Hey everybody it’s Austin Solomon. Welcome to The Real – Wausau’s Real Estate Show.
It’s 2020 and I’m excited to share I’m doing a real estate podcast this year. It’s going to be a mix of fun content, educational tips, as well as some guest speakers along the way.
Today, we’re going to kick off 2020 with some tips for home buyers looking for their first house. It’s a new year, new decade, so where do we start?
Thanks for joining me today! Episode #1 – First time home buyers… where to start and what to expect.
Most times, when buyers are looking for their first house, they start by Googling, or maybe going on Zillow and looking for properties. Inevitably they find one that strikes their interest and maybe they get their heart set on that one house. They reach out and find out that the home has an accepted offer. So, after hours of planning and visualizing themselves in that house, they find out it has an accepted offer. Or maybe it is available and they reach out and they go to look at the home. They like it, but where to go from there. Who are they with? Who showed them the house?
So, if you start that way a lot of times it can be disappointing and doesn’t leave you with the best feeling. So today we’re talking about what’s the best way to go about the home buying process as a first time home buyer and how to avoid the pitfalls.
Step #1 is getting pre-approved. Pre-approval is basically a process where you meet with a lender and you find out how much you can afford. The lender will ask you questions about your income and credit and they’re going to decide how much you can afford and what they’re going to approve you for in a mortgage.
Really the most important part in this process is not only getting pre-approved, but also, for you to gain “financing confidence” is what I call it. If you can go into this process and talk to a lender and figure out, “What can I afford? What am I comfortable spending per month? What all goes into a monthly payment? What do I need to put as a down payment? How much money do I need for closing costs? What are closing costs?”
Also, in general, will the bank, or am I in a situation where my credit / income will the bank give me a loan? That’s a good general question as well.
At that time, if you’re not pre-approved. If your credit is not in a good spot or the income isn’t sufficient, what can you do and what should you do to work toward getting that pre-approval.
All of these things are super important to know and the more confidence you have in these numbers, the easier it’s going to be to make a decision and find the right home.
If you do this first, you can kind of plan and feel comfortable with the numbers. It is way easier to look for a house.
Also, the bank will issue that letter, a pre-approval letter, so when you find the right house, you can show the sellers that letter and that will help you as the seller will know you’ve taken the first steps at getting a loan, and that can help you in the negotiations.
Ok, step #1 complete, step #2 is to meet up with an agent. Hopefully it’s me or someone from our team. Really this is the process of getting comfortable with the people that are going to be taking you throughout the transaction. So you want to feel comfortable with the agent, you want to trust them and work with them throughout the process.
You want to feel good about who you’re working with.
A lot of times I’ll meet up with them in person. It’s good to meet up in person and go through the process. What is included in an offer? What are contingencies? How does an inspection work? How do we go about looking at houses? All those different questions and things that you would normally ask, an agent can address.
Then what we’ll do as agents, we’ll discuss your wants and needs for your next house. A good agent will ask a lot of questions and help you prioritize what is most important to you and what makes sense for you to purchase… or what makes sense for you to buy inside of your budget.
Then you can discuss representation, any agreements, or how you want the agent to represent you throughout the process and what makes the most sense for you there.
At this point, if you’ve completed step #1 and step #2, you’ve got your pre-approval, you’ve met up with your agent, now you’re confident in how much you can afford, what your monthly payment looks like, what kind of price point you’re going to be looking at, and you’ve got your team set up. You’ve got your financial officer and you got your real estate agent, who you feel confident with searching for homes and making sure everything lines up there.
So now, you get to enjoy the fun part, which is looking at houses and going and touring homes. This process is more fun, you go out and look at houses. The agent will be searching for you. What’s best is a combination of the agent searching and the buyer searching as well. There are a lot of great websites out there for you to look at homes.
When you find houses that you want to see or the agent makes some suggestions and they look like good fits, the agent will go ahead and set those up for you. You can tour those houses and if it’s the right fit you can rock and roll and submit an offer.
You can see that if you started with step #3 and you just went out and started looking for houses right away without addressing steps #1 and #2, your a bit more lost in the process and you might be looking at homes that don’t make sense for you budget. If you reached out online, you might be with an agent that you don’t really want to be working with but you just naturally got paired up with them because they were attached to the house. That’s why steps #1 and #2 are critical to start.
Step #4 when you do find that house, you submit the offer, again the agent will assist you and prepare the necessary forms. You’ll do the negotiations and if everything comes together, that’s step #5 accepted offer! Next you work out the conditions of that offer and move toward the closing.
Obviously I’m paraphrasing the last three steps, as today we’re focusing on the first time home buyers, where to start and steps #1 and #2. We’ll get more into the others at another time.
Again, just to recap steps #1 and #2. First time home buyers, where to start. Meet with a lender, gain that financial confidence – How does my credit look? How does my income look? Based on those things where should I be? How much should I be spending each month on my house. What goes into a monthly payment? And if you can feel really good about that. Then you can reverse engineer it and say, “Hey, I need to stay between these price points”, and you bring that information to your agent and the agent says, “Hey, let’s find the best possible house for you at that price point and let’s figure out what’s most important to you”.
So that’s the first episode of The Real. We keep it real here on the show. Thanks for tuning in! Looking forward to next week’s episode.
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Austin Solomon | The Solomon Group – Coldwell Banker Action – (715) 212-4693.