Hints for first-time homebuyers, Part 1
By Ron Thompson
The first of two blog posts containing hints for first-time homeowners.
A home buyer recently suggested that first-time home buyers would benefit from a handout that covers the basics of the loan process. We do provide a Consumer Financial Protection Bureau booklet called Shopping for your home loan to Welcome Home Loan borrowers.
A good home inspection can alert you to problems, and possibly lower the sales price.
I love working with first-time buyers, who are always excited and full of questions. I've distilled the most common topics we discuss into a top six, and will cover three here and three more in my next blog.
Almost every home buyer will work with a Realtor at some point. While it might seem easier to simply call the Realtor who lists the home you are interested in, be aware that he or she represents the seller and the seller's best interests. Instead, you can choose to work with a "buyer's broker," a different Realtor who will have your best interests in mind.
Your broker may tell you how long the home has been on the market; whether it is, in their opinion, overpriced; whether the seller seems 'motivated'; and how the seller might help reduce your closing costs. Your broker can also help you negotiate price. In most cases you won't have to pay for this service, as your Realtor will split his or her commission with the listing Realtor.
A seller credit is when you negotiate a higher purchase price with the home seller, then the seller credits that increased amount toward your closing costs. It is often a good idea, especially if you need to save cash to purchase appliances or furniture for your new home. Requesting a seller credit is easy and should be done when you put an offer on the home. Having this agreement up-front with the seller is important, because your lender can't increase your loan amount above the purchase price to cover your down payment and costs.
Home inspections and appraisals
Yes, they are two different things. A home inspector is expert at identifying structural and other problems with the home you are buying. An appraiser determines the home's value by comparing it to other recently sold homes in the area. Most lenders do not require a home inspection, but I highly recommend one unless the home you are buying is brand-new. If the inspector discovers a major problem, you may be able to negotiate a lower price or additional closing credit.
A home is often the largest purchase we'll make in our lifetimes. You'll probably feel a mixture of excitement and anxiety throughout the process. These feelings are totally normal. You can also be sure that, despite what you may have heard recently, owning a home that you keep well-maintained will be one of the best investment choices you can make. Congratulations!
Ron Thompson is a Welcome Home Loans Mortgage Loan Originator at the Community Loan Fund.
NMLS #225348. Licensed by the New Hampshire Banking Department.