What a wild time it is for first time or entry level home buyers this Spring ! It can be frightening indeed if you don’t happen to have a Realtor who understands the path to home ownership and the important first steps you absolutely MUST MAKE!
So what are those steps? How can you begin this daunting process? Where do you start this road that only one family in six in the state of California can actually travel? Who can you call ???
First: Get a GREAT AGENT! Now that is a loaded statement, right? Who is a great agent? How do you find them and how do you know they may be great or just ho hum? The best agents are not always the old ones or the new ones. In my opinion the best ones are ones who are actively working full time in the business NOW and who have the buyer’s interests as their FIRST priority. One who is actually up to date with the CA forms, and how to use them, is a start. Has a computer, a social media presence and knows how to use that too!
So WHO? What Realtor do I trust to help me? Your best friend from grade school? Someone’s cousin, spouse or ? I could get crazy about this but I won’t go there. Ask your friends, parents, church leaders, tax consultant, they all have a favorite Realtor! But don’t stop there, interview a few! You will discover a great agent when you listen intuitively and are able to ask yourself CAN I TRUST THEM? Listen to your “gut”. Ask the agent how many transactions they normally close in three years. ASK their clients , look for a blog, or even a great Facebook page, and see what their friends have to say about them. Are they working full time as an agent! Most great agents are working OVER TIME right now because the market for entry level homes in most California areas, is HOT! (ps Deb St John is a great agent, ask her clients)
Second: GET PRE APPROVED by a reputable local lender! Why? Because when you are in the entry level or first time home buyer market and it is fast and hot, you must have the money ready before you go looking for homes. So SHOW ME THE MONEY is what the sellers are going to be asking! If you are not pre approved it can take upwards of a week to be pre-approved for a loan. That is more than enough time to lose out to other READY buyers! That is a bummer and often happens in the beginning of this process. So don’t be discouraged, get proactive instead!
So why a local lender? Because area homes and neighborhoods have differences. Plain and simple the agent and the loan officer needs to know the area strengths and weaknesses, or you may not close the loan. Also, there are many loan programs. Each loan officer has their own resource of loan products to offer. Some know the ropes better than others and some even know about really cool first time home buyer programs that are unknown to others that can actually assist you with real dollars! A GREAT agent will know who these people are and be able to refer you to them by name and phone number!
More about the money: having a good strong earnest money deposit ready for your offer is vital. In our area the entry level homes are between $275,000 and $325,000. Wow, really? YES! So a good deposit needs to be enough cash to prove to the seller that you are EARNEST….serious and won’t flake out once they accept your offer. In my opinion that is a number that is AT LEAST 1% of the offer price, or $2750.00! for entry level homes this Spring. Can you produce that much money in three days? That is important. So don’t count on selling your car to get it. Do you have money for your inspections? A thorough HOME INSPECTION costs in the neighborhood of $450. A pest inspection, often required by your lender for the loan, is approximately $175. If the seller doesn’t provide you with a septic inspection and clearance that might cost you an additional $750. These are fees that are totally negotiable and often the sellers will provide some of them, but YOU MUST ASK! So an agent (back to great agent again) who knows to negotiate these on your behalf is going to SAVE YOU MONEY! (ps…Deb St John is a great agent!)
Finally, first time home buyers, this can be FUN! If you have a great agent, and a great lender, you will be amazed how much fun it is. ( yes it is still scary like a walk in a dark forest, having the right guide to light the way DOES MATTER )
Great leaders know the normal pitfalls and will walk you through them. ALL transactions have pitfalls! It is the nature of the game of real estate. Knowing ahead of the journey where and when you may run into a snag, having the tools ideas and game plan to overcome them is what a GREAT AGENT will bring to the game and may mean the difference between obtaining the home of your dreams or not.
PS: Debbie St John is a great agent….call her