With so many good opportunities for first time home buyers in the market, our “Ask a REALTOR®” experts tell us what they recommend first time buyers be aware of before beginning their home search.
With so many good opportunities for first time home buyers in the market, our “Ask a REALTOR®” experts tell us what they recommend first time buyers be aware of before beginning their home search.
“I find that most of today’s first time home buyers tend to be short on the 10% to 20% downpayment funds needed to qualify for a conventional loan. Many turn to FHA which only requires a 3.5% downpayment. However, there are several additional fees when using FHA; they include higher closing costs, a 2.25% upfront premium, and a mandatory monthly mortgage insurance premium.
When combined with real estate taxes, home owners insurance, and possible homeowner association dues, these extra fees can run in the hundreds of dollars per month. When consumers look at simple online mortgage calculators, these fees are rarely taken into consideration. This causes the buyer to believe that they may qualify for a more expensive home than they can actually afford. Confusion, dismay, and a distrust for mortgage brokers and real estate professionals are often the emotions that follow when the buyer finally sees a Good Faith Estimate.”
~ Stephanie Crawford
Zeitlin & Co., InTown
Nashville, TN
“I think a lot of first time buyers overlook the little maintenance items that can grow into big repairs down the road. Changing the air filter on the HVAC regularly, as well as annual maintenace can run a couple hundred bucks a year. Not taking care of this type of regular maintenance can reduce the life of the unit and cost several thousand dollars. Here in Florida, I recommend a termite bond to all of my customers. Again, this has an annual cost of several hundred dollars, but can protect against tens of thousands of dollars in potential damage.”
~ David Welch
RE/MAX 2000 Realty
Orlando, FL
“There are definite costs of ownership that need to be considered when determining whether ownership vs. renting makes sense. The great satisfaction of having control over your own security seems to me to be the best benefit of ownership, the unknown of when and if a landlord may decide to sell your rental is not a very comfortable situation to be in, only my opinion.
However, along with home ownership come expenses a renter doesn’t have normally have, such as real estate taxes, home repairs (sometimes major like heat system failure, roof leaks, etc.), minor repairs, home insurance, etc. These things should be considered when purchasing and definitely, to avoid huge unexpected repairs, you MUST have a very thorough home inspection which should tell you the condition of the property prior to finalizing the sale.
Also, a buyer should check for available insurance and at what cost; insurance rates can be higher if property is located in a flood zone, if the owner will have certain pets or a swimming pool, and are also affected by the condition of the home. It is wise to have some monies put aside for repairs in the event they are needed and perhaps to even factor in when looking at your qualifications an extra dollar amount for the ‘just in case’ scenario.”
~ Valerie R. McGillivray
Stone Ridge Properties
Newburyport, MA
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Important Things First Time Buyers Should Know