First Time Home Buyer Headquarters!
Important Steps To Buying Your First Home

Purchasing a new home is an important decision, especially so for a first time home buyer who doesn’t have the knowledge and experience in buying real estate. Skye Bruce Properties provides the first time homebuyer with the critical tools and information so they can determine if home ownership is right for them.

Buying a home is a process and essentially involves important steps:

1. Deciding to Buy
2. Organizing Paperwork
3. Shopping for a Home
4. Preparing an Offer
5. Securing a Mortgage
6. Closing on your new home!

Many first time home buyers get caught in the trap of being unprepared and uninformed which can lead to much confusion and frustration. Educate yourself, organize your paperwork, and utilize the resources available and the home buying experience can be less stressful and more enjoyable.

Step 1: Deciding to Buy

So you want to be a first time home buyer? Ask yourself these questions:

• What are your personal reasons? Are you getting married or expecting a child and need more space or do you want to move closer to work? Sit down and make a wants versus needs wish list list and think it through.
• How long do you plan to own home? You may be better off renting if you expect to move or get transferred within 2 years. Contact your loan consultant to figure out how long it would take to break-even on your expected home purchase. Calculate if you should rent or buy. Currently, it takes about 1.5-2 years to break even on a typical home purchase.
• Do you have enough cash for a down payment and closing costs?
• Can you afford to carry a monthly mortgage and still pay your bills and go out to dinner or movie more than once a month with friends? A mortgage should take no more than 1/3rd of your gross income but this amount will also depend on how much net disposable income you have after paying your mortgage payment.
• Do you need a tax break? In most cases, renters do not receive a tax break, homeowners do! You are able to deduct the interest on your mortgage loan and property taxes. Consult your tax accountant to discuss how purchasing a home will benefit you.

Whatever you decide, keep yourself informed and ask a lot of questions. Also, pay attention to your feelings and trust your instincts. If area real estate is moving fast and you feel pressured to buy, you may want to wait. If you find a neighborhood you like but aren’t ready to commit, consider renting for six months-1 year to learn more about the area.

Step 2: Getting Organized

Start a Home-Buying file

If you keep your records in one place, you can get organized in a few hours.

Credit data

Very Important: Check your mortgage credit report because it may differ significantly from the one you obtain online. Also, you should correct any problems before applying for a mortgage if possible.

Here is a list of loan documents a first time homebuyer will need to process the loan:

• Copy of purchase contract if you have found a property.
• Current pay stub.
• W2 forms and tax returns for last 2 years
• Most recent (2) months asset statements including bank, money market, 401k, etc.
• Loan/debt payment information for credit cards and auto, student, and personal loans.
• Name and phone numbers for landlords, attorneys, and realtors.
• If condo purchase you will need to get declarations and by-laws and name and phone number of association or management company.

Real Estate Listings

Use our helpful FIND YOUR HOME to request information about houses in the Richmond area. Our Skye Bruce Properties Buyer’s Agents can help and show you any homes on the market. Just like the HGTV Show, HOUSE HUNTERS. Make notes about properties as you preview them and prioritize the features.

Inspection Report

You should always use a home inspector when buying a property. The property may look great but there may be some hidden defects such as foundation or structural problems which may cost thousands of dollars! Your Skye Bruce Properties Buyer’s Agent can show you how to include this process into your contract offer.

Insurance information

Choose your insurance agent wisely and cut your insurance cost. Remember, a condo does not require exterior homeowner insurance because protection is provided by blanket insurance policy with the association. You should check into insurance to cover personal belongings and interior structure (studs-in) since these items are not covered by blanket policy.

Get Pre-Approved

Currently, the real estate market is competitive and sellers are looking for buyers who are pre-approved not pre-qualified. A pre-qualification is simply a letter stating that you are pre-qualified to purchase a property based on information given to a loan officer. A pre-approval involves submitting a loan file to underwriting, accompanied by actual documentation, for approval and receiving an Pre-Approval letter. This letter gives a first time home buyer negotiation leverage when submitting an offer to purchase a property. Get Pre-Approved Today! Skye Bruce Properties can help you through this process and connect you with our mortgage team.

Step 3: Shopping for a Home

Work with a REALTOR from Skye Bruce Properties!

Using a Skye Bruce Properties Buyer’s Agent is smart! Skye Bruce Properties will take the time to understand your priorities and needs. Make a checklist of what you want, prioritize them, and give them to your RichmondHomeShopper.com Buyer’s Agent

Take a checklist of questions to ask when you go to see a property

Get a house-hunting checklist to compare and contrast properties. A beautiful Cape Cod may be a favorite until you check out your notes later and discover it needs a new roof or siding. When you find a home that interests you, research the neighborhood. Talk to the neighbors and find out what it’s like to live there. You may want to park on street and just observe activity and listen. If everything checks out you are ready to make an offer.

Step 4: Prepare an Offer

Step back from your emotions. You are creating a contract to purchase a home, which will legally bind you if the seller accepts. You also will submit a money deposit with your offer, which is only refundable under certain conditions.

Our Skye Bruce Properties Buyer’s Agents can provide you with knowledge and research! They will help you understand:

• Current market conditions.
• The higher the demand, the more you can expect to pay.
• Price of comparable homes sold in the area recently.
• The seller’s motivation. In cases, such as divorce or job relocation, the seller may settle for a lower price in exchange for a quicker sale.

Prepare your Offer

• Always make an offer within your ability to pay. Find out how much you can afford.
• To strengthen the offer, include your Pre-Approval letter.
• Attach conditions to your offer.
• You usually will have to include a deposit with your offer, to apply as a good faith down payment if the deal goes through. If you don’t have any funds to put down, then you need to check out earnest money program.

What’s Next?

The seller may accept, reject, or counter your offer. If the seller accepts, it is a done deal. If seller rejects, don’t take it personally, look elsewhere, and you will find the perfect home. If the seller counters, you can accept or “counter the counter offer.” I strongly advise that you hire an attorney on your first home purchase because there are many legal forms and details that need to be addressed concerning your specific real estate transaction. A Skye Bruce Properties Buyer’s Agent can help your through all phases of the offer process and through negotiation!

Step 5: Securing a Mortgage

The first step in the loan process is to get pre-approved and I believe this should be done before taking any of the other steps. Once you are pre-approved with a lender or broker you can work with them or choose another lender.

Choose a lender or mortgage broker

• A lender actually makes the loan.
• A broker acts as a go-between for a buyer and a lender.
• Submit your documentation.
• If you have a pre-approval with a lender, your documents are ussually good for about 90-120 days with that lender. Otherwise, you will need to submit pay stub, bank statements, etc.
• Check interest rates. Interest rates tend to fluctuate daily. Frequently, you should check mortgage rates. If interest rates are low, you may ask your lender to lock in a rate. Otherwise, you can choose to float,but you may end up with a lot higher rate than expected. Look for trends in the mortgage market. Don’t just gamble!
• Choose a loan.
• You may think you want a 30 year fixed, but the most important factor in determining which program to choose is the length of time you will be in home. For example, If you know that you will be selling your home in 3-4 years then a 5 year arm would be your best bet. Also, you may want an interest only option to keep your monthly payment very low. Consult your loan officer about designing a loan program which will best fit your financial needs.

Step 6: Closing on your new home!

On closing day, the seller officially signs over the house to you. It can take anywhere between 15 to 90 days to close on a typical real estate transaction.

Make sure you avoid last minute surprises!

• Set a closing date that works for you.
• If you are renting, set a closing date near the end of your lease to avoid paying unnecessary rent.
• Be sure to schedule enough time to move in and get 3 moving company quotes.
• The best bet is to close on the sale a few days before you move in to avoid being overwhelmed.
• Estimate your final closing figures.
• Two days prior to closing a statement is made available for you and your attorney’s review.
• Most importantly, the lender is required to give you a good faith estimate of closing costs. Go over the costs with your loan officer and make you sure you understand each one.
• Schedule a final walk-through.
• Make certain the seller has completed any repairs specified in the contract and satisfied any other conditions spelled out in the contract involving the home’s condition.

Sign the Papers, get the keys, and experience the American Dream first hand!

Click here to request information about homes on the market which meet your specific criteria

Click here to contact a Skye Bruce Properties Buyer’s Agent to learn more about the home buying process or to go house hunting!