Buying

Three Pro Tips for First-Time Homebuyers

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SOURCE: Freddie Mac

As you look to buy your first home, there are special tools and resources designed for first-time homebuyers that can set you up for success.

Buying a home for the first time is exciting — but it can also be overwhelming. Fortunately, there are many education materials, resources and programs available to help make the first-time homebuying experience easier.

Here are three pro tips for first-time homebuyers.

  1. Educate Yourself

    A home purchase is among the largest financial transactions you’ll make in your life. Therefore, it’s important to prepare by learning as much as you can to ensure you’re buying a quality property that you can afford for the long-term. Here’s where to start.

    Complete a free educational offering: Whether you’re ready to buy or still exploring your options, Freddie Mac’s CreditSmart® suite of free financial and homeownership education resources covers everything from building good credit to how to prepare for homeownership.

    Learn common homebuying guidelines: If you are starting your homebuying journey, you’ll want to know how much home you can afford. Understanding the guidelines lenders use to assess your finances and upfront and recurring expenses are important to know before you start looking for homes.

    Use homebuying calculators: Homebuying calculators can provide guidance and financial estimates based on your unique situation. They can help you understand the differences between renting and owning, fixed-rate and adjustable-rate mortgages, and more. 

  2. Find Help from a Housing Professional

    If homebuying is in your plans, you can prepare for successful homeownership by speaking with a mortgage professional.

    Take a class: A first-time homebuying class can be a free or low-cost way to learn more about loan options, the buying process or how to apply for a mortgage. Many financial institutions, community groups or other organizations offer these classes, and some are prerequisites for certain loan programs.

    Speak with a housing counselor: Housing counselors are trained to provide guidance and coaching to homebuyers and homeowners. There are a number of HUD-approved housing counseling agencies that can assess your financial situation and help you create a homebuying plan.

    In addition, Freddie Mac partners with Borrower Help Centers across the country, which are staffed by HUD-certified housing counselors who offer a free suite of financial education and homebuyer-readiness services. 

  3. Learn about Programs for First-Time Homebuyers

    First-time homebuyers may be eligible for programs that can make homeownership more achievable and affordable. These programs often offer income-based eligibility and low down payment options.

    First-time homebuyer grants: Depending on where you live, many states and municipalities offer first-time homebuyer grants — which may not need to be repaid. Additionally, you may want to take advantage of down payment assistance programs to reduce the amount you need to save for a down payment or funds to close on a home.

    Low down payment loans: Talk to your lender about whether you qualify for mortgage programs that have low down payment requirements. For example, Freddie Mac offers three mortgage programs that require lower down payments.

    • HomePossible® Mortgage: Designed to help low-, very low- and moderate-income homebuyers, this program only requires a 3% down payment and can be used by first-time homebuyers. In some cases, eligible borrowers can qualify for a HomePossible mortgage without a credit score. 

    • HomeOne® Mortgage: HomeOne mortgages are for all types of single-family homes, including townhomes or condos. At least one of the homebuyers must be a first-time homebuyer. HomeOne mortgages only require a 3% down payment.

    • HFA Advantage®: This program is offered to individuals who qualify for homeownership programs at housing finance agencies (HFAs). The program can be used by first-time homebuyers.

Talk to a lender or housing counselor about available down payment and mortgage options, and down payment assistance programs,

SOURCE: Freddie Mac

Helpful Negotiation Tactics for Today’s Housing Market

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If you haven’t already heard, homebuyers are regaining some negotiating power in today’s market. And while that doesn’t make this a buyer’s market, it does mean buyers may be able to ask for a little more. So, sellers need to be ready for that possibility and know what they’re willing to negotiate.

Whether you’re looking to buy or sell a house, here’s a quick rundown of potential negotiations that may pop up during your transaction. That way, you’re prepared no matter which side of the deal you’re on.

What Can You Negotiate?

Most things in a home purchase are on the negotiation table. Here’s a list of just a few of those options, according to Kiplinger and LendingTree:

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  • Sale Price: The most obvious is the price of the home. And that lever is being pulled more often today. Buyers don’t want to overpay when affordability is already so tight. And sellers who aren’t realistic about their asking price may have to consider adjusting their price.

  • Home Repairs: Based on the inspection, a buyer is within their rights to ask the seller to make reasonable repairs. If the seller doesn’t want to do that, they could offer to reduce the home price or cover some closing costs, so the buyer has the money to take them on themselves.

  • Fixtures: Buyers can also ask for appliances or furniture to convey when the house changes hands. Having the seller throw in the washer and dryer cuts down on expenses the buyer would have when moving in. As the seller, you could leave your existing ones behind to sweeten the deal for your buyer, and get yourself new ones for your next place.

  • Closing Costs: Closing costs typically run about 2-5% of the home’s purchase price. Buyers can ask the seller to pay for some or all of these expenses to offset the cash the buyer has to bring to the table. 

  • Home Warranties: Buyers can also ask the seller to pay for a home warranty. This is great for buyers worried about the maintenance costs that may pop up after taking possession of the home. And since this concession usually isn’t terribly expensive for the seller, it can be a good option for both parties.

  • Closing Date: Buyers can ask for a faster or extended closing window based on their own timetable. The seller can also advocate for what they need based on their move to find the right compromise.

One thing is true whether you’re a buyer or a seller, and that’s how much your agent can help you throughout the process. Your agent is your go-to for any back-and-forth. They’ll handle the conversations and advocate for your best interests along the way. As Bankrate says:

“Agents have expert negotiating skills. Without one, you must negotiate the terms of the contract on your own.”

They may also be able to uncover what the buyer or seller is looking for in their discussions with the other agent. And that insight can be really valuable at the negotiation table. 

Bottom Line

Buyers are regaining a bit of negotiation power in today’s market. Buyers, knowing what levers you can pull will help you feel confident and empowered going into your purchase. Sellers, having a heads up of what they may ask for gives you the chance to think through what you’ll be willing to offer.

Want to chat more about what to expect and the options you have? Connect with me today.

SOURCE: Keeping Current Matters

What’s More Important: A Large Floor Plan or the Right Layout?

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SOURCE: Realty Times

More. More. More. That’s what we want in life, and certainly in a home. Right? We’re conditioned to reach for the stars, and, in the real estate world, that means going for the biggest home you can. But is bigger always better?

Yes, price-per-square-foot is an important factor in determining the value of a home. But it’s not the only one. 

The reason why the price per square foot method is a poor method to determine market value is because every home is different. While homes are similar in terms of square footage, number of bedrooms, number of bathrooms, and location, there are so many factors that aren’t taken into consideration when using the price per square foot valuation method. Condition, upgrades, is there a garage, screen porch, elevator, etc.

These tips will help you see past the square footage to find the home that works best for your needs and your budget.

Don’t get hung up on a number

Unless your real estate agent has been specific about a certain size home—perhaps homes under 2,500 square feet take three times longer to sell than larger homes in your market, for instance—getting a number stuck in your head may not make sense. An 1,800-square-foot new construction home may feel larger than a 2,300-square-foot home that was built 50 years ago because the floor plan is open and airy, and it might end up being the better buy. 

But make sure there’s room to grow

You do want to look carefully at the space the home offers, however. It’s easy to get seduced by a well-staged home, and, especially by a model that’s been all decked out. If you have young kids or are growing your family, you’ll want to make sure you’re not already maxing out the space. 

It’s also important, especially in model homes, to take a good look at the furniture they have used. It may seem like living spaces or bedrooms are larger than they actually are because the furniture is sparse or undersized. Don’t be afraid to get out that measuring tape.

Does the floor plan work for your lifestyle?

There may be lots of space to work with, but is it usable? A formal living room and dining room can add significant square footage, but if your family is more likely to gather around the kitchen island or breakfast nook for meals, and in the family room to watch movies, these spaces may just be wasted. A smaller floor plan that is more open may end up working better for you. 

Pay close attention, also, to things like master bedroom retreats. Spaces like these do add square footage, obviously. And, they can also appeal to that part of you that dreams of relaxing at the end of the day with a book and a glass of wine. But, in reality, it will probably end up being a big, expensive place to pile up clean laundry. 

Carefully examine floor plan configurations when looking at new construction; Some builder options are better than others. One particular floor plan in a new community in Texas has had people talking. The builder of the 2,250-square-foot model offered a split garage, with two garage bays on one side and a one-car garage on the other. Buyers could then option the one-car garage as a bonus space. 

Most of the buyers of this particular model chose the bonus space. However, because of the configuration of the home, this space can only be accessed through the master and master bathroom. It might work as a nursery, but when the child is older, it’s not all that convenient to have their bedroom in a location that can only be reached if you walk through the master and the master bath. Some owners have turned the space into a home office space or a retreat, and many have, again, a big, expensive space to fold their laundry. 

Most important: Despite the fact that the homes with the bonus space have more square footage, sales prices have been comparable to the same model that has the third garage bay. In this case, having a three car garage is often preferable to a weird bonus space with limited usage.

SOURCE: Realty Times

Top 4 Things Every New Homeowner Should Do

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SOURCE: Freddie Mac

Along with the excitement and pride of becoming a homeowner, this new chapter also comes with a new set of responsibilities. To set yourself up for success in your home, here are four things you should do now that you’re a homeowner.

  1. Save Your Important Documents

By the time you’ve closed on your house, you’ll have accumulated a lot of paperwork from the homebuying process. It’s important to keep diligent records of these documents, including:

  • Lender contact information. 

  • Appraisal report. 

  • Property survey. 

  • Inspection report. 

  • Final closing documents. 

  • Insurance documents. 


Consider making copies of these documents readily available, then store the original documents in a secure place, such as a fireproof safe. 

Additionally, keep records of any home improvement projects you make. Having these files accessible will save you time and money if you decide to refinance or sell your home down the road.

2. Set Up Your Utilities

Contact your local utility companies as early as possible to avoid any lapse in service when you move into your new home.

The five basic utility services you’ll want to make sure are connected in your name by the time you move in are:

  • Electric.

  • Water and sewer.

  • Gas.

  • Waste disposal (trash and recycling).

  • Cable and internet.

3. Update Your Address

To avoid any confusion and inconvenience, update your address with these places around the time of your move:

  • The United States Postal Service (USPS). The USPS may be the first place you’ll want to notify of your change of address. The post office will hold your mail while you are in transition and then forward your mail from your old residence to your new one for 12 months. 

  • The Department of Motor Vehicles (DMV). Whether you move to a new state or not, you’ll need to update your driver’s license and registration address. You may be required to do so with within a month or two after you move. Check the laws in your state to be sure. 

  • Voter registry. When you move addresses, it could impact what voting district you’re in and which polling location you will use on election day. Check your district information to see if you need to change your voter registration.

  • Subscriptions and online deliveries. Tracking down a package can be a major headache, so be sure to update your address if you receive any automatic deliveries. 

  • Financial institutions and credit cards. To prevent missed payments or lost statements, update your billing address with banks or credit companies where you are an account holder. 

  • Your employer. Ask your employer to change your home address on your W-2 so that the form doesn’t get lost at tax time. 

4. Inspect and Secure Your Home

As you move in, make sure you’re prepared for an emergency by planning for the unexpected and checking these items off your to-do list: 

  • Locate the water shut-off valve and the fuse box. In an urgent situation, you don’t want to be searching for these. Know how to turn off the flow of water and where to restore the flow of electricity if the power goes out. 

  • Change the locks. Make sure you are the only one with keys to your home. If you also have a keypad, reset the code. 

  • Locate and test smoke detectors. The U.S. Fire Administration recommends testing your smoke detectors at least once a month and replacing the batteries once or twice a year. 

  • Create an evacuation plan. Identify possible evacuation routes from each room in your home in the case of an emergency. Be sure to discuss your emergency plan with all members of your household. 

  • Set aside emergency funds. It’s recommended to set aside between three to six months of living expenses for unexpected emergencies. If you’re faced with something like an unexpected major home repair, you’ll be glad to have funds already set aside.

SOURCE: Freddie Mac