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How to buy your first home
Contributed by: Jeff Haynes on 6/12/2007

Buying your first home can be an experience much like riding a roller coaster. I'll never forget the first home I bought. I was only looking and wishing. I had no financing in place, and I thought my credit was bad. I ended up buying a house that would not have been my first choice, had I prepared myself better.

The emotions of making such a large investment can often cloud a good business decision. Our homes are the single largest investment we make, so take your time, especially in this market.

Most of us do very little or no research at all before investing in a home. Doesn't it make sense to become as informed as possible before buying your first home?

This column should help you avoid some of the common pitfalls made by first time buyers.

Not checking your credit

1. Go to www.annualcreditreport.com and get a free copy of all three major credit reports. I have provided loans for people who did this early on, found errors in their reports, and disputed each error with all three bureaus. This increased one person's score over 20 points and improved the interest rate on the loan.

Not knowing who is working for you

2. Pick the team of professionals that are right for you. The realtor, lender and title company do not all have to be recommended or chosen by each other. Whether chosen by you or your realtor they should all work hand in hand for your benefit.

Not interviewing three professionals

3. Always interview three professionals. When looking for a Realtor or lender interview three from each category. A strong team will mean fewer worries for you.

Not considering a comfortable payment

4. You should consider your income, lifestyle and what you are comfortable paying per month. Make sure your total estimated payment includes taxes and insurance. A lot of first time buyers get a payment shock at the closing table from a broker who never included the taxes and insurance in the payment.

Not getting prequalified for your purchase

5. Get with your chosen lender and go over exactly what you want your house payment to be and they will generate a pre qualification letter for the amount of money you want to spend. This will allow you to start looking for your home. The lender will shop for different products for you while you are looking for a house. You cannot get an approval for a loan without a contract on a house. So have some fun looking at this stage. I recommend looking at 7-10 potential houses.

Not imagining the house empty

6. Try to imagine the house empty. The house may not work for you or your furnishings. The staging of houses is done by professionals today. Don't get emotionally attached to professional staging. If you ever watch A &E or any of the "Flip this house" series these guys are professionals. It is becoming more and more popular to pay professional stagers or even offer you the house fully furnished. This is fine if you like the total package; however, consider what your home will look like empty or with your own furnishings. Stagers will also make the sellers own furnishings show better, so just beware.

Not getting a certified inspection done

7. Inspect, Inspect, and Inspect. Make sure you hire a certified inspector and that they generate a report with a list of problems and potential problems. As a buyer you then can negotiate what the seller will fix and what you are willing to fix. A good report will go into details of the entire house.

Not getting everything in writing

8. This goes for the entire transaction. If it is not in writing then it does not exist. Weather it be a family member, friend, or a referred professional; if it is not written down in the contract, report or any other paperwork you have on the purchase it did not happen.

Not doing a final pre closing walk through

9. Make sure to do this after all the inspection items are done. I recommend you do a final walk through before closing. There are a lot of little things that some sellers will avoid on purpose, such as a final clean. You can make them finish what was on the list; however as stated above get it in writing.

Not doing a little research before starting

10. When all the right people are involved buying your first home can be a lot of fun. Just do yourself a favor and get a little bit of an education first to better prepare your self. Do not simply rely on people being honest. There are a lot of people who will bend the system for a buck.

Jeff Haynes is the Executive Manager of Custom Finance L.L.C. in Westminster. He can be reached at www.customfinancellc.com or 303-339-0428.






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CONTRIBUTOR INFORMATION

Jeff Haynes

Westminster , CO

Jeff Haynes has posted 2 stories and 0 comments since joining on 5/29/2007. Jeff Haynes 's average story rating is 5.
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