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  • Justin D Jenkins

9 Tips For First Time Homebuyers


Homebuying can be a tricky, draining and tedious process. From words we do not understand to lengthy contracts, for someone without any prior knowledge, becoming a homeowner seems to be far-fetched. For New York City real estate agent, Garrick Wade, “Homebuying is always a good option if you’re in the position to do so. I will never advise a prospective buyer against purchasing a home, if they meet the qualifications to be successful in the process.” Garrick says that the low-interest rates are quite impressive right now, and those who can take advantage of them. Wade gave us 9 tips for first-time buyers, to help avoid mistakes that so many make.



Do your own research first


Professionals are always available to help you in every step of the process; however, I

think it’s very important that you do the preliminary work by just scanning the market to

see what’s out there. Write out your vision for being a homeowner, what it means to you

and what you’d like to accomplish with it.


Find a real estate agent


It’s very important to find a real estate agent that you can start building a relationship

with. A good real estate agent will assess your needs and help you understand if

homebuying is the right option for you by laying out the pros and cons. Your realtor

should provide you with the resources to be successful in your home buying process.


Understand your income to debt ratio


This is very important! You should know what your income to debt ratio is before

speaking to a mortgage lender. This will let the lender know you are aware of your

financial situation and serious about the homebuying process. Lenders deal with a ton of people who just like to inquire about financing but aren’t serious so set yourself apart

from the rest. Your real estate agent should be able to connect you to the right lender. I

provide my clients with three options to compare mortgage products.


Choose a Lender


Do not rush this part! Once you understand your income to debt ratio you’re now ready

to speak with lenders to see what will be the best option for you and get a budget in

place. Always ask the lender for a prequalification versus a preapproval. When you

prequalify for a home loan, you’re getting an estimate of what you might be able to

borrow, based on the information you provide about your finances, as well as a soft credit

check. The pre-qualification will also help you decide what loan type will fit your needs.

Also, make sure you consider your down payment! Once you are 100% better to become a home buyer you will complete a loan application for the preapproval which will cover you for about 90 days. Be prepared for some surprising questions that lenders may send your way when going through your financial documents and credit report.


Choose a real estate attorney


Trust your real estate agent with this part. Your real estate agent should be able to

recommend an attorney with a proven track record of success or someone they have

worked with prior. The attorney is very important in many markets though some

markets do not require real estate attorneys to complete a transaction. I always make

sure my clients meet the attorney first before we start viewing properties and putting in

offers. I want my clients to know the team that’s behind them during the process.


Start looking and be mindful of the timeline


Your team is in place, you’ve done your pre-approval, and now you’re ready to get

serious! We all have this grand idea of what we want our first home to be. We want all

the bells and whistles. If you find something that fits all your needs, within your budget,

and you can see yourself happy there then it’s time to put in the offer! This is the part

that most first time homebuyers struggle with ‘making the right decision’, buyer’s

paralysis is what I call it. During this stage, I really step in to help my clients analyze the

pros and cons. This is the time when you’ll depend on your agent the most to advise you

on a strategy to submit a serious offer. Just as you are searching for a home there are

many others searching for homes which means you’re probably not the only person that

will find that home impressive enough to submit an offer. Don’t wait too long! Remember

that all offers are contingent on an inspection.


Getting the inspection


Once your offer is accepted you will need to have the home inspected. Your real estate agent can provide you with an inspector. Your offer is only contingent on the inspection

report. If the report is not to your satisfaction you should revisit your offer with

reasonable ask, request, etc. Your agent should be able to help you with this.



Signing the contract


OK! Your offer is fully accepted and the inspection has been done. Your attorney has

negotiated the contract to your satisfaction. Once the contract is signed you, will be

required to put down an earnest deposit that is returned to you at closing. Sellers can

ask for 10%-20% of the selling price but this is all negotiable.


Timeline to closing


During this process, the bank will have the home appraised, and will continue working on

your file while you wait on your closing date. It is important you do not make any big

purchases that will change anything with your debt to income ratio. Things that can affect your debt to income ratio are applying for new credit cards, buying a car, furnishing the home, applying for a department store credit line, etc. Also, you want to make sure that you do not have any job changes before closing day. It’s important that the underwriter sees no significant changes when reviewing your file for closing clearance.


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