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Patrick Jacques
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www.patricksellsorlando.com
www.patricksellsorlando.com

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Dont forget to write off those moving expenses! Keep your receipts!

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Learn how to get some downpayment money on your next purchase!!
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Eight First Time Home Buyer Mistakes To Avoid!

Buying your first home is an emotional experience. I remember when my wife and I purchased our first home, a townhome, at the tippy top of the market in 2007.

At this time, I was not a Realtor and although buying at the height of one of the most incredible real estate bubbles in history was a rather big mistake, it is not one of the eight big mistakes I will be dissecting today.

In that case, the bubbling new construction agent was doing her part to sell us on “you’d better buy now at this price because who knows when you’ll be able to afford anything ever again!!!”

Which on the surface looked right, prices had been climbing steadily for a while. “What if we don’t buy now?” we thought. Would we ever be able to buy again?

When would buying a home be realistic for us again? New construction in a fantastic area, Oviedo Florida, which is annually rated one of the top places in America to raise a family did not happen very often in those days.

The entire process is exhilarating on the surface, from picking out the floor plan, picking out the lot, to the design studio… What a rush! Coupled with not having to live temporarily at our parents’ house any longer, we really got caught up in the end result and didn’t plan and prepare for what lied ahead as a first time home owner.

Now that I am a realtor and have worked with many first time buyers, in addition to buying another home, I am very familiar with mistakes and hesitations that await those who are looking for guidance during their first home.

1. Not getting pre-qualified or pre-approved.

Before you even get in your car to go look at that first home, almost all realtors will now require a pre-approval letter from a lender before embarking on this journey.

“Well that’s awfully rude” you might be saying to yourself. The truth is, without those documents everyone’s valuable time could be wasted.
You could be looking at $300,000 homes when you’re only approved for $150,000… or … looking at $150,000 when you could be looking at $300,000!

There are two steps to the process;
A pre-qualification letter. This is a preliminary check of your bank statements, income verification, any debts you may have and how much of a down payment you will make. It is merely an estimation of how much a mortgage you can afford. There is no obligation to use this specific lender at this point in time.

A pre-approval. In this step, the lender will perform an official credit check; document your assets, income, tax records, employment history and debts, if any. This process will be more formal and a processing fee will likely be charged. At this time, you’ll get a clearer picture as to how much home you can afford and what your interest rate will be.

I recommend meeting with local lenders in person, not relying on ‘teaser’ rates you may see online. Read the fine print! Those rates are typically reserved for those with 20% down and spotless credit.

These steps prove to the seller that you are committed to the purchase and will be viewed as a ‘stronger buyer’ than someone who has not obtained any loan information.

Additionally, any errors that may be hiding in your credit history will be brought to light. Fixing these mistakes is essential for more reasons than just purchasing a home!

2. Not making a decision fast enough.

So you’re pre-approved and ready to go! Your realtor has set you up on a Multiple Listings Search for everything that you are looking for in your first home!

(Don’t worry; I know you’ve been on Zillow, Trulia and others for months. Soon enough you’ll learn that not everything you saw was accurate)

Once we address those Unidentified Real Estate Objects from the internet, we will visit the homes that meet your criteria.

The thing is; unless this home just came on the market today, someone else has seen it too. Someone saw it this morning. Someone could have seen it yesterday. Or last week, even.

The seller very well could have told their neighbors, friends and co-workers who also may have spread the word of this home for sale for weeks or months in advance.

If you feel like the home has everything you were looking for, make an offer. It’s better to offer and get rejected than not doing anything at all.

I understand you’ll need to think about it, but “thinking about it” should be a few hours, not days. Getting comfortable with the offer making process is valuable as well.

3. Being too picky.
This kind of ties into the previous point that time could is of the essence. Make your decision based on factors that cannot be adjusted; location, floorplan/layout.

No home will be 100% to your liking upon move in.

Updating and upgrading as time goes along is one of the many joys of owning a home!

Yes, it is the biggest investment of your life and you have every right to be 110% satisfied with your purchase. However, don’t let paint or outdated appliances or a messy yard turn your nose up at a potential gem.

If anything, use those as an advantage when it comes to your offer.

Make sure you discuss and understand the weight of the market with your realtor, if it is a buyer heavy, seller heavy or neutral market.
If it is a buyers’ market, you have a better selection to choose from and negotiate with.

If it is a sellers’ market, you won’t be able to look at 27 homes before making a decision.

4 . Submitting unrealistic offers.
When it comes to negotiation of a real estate transaction, there are three main sticking points; List price, repairs and closing costs. Too often, a buyer will want

A) A huge discount right off the top.
B) A lot of repairs to be made by the seller
C) “Can they pay my closing costs as well?”

In a buyer’s market that may work. In many cities around the country, it is very much a seller’s market.

The most common area you will receive the help is in the repair department. The seller may be required to make the repairs for the bank to lend on the property. This can either be done before closing or the money for repairs can be credited back to the buyer at closing.

It is not uncommon to receive help on closing costs if you are submitting a full price offer. Typically, most a seller can contribute to buyer closing costs is 3% of the price of the home. This varies depending on the loan you obtain.

Asking price? Yes, that could be tough to swallow but consider this; you’ll more than likely move before the 30 years of your mortgage is over. You should get some instant equity in the home upon purchasing. And, chances are you will re-finance at some point in your life.

5. Not taking all costs into consideration.
When you get the approval amount from the lender, do not immediately go to Zillow ( I know you want to ) and look to spend every penny of that amount.

If you don’t practice a budget yet, this would be a fantastic time to keep track of all of your expenses. Be prepared for anything that may come your way.

You will need to be prepared to pay for a home inspection, an appraisal, a property survey and loan origination fees. Typically, the only costs you will incur before closing is the home inspection and appraisal.

There are taxes on the home itself which will include taxes on the deed, property taxes to be paid, insurance to be purchased, and possibly Home Owner Association fees that will need to be addressed as well. These amounts all need to be factored in, as they will be due at closing.

You may be thinking to yourself “Wow I may as well just keep renting, there are too many other costs I’m not paying now”. I’m sure you’re paying renters insurance, and your landlord is definitely passing on their expenses to you.
It is just packaged neatly so you aren’t always aware of it. Stop making someone else rich.

Don’t forget- you can write off mortgage interest and other incurred expenses at tax time.

6. Not thinking as a seller.
More often than not, a certain location or layout may resonate with a buyer and they will be drawn to this home, and only this home. Remember, this is an investment!

Think about the home and the area you are in five to ten years down the road.

Check into any large construction plans that may be rolling through your back yard.
How have the schools historically performed? Will this home be desirable in the future? How about the availability of jobs nearby?
What can you turn this home into? Is it small and outdated, and not really capable of being transformed into a more modern house?

7. Buying based on emotion
A lot of times, I will see a buyer outbid on one property and they will lose faith in their dream of owning a home. They might then just want to ‘get it over with’ and buy the next home they happen to see.

Or even worse, they will continue to rent and miss out on the entire opportunity all together.

Stay positive. Good emotion will prevail. There are a lot of people chasing their dreams. You’ll be glad you did once those keys are in your hand.

8. Making huge life changes while under contract
You’ve been pre-approved for a loan. You’ve looked at a few awesome properties. You’ve submitted offers. Some of which may have been rejected, that’s ok. Buying a home is like dating.

Now you have an accepted offer! With money in escrow!

Congratulations!

We are working towards closing…
But then you changed or quit your job.
You opened a new line of credit at a furniture store.
You bought a new car.
You paid off a credit card. Or worse, cancelled a credit card.
If any of these things sound like something you would do, I beg you DO. NOT. DO. THIS.

During the 30-60 days you are under contract, quite honestly, you need to live a very, very strict predictable (boring) life.
You do not want anything to raise a red flag or draw attention to your income, assets or debt.

Your lender wants to see steady, stable income (which is why you had to supply a few months of bank statements). Earning more or less can result can mess up the loan process.

Paid off debt? That could be viewed as fewer assets to pay closing costs and/or mortgage.

Obtained new debt by buying a new car? Please don’t!
Cancelled a credit card? Your credit will take a hit which will most likely affect the purchase of your home.

You should get the picture. Anything and everything should wait until the keys are in your hand after the closing. Then it’s time to celebrate!

You have avoided these common home buyer mistakes and are well on your way to creating lasting new memories in your very own home!



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Take away negotiation power from the buyer with these helpful home selling tips!

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Avoiding private mortgage insurance without 20% down? Fantastic!
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Looking for your opinions on which RE Web designer has created the best ROI.

Easy Agent Pro? Curaytor? RealGeeks? RE Webmasters? Other?

Thanks!

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Well I do know I will buy a hot dog from the cart!!!
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I would love to see you  this Saturday from 12-2pm at the Open House at 453 Fletcher Avenue in Winter Park !   Here's your chance to own in this highly desirable town close to fine dining, awesome shopping, and live entertainment.  Come stop by for a tour of the home, find out what your home is worth and more!  Hope to see you Saturday!   Call me for any further info!  407-491-4799
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I'd love to get into real estate investment some day!
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That home you just saw that you loved!  Someone else saw it yesterday; they loved it to.  Don't hesitate.

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