If you’re contemplating buying your first place, try to stay within your comfort zone and not get swept away. As local real estate experts in South Florida, we want our buyers to have access to the right information so as to make better decisions.
1) Don’t Guess …. Determine what you can afford:
Figure out your financial comfort zone, before you really start looking for a place to buy. Start by jotting down the basics: your income, savings, any portfolio investments … account numbers, income tax returns … along with a list of contact names and numbers for any banks/loans/investments .
Make a list of expenses … Include groceries, gas, car payments, insurance premiums, loans you are in the process of paying off (including credit card balances). Those will help give you a better idea as to what you can afford …
You will have additional expenses as a homeowner – above and beyond what you have now, as a tenant or living rent-free . Insurance, property taxes and your monthly mortgage … along with maintenance, upkeep, painting, landscaping, yard work, pool service, household repairs (including appliances, air conditioning, and roof) all fall on the homeowner.
2) Get pre-approved … Make sure you are properly qualified for a mortgage:
Talk with a loan officer and get pre-qualfied for a loan. You’ll want what’s known as a pre-approval letter though (or better still DU approval – “direct underwriting approval”)- before you fall love with a house or make an offer. And by the way, once you have a loan approval, don’t lease or buy a car, and don’t take out any new credit cards because any expenses or debts may alter your credit score and that can cause hiccups … change your rates … and/or cause your loan to fall through.
3) Be realistic about your first home purchase:
Start with each “want/must have/would like to have” … And first and foremost on that list should really be location. There are certain things you can’t fix or change about a house (ie. ceiling height/neighborhood/ basic layout/ number of beds and baths/square feet inside the house)…. and location is one of those.
There are a lot of changes that you can make later. You can change paint colors, replace flooring and appliances, window treatments, lighting, add hurricane protection, re-landscape, add a pool or re-surface a pool, remove wall-paper, update baths or kitchens … but you really can’t change things like ceiling height, or alter neighboring homes , and you can’t drag your house to a different location, or change the school boundaries.
As you’re looking at potential properties, try to look past whatever hideous decor or outdated furnishings might to the seller (All of that will go with the seller!).
Look past the dirt too. I know it’s easy to fall in love with a perfect, model home. But dirty houses can be cleaned, and they often sell for less. Be happy if no staging or decorating was done by the seller … What it often translates into is a lower pricetag for you!. Sometimes the money a seller puts into readying the house ( to make it look like a model home) somehow gets added to the list price …
Spit and elbow grease (or a commercial cleaning service), a coat of fresh paint, and minor touch-ups are simple enough … and inexpensive … so keep that in mind if you’re the buyer. You may be able to live with some imperfections … then make your own changes later on… Who knows, you may even get used to the awful wallpaper or light fixture you cringed at – at least for awhile.
4) Calculate your potential return on investment … Based on neighboring values and current market values:
If you buy a place that has room for improvement (that can use some updating), by making those updates you’ll be the one to reap the benefits and gain equity. Cosmetic changes , re-decorating and/or adding curb appeal may well build added equity.
5) Hire a Realtor or Broker to represent you as the buyer… and… get a knowledgeable Inspection Company and make sure the property you’re contemplating is well-constructed and without defects:
You can avoid most hiccups and/or unexpected surprises: Rely on people you trust … Gather information… Hire a buyer’s agent. By having a realtor represent you, you’re apt to get better terms and have fewer hiccups – and I’m talking about all phases of the purchase … from negotiating your contract terms, recommending inspection companies, overseeing loan, appraisal, survey, title, open permits, code violations … keeping an eye out for any red flags and nipping them in the bud, and handling any re-negotiations.
A listing/seller’s agent can and often does represent both parties in the role of a transactional agent … seeing to it that the both parties actually get to the closing table and title transferred and keys exchange hands.
By having your own buyer’s agent : your buyer’s agent will oversee the transaction( for you) from showing you property that fit your criteria, helping you determine property value and what to offer, pinpointing comparable recent and relevant sales to serve as comps, preparing and submitting your offer, negotiating the contract, overseeing it through to closing: loan process, inspections, closing out any open permits, checking for code violations, recommending insurance and title and closing agents, explaining how to file for your homestead exemption … and being there for you even post-closing..
Buying and moving into a new place is exciting. It’s can also be overwhelming … Just remember that some of the cosmetic fixes, you can do yourself … after the place is yours.
Whenever you’re ready to buy or move … call us. we look forward to making your next move the best. The Restivo Team at EWM Realtors 305 793-1365 or restivo.v@ewm.com
