The Road to First Time Home Ownership
As anticipated the month of March belonged to the first time home buyers. About fifty three percent of all closed sales in the Sunshine MLS were under $200,000. Short sales and foreclosures accounted for about thirty seven percent of the under $200,000 sales.
If you’re considering buying a home in the competitive under $200,000 market or a bank owned property you should first get prepared for the common pitfalls and mistakes made by buyers.
Making an offer without being prequalified – First, if you don’t speak with a lender you will waste a great deal of time looking at homes that you’re not qualified to own. Second, if there is a bank involved with approval of your offer they will likely not consider your offer until it is accompanied by a mortgage preapproval or proof of funds. Yes, you have to prove you can pay for it or get a mortgage.
Not shopping your mortgage and getting the best deal – Every mortgage brokers offer different programs and it doesn’t hurt to ask around. Just remember it’s not solely about the interest rate. If the lender can’t explain, in great detail, all facets and costs of your mortgage you need to move on to another mortgage professional. This loan is going to be long term and mistakes will be costly. There are no mulligan’s in bad mortgage choices.
Sabotaging your credit – If you’re on the verge of buying a home do not make any major financial changes in your life. That means don’t open any new lines of credit; no big purchases, no large sums of money shuffling, make no changes in employment; don’t change jobs and don’t quit your job. The banks frown upon loaning money to unemployed people these days.
Trying to find a home yourself – Find an experienced, committed agent who is also tenacious and responsive. Anyone can buy and sell real estate without the help of a real estate agent but at a competitive price point great deals and foreclosures priced well hit the market and are often gone within the day, frequently with multiple offers. You just can’t compete with technology and the mass of people buying entry level homes at this time. You’ll be looking at the leftovers because the best deals will be swooped up before it even gets syndicated to the web or craigslist.
Bidding on a home before you get a CMA – Sure the home may be a great deal and if you’re expecting multiple offers you need to know the highest price you’ll be willing to bid without making a poor investment. Your agent should be able to give you a range price for the home so that you make the best offer without overpaying.
Buying a cheap house and not a good investment – Price is nothing if you can’t sell the home in the future. You can an ugly kitchen but you can’t fix a highway, huge power lines over head, the convenience store next door or any other incurable defect.
Finally, do not sign any paperwork with a lender, bank or real estate agent that you do not fully understand. If the “deal” gets away from you, there will be another one. The term “measure twice, cut once” isn’t limited to carpentry.
Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area. Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor. If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.
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