Money Matters – Are you thinking of buying your first home?

The biggest challenge that first time home buyers have is that they are bringing less cash to the table, i.e. have a lower down payment than other conventional buyers and therefore it makes it harder to compete who have a large down payment.  Should this really make a difference – really no.  The issue is that most real estate have this preconceived notion that a buyer with a low down payment is less likely to obtain financing or for that matter complete the transaction.  That is completely false.  I have found that buyers that have very large down payments and/or all cash buyers are less likely to close as these buyers are more seasoned and though committed to buying a house have no problem in cancelling during their due diligence period and “bolting” to the next great deal they find. To compete against this the best thing for new home buyers is to be flexible in their demands, i.e. make the close of escrow convenient to the sellers, give them a “rent back” if needed, give them more a couple days to move out. This will place the decision making process more in the hands of the sellers and the therefore the buyer has a better chance of getting the house.
The 2nd most important thing that a first time home buyer can do prior to looking for a home is get their financial house in order.  What I mean by that is clean up their credit!  So many first time home buyers come in and though they think their credit is fine a single collection account or “slow pay” i.e. a 30-day late can effect one’s credit substantially.  One 30-day late that cause one’s FTCO score to drop as much as 50 points.  This can cause the buyer’s rate to go up, possibly a larger down payment needed which results in the buyer not qualifying in the price range that based just on his/her income they would qualify for.  The process in cleaning up ones’ credit can take 45-60 days or longer thus delaying the home buying process.  For conventional financing in order to get the best possible financing available a 740 FICO is needed.  For FHA financing a 680 FICO will get you but you have mortgage insurance no matter what the down payment is but is an excellent alternative in obtaining financing if the credit score is an issue.
The 3rd best thing to do for the first time home buyer is start the pre-approval process right away. Go sit down with a mortgage professional and find out what you need to do before you even go look at homes.  We have had client that have come to us and through our mentorship worked through the process of getting better credit, start a savings regime, and several months later come back and they are ready to buy!  We only take potential out a 2nd time if they have submitted an application to our “in-house” and gotten pre-approved.  Other realtors, in this community, knows that when they receive an offer from Oak Tree Realty that the buyers have been thoroughly “vetted” and will, be able to complete the purchase transaction.
The next step in this process is to find a great buyer’s agent/advocate that is going to work tirelessly in finding you a home that is not only a good investment but that is “safe and sound” for one’s family. One needs to only read the reviews we have from past buyers that we have helped to how great our client value the high level of our professional service. www.redfin.com/real-estate-agents/douglas-melanie?show=reviews&star=all
The “Early bird gets the worm” when it comes to real estate is definitely true.  Most of the homes that my clients over the past several months, where it has been a sellers’ market rather than a buyer’s, we found, previewed, and wrote an offer within 72-hours of that home being on the market.  If my clients are familiar with the neighborhood, the model, and have done their due diligence on the internet in researching that specific property – we will even right an offer, pending physical inspection – if for some reason my clients can’t get out right away to see the property.  We set our client up on the “civilian” version of the multiple listing service so that they get emailed to them the new listings, that fit their specific search criteria as soon as they come on the market.
The last thing that I will discuss that a buyer can do is be flexible.  Make sure you agent asks the following question to the listing agent prior to writing the offer.  “What can my clients do to accommodate your seller(s)?”  We recently were able to get a property on behalf of our clients as we had overheard while previewing the home that the seller(s) were going to need some time after the close to do what is called a “rent back”, i.e. rent the house back on per diem basis for the buyer’s Piti payment.  We wrote it into the offer and the seller(s) were so impressed that my clients were able to accommodate their needs that they accepted our offer.
For more information, please call Douglas J. Sedam at 1-866-549-3900, 661-295-2400 #1 or email: Doug.Sedam@ThePaseoGroup.com.  You may also learn more at www.ThePaseoGroup.com.
Securities and Investment Advisory Services offered through Financial West Group which is a member FINRA/SIPC. OSJ Office: 4510 E. Thousand Oaks Boulevard, Westlake Village, CA 91362, Phone: 1-866-502-8929 The Paseo Financial Group, Inc. and Financial West Group are unaffiliated companies. The Paseo Financial Group, Inc. encompasses the following companies: The Home Loan Pros – Residential, Investment, & Commercial Real Estate Mortgages; Oak Tree Realty – Residential, Investment, & Commercial Real Estate Sales; and The Financial Services Pros – Investments, Insurance, & Retirement Planning.