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!
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