First Time Home Buyer Article 8 of 10 Shopping For Your First Home

Posted on | August 26, 2009 | Written by: Diane Donnelly

Congratulations my first time home buyer friend! You have committed to excellence and are doing your due diligence by educating yourself on the process of buying your first home. You have made a list of what is important to you in an area and in a community. You have talked with a loan officer to determine what you qualify for. You’ve researched the loan programs and have taken the time to see what kind of loan program fits your needs. You have done a budget and committed to stick to it (did you do that part?). You have interviewed realtors and believe you found the perfect match.

Now the fun part! Go looking for homes! Hand over the checklist to your realtor and ask him or her to pull listings that meet your specific criteria. The results may be abundant or may be scarce. Be prepared to modify your criteria if you aren’t finding much. This is why you made your list of “must haves” and “ like to haves”. Now the hard part – Don’t get emotionally involved in the house until you go to settlement. The house is not yours when you write the offer to purchase. It’s not yours when the seller accepts the offer. It’s not yours when you secure financing. It’s not yours when the appraisal comes in meeting the required value. It’s not yours when you clear the home inspection. It is only yours when you go to the title company and the seller signs the deed over to you, you pay the title company the amount due and you receive the keys. And even then the house is not yours… it’s now your home.

When I am working with a buyer, I ask him to get a feel for the neighborhood. Drive around. Talk to the neighbors. Watch the activity. Do people tend to like it there? Do the neighbors seem friendly? A few things the agent will not be able to answer for you: 1. What kind of people live here? 2. Are there any children? 3. How are the schools? 4. How is the crime? 5. Is this a safe area? First of all, these are all subjective and would only be the opinion of the realtor. Secondly, it is against fair housing to answer some of them. Additionally, realtors may not be the appropriate source for some of that information ie. Crime.

We can tell you how to find the answers to those questions. First, if safety is a concern or the crime in a community, I would suggest contacting the local police department and asking them about any crimes in the neighborhood. For schools, there are ample websites that can address this for you. You can actually see rankings of the schools and if they are blue ribbon or nationally ranked, etc. If demographics are important to you, you can seek that information on the census bureau.

When you find the house that meets your needs and you begin falling in love with it, be prepared to write an offer. This is why it is critical to make the checklist. It helps you to remain “in check” and ensure you are making a rational decision, not an emotional decision. The fewer homes that meet your criteria, the more important it is to be able to make your decision quickly.

When you are previewing a home, take notes to evaluate the property. What do you like? What don’t you like? Why? What do you and what don’t you like about the area? Rank the home/neighborhood 1 - 10. Let your realtor know what you are thinking so as he does research the next time you look for homes, he can start to tighten down what he shows you based on your likes and dislikes.

Something to consider when you are searching for homes…. Will this home be appealing to buyers when you are looking to move? Seems silly to have to consider selling this home before you’ve even purchased the home. It can be a big mistake to buy a home without that kind of consideration. For instance, when the market was booming, the condition of the home, the location of the home, the proximity of the home to undesireable things ie. shooting range, etc. seemed less important because people were in a buying frenzy. However, when the market slowed down, all of those things became very important to the buyer and they had more time to analyze the area and they didn’t have to make a decision on the spot. You don’t want to be the one holding the undesireable house in a buyer’s market. It doesn’t bode well for you. Always keep the end result in mind.

Another consideration…. Is this an area that will likely appreciate or likely to depreciate? No one has a crystal ball including your realtor (I wouldn’t be blogging if I did)! But certain factors play a role in an appreciating area vs. a depreciating area. The more appealing an area is, the more likely it is to appreciate. Conversely, the less appealing an area is, the more likely it is to depreciate.

What factors are likely to be considered appealing? Good question!

Good schools
Areas that are in close proximity to employment hubs (employment centers that employ high volumes of employees) ie. military bases, government agencies, large corporations, etc. Look for new, expanding and relocating businesses in your county or town.
Areas that are in close proximity to mass transportation
Areas that have good curb appeal
Areas that are in close proximity to healthcare - hospitals, etc.
Areas that hold a low unemployment rate
Look at the average home prices for existing home sales. Are they increasing, decreasing or holding steady? How does it relate to last year? Is it consistent with the area? You can find this information on your county or town’s economic development corporation. For Anne Arundel County, Maryland, you can go to the Anne Arundel County Economic Development Corporation.

You now have a good handle on what to look for, how to assist your agent find the right home for you and you aren’t going to become emotionally involved until the day of settlement. You are well on your way!

The next blog will be about writing an offer. I will talk about what other components of writing an offer are important other than just price. I will touch on what a buyers market is and what a sellers market is.

If you know someone looking to buy his first home, please forward this blog to him or her.

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Thanks for reading and Live Well!

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