as 15 minutes to evaluate a home. Furthermore, municipal inspectors are overoaded and really don't inspect every home. Therefore, the motivation for thoroughness could be missing.
Accurate home inspection of atlanta, the situation is much different. I will spends two-and-a-half on-site, time enough to access and inspect all pertinent areas of the home. As a members of the private business sector, I'm motivated to perform thorough, comprehensive inspections.
I'm competent in my abilitys,education experience, substantial credentials, and a reputation for thoroughness--can provide valuable financial protection to the owners of new homes. The missing ingredient is public awareness of the need to inspect newly built homes. As long as the warranty period is in effect, owners can present a list of repair needs to their builder.I offer with every inspection, through american home warranty a 90 buyers limited warranty and a 120 pre-listing inspection warranty to help motivate sellers wanting to sell their home.
