Top 5 Tips for First-Time Homebuyers From People in the Biz
Brownstoner talked to our expert Services Pros and put together their best advice for first-time homebuyers. You may be surprised to discover that homeownership — even in Brooklyn! — can be within reach. Welcome to the party. 1. Get your finances in order — and don’t assume debt disqualifies you. “Many consumers count themselves out before…
Brownstoner talked to our expert Services Pros and put together their best advice for first-time homebuyers. You may be surprised to discover that homeownership — even in Brooklyn! — can be within reach. Welcome to the party.
1. Get your finances in order — and don’t assume debt disqualifies you.
“Many consumers count themselves out before they even get started due to misconceptions about what amount of a down payment is actually required,” says Brian Scott Cohen, a mortgage consultant at Wells Fargo. “A 20 percent down payment is not always needed. Your credit score is what qualifies you for a mortgage.”
If you don’t already know your credit score, go to AnnualCreditReport.com and get a free copy of your credit reports from each of the three credit bureaus: Equifax, Experian and TransUnion. Go over your reports and if there are any errors, correct them. You’d be surprised by how often there are errors.
2. Think about what might happen in your life in the next five years.
A good rule of thumb is not to buy unless you plan on staying in your home more than five years. Otherwise, the transaction costs on the closing, taxes and fees can become expensive.
Is it possible that your job may move you to a new city? Or that you have a kid? These are factors that will affect your choice of home, as well as your choice of mortgage.
“Early-career professionals will most likely stay a shorter period of time in their property due to career changes, expanding families and general lifestyle changes,” says broker Gabriele Sewtz of Compass.
3. Find the right people to help you through the process.
No one expects you to become an overnight expert on Brooklyn real estate, or mortgages or home inspection. There are service providers in all these areas who will help you through the process.
“Putting the right team together is crucial,” say agent James Stubbs and broker Jean Austin of Brooklyn Bridge Realty. “Your broker, your bank and your attorney. Finding a real estate agent that understands your needs and can work honestly with you.”
You may want to start by talking to a mortgage broker or a bank, Stubbs and Austin advise. They can look at your finances and help you figure out your price range, and how much you can borrow. Ideally, the bank can get you prequalified or pre-approved, so you can move quickly if the right property presents itself.
When it comes to choosing a real estate agent, try to find someone who is experienced with first-time buyers, and can guide you through the process.
4. Technology is great, but it’s no substitute for hitting the pavement.
Sites like Brownstoner have made it much easier to search for homes and research neighborhoods. But when it comes to buying a new home, you still need to see it in person. This may seem counterintuitive to someone used to shopping, socializing and doing everything else on a smart phone.
“More often than not millennials start researching online six months prior to their planned purchase, without ever having seen a single property during their discovery period,” says Compass’s Sewtz. “At the end of the day, you’re looking for a home, and online floor plans rarely convey what it will really feel like to live somewhere.”
Getting up front and personal will show aspects of condition and location not apparent in a listing. Seeing a number of properties in person will give you a much better feel for what you can really get in your price range.
5. Be patient and persistent.Â
We probably don’t need to tell you that the Brooklyn housing market is tight. If you’re a first-time buyer, there are a lot of people just like you trying to buy here, not to mention people who already own properties and are looking to upgrade.
This isn’t said to discourage you. But you’ll have to invest some time and effort into this pursuit. It can take a while to find the place that’s right for you, and it’s heartbreaking when you find it only to have someone else swoop in with a higher offer.
Just remember that there may be a better deal around the corner, and keep looking. If nothing else, you’ve gained more knowledge and experience, which will help you going forward.
“Your first purchase will start you on a journey into the real estate market,” say Stubbs and Austin. “This first investment will enable the possibility of future purchases and investments as your preferences and needs change.”
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“when it comes to buying a new home, you still need to see it in person.”
God help us all if people don’t have enough common sense to know this already.