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Answering all those burning questions you didn’t know you had about home ownership.

First Time Home Buyers

Picture of Jessica Dabkowski

Jessica Dabkowski

Helping you with all things homeownership!

Today I have FTHBs on my mind – first time home buyers, that is. In some sense, even buyers who have purchased before are similar to FTHBs. I mean, do you really remember the specific ins and outs from the home purchase you completed eleven years ago? Probably not.

Let’s take a journey through starting the home-buying journey through the lens of the FTHB, shall we?

Gateway to Entry

Okay, Dabs, let’s see some houses! Well, hold up there, partner. There’s actually a step or two before we start actively touring dreamy homes.

Game Day Not so Fast my friend Meme

I (generally) do not show homes to buyers unless they have been pre-approved or have proof of funds. “Why?” you ask. This roadblock can be very frustrating for first time home buyers. Let me explain.

Three reasons:

  1. The buyer needs to know exactly up to what price they are qualified to purchase. Finding out you cannot qualify for the loan on your dream house is a devastating situation.
  2. Would you, as a seller, want a person who may not be qualified to purchase traipsing through your house pulling a looky loo? Probably not.
  3. If the buyer isn’t willing to get pre-approved, they are possibly wasting my time. I cannot submit a serious offer unless the buyer is pre-approved. If I can’t submit an offer, I can’t get paid. At the end of the day, I’m a business owner so I have to be comfortable that I am working with a serious buyer.

One exception I will make is for new construction. If you are interested in visiting a model home to decide if you would like to pursue it, we can do that. Builders often have special lender relationships which can provide additional incentives to home buyers, so it doesn’t always make sense to get pre-approved through a different lender.

Getting a PAL

The first step once you are serious about purchasing a home is securing a loan pre-approval or a cash proof of funds. Why is this step so important? Because in my local market, and almost every market across the country, you need to submit documentation with your offer demonstrating you are able to complete your offer to purchase. For those lucky buyers forking over cash, this is a “proof of funds” document. For the other 80% of buyers, this documentation will be a mortgage pre-approval letter (PAL).

Home Alone 2 movie robbers say to Kevin "hiya pal"

The PAL demonstrates to a seller that you have been vetted by a lender and are qualified to submit a purchase agreement for the home. That lender has pre-approved you to purchase up to a set amount based on your credit score and financial profile. The important components are that the lender has done a hard pull of the buyer’s credit score and completed basic verification of income, assets, debt, etc. If you are run through underwriting in advance, all the better! You can read more on this topic in 7 Tips for Choosing a Lender.

Know Thy Budget

You would think I would have the budget section before the pre-approval. However, the lender will provide you a max purchasing budget. For most of my buyer clients and especially first time home buyers, the pre-approval maximum is not the amount they end up spending. What you want to afford is often different that the loan guidelines say you can afford. If you still want to purchase groceries and take a vacation once in awhile, you should choose a budget which allows you to achieve those goals. (I would argue both sustenance and beaches are important.)

You need to be extremely comfortable with not just your your monthly mortgage dollar amount, but also with taxes, insurance and closing costs. You should also have a slush fund set aside in case you need additional funds during the move-in process. If the house you buy needs immediate work, such as a new furnace, you’ll want to ensure you have a way to fund those repairs.

Most lenders will quote you a monthly payment which includes mortgage principal and interest, taxes and insurance. Closing costs include money you pay to the title company for services, to the lender for setting you up with your loan and some other miscellaneous costs. You are entitled to know and understand these cost estimates up front and you absolutely should understand how much cash you will need in your bank account to be able to close on the purchase of your home.

Getting in the Game

Okay, you have your PAL and you have a budget. Now we can hit the streets.

West side story gang members snapping fingers and dancing in alley
This is how I imagine us hitting the streets.

Your agent will always need to make an appointment in advance. Sometimes advance means 48-hours notice; sometimes it means 3 minutes. It depends on whether the home is occupied/vacant and how the seller wants to handle showings.

You should only be entering a showing during your scheduled time. If you enter the home outside that window, you are TRESPASSING. Yes, you are entering a home without permission. This includes entering late, so arrive on time. Many sellers in my area restrict visits to 30 minutes, which doesn’t give you a lot of leeway to see the property if you arrive late.

Wear shoes with socks because many of the homes will require you to remove your shoes. Some listing agents provide a crate of shoe covers, but most do not (I bet you can guess which agent you know and love always provides a crate of booties in her listings . . .). If my client has a preference for shoe covers, I bring them. However, I have found most people would rather just slip off their shoes (including me). Now if we are in a home which is dangerous or disgusting (cat pee houses comes to mind), we’re all leaving our shoes on.

Showing Protocols

I advise my buyers to always assume there is video/audio surveillance in the home. Do I sometimes forget? Uh-huh. Will you sometimes forget? Yup. But, let’s at least try not to get the sellers riled up by noting their house smells like old cabbage or tip your bargaining hand by rhapsodizing about how you “absolutely positively must have this house no matter what it costs.”

Hamilton play Aaron Burr saying "talk less" to Hamilton who says "What?"
Me, to buyers

The other major takeaway is to treat the seller’s home with respect. When The Mathematician and I sold our first home, there was disrespect from some of the parties who came through our home. A buyer or agent when into my closet and touched a bunch of my work dresses. Someone other than my orderly self handled them. Someone else tried to wedge themselves behind a piece of furniture and managed to gouge a line in the wall. I carry this experience of mild violation with me and have a low tolerance for buyers venturing into anything that is not strictly part of the home available for purchase. (On the flip side, I recommend my sellers to lock up or remove anything dangerous or of value – jewelry, cash, guns, prescriptions, etc.)

Our main goal when we’re in the home is to determine whether the home will work for you. How is the layout? Where would your television go? Is there anything glaringly broken, leaking or unsafe? Is the amount of work needed congruent with the time or money you are willing to put in?

We’ll leave our first time home buyers here for now, but I hope this gives you a peak into those first tentative steps into the housing market as a buyer. It is an exciting time, and I love helping buyers through this process.

As always, I’m here if you need any assistance in wrangling your current or future home. Reach out to me anytime!

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