Being a first time home buyer can be intimidating as he/she often does not know where to begin. The first step in buying that first home is to go to a bank or lending institution to see how much money can be borrowed by getting "pre-approved" for a mortgage. The lender will pull the buyer's credit report, check the buyer's debt-to-income ratio, and basically do an analysis of the buyer's financial situation to determine how much money, if any, it would be willing to lend. The pre-approval process is critical because: 1) the first time buyer will know exactly what he/she can afford; 2) helps the Realtor find the perfect home for the buyer quicker, as he/she can narrow the focus of his/her search; 3) increases bargaining & negotiating power as the sellers will be more likely to accept an offer, even if it is below list price, because pre-approval gives the sellers peace of mind that the potential buyer definitely has the funds to close the deal. This is especially important in the case of multiple offers. A potential buyer with pre-approval definitely has an advantage over one without pre-approval. Next, the first time buyer should do his "neighborhood research:" 1) Is the neighborhood in an area you feel comfortable and safe in? 2) Are the homes in the neighborhood appreciating? 3) Do the homes in the neighborhood have room for your family to grow? 4) How close is the neighborhood to your "hot spots," e.g: schools, work, restaurants, recreational facilities, churches, etc. First time home buyers can do basic research themselves on-line to find homes in the area(s) that interest them. Then they should enlist the services of a buyer's agent (Realtor) when they are ready to start looking at homes. Realtors have been trained to offer services and representation that make the buying process less intimidating and stressful. Remember: the first step a first time homebuyer (or any potential homebuyer, for that matter) needs to take is to get pre-approved by a lending institution. This step shows everyone involved in the process: the sellers, the seller's agent, and the buyer's agent that the buyer is not only serious, but most importantly, is capable of completing the transaction. |