Advice for Newlyweds, First-Time Homebuyers
Buying a home can be a daunting prospect. For newlyweds, it can be a challenging, new experience for couples making a serious financial commitment together. We asked three real estate brokers to share with us their advice.
What advice do you have for first-time homebuyers?
KMK: The most important step is to choose an agent and broker that you can trust and one that has a track record in your target areas and price range. The number of homes and condos on the market is about 40% less than last year, so it is critical to work with someone who is “ahead of the market” and who can tell you about properties before they go into the MRIS.
You should determine your ideal price range and comfort zone by meeting with a reputable, local lender. Working with Internet lenders can be extremely challenging. It often causes great frustration and can put your escrow deposit at risk. Getting a sense of what interest rate you qualify for will give you a concrete sense of you monthly mortgage payment amount. Also think through, once you buy, what sort of cash reserves would you have on hand.? Can you afford to buy something that needs cosmetic work? Or would you be better off mortgaging a bit more for something more renovated? That will bring additional focus to your house hunt.
Good friends that have been happy with a recent real estate transaction can also be a good source of agent and lender referrals.
RH: First time homebuyers should find an agent whom they are comfortable working with. Asking a friend who has recently purchased property for a recommendation is a good way to start. If they’re moving to a new market, it may be a good time to begin their search online. All good real estate agents post their biographies on their company’s website. Always interview an agent, and try to meet them in person before you make a commitment. Also, every first time homebuyer should meet with a mortgage lender before they begin their search. They are often surprised by how much house they can easily afford with today’s historically low interest rates.
RV: Work with an experienced buyer’s agent, one that understands a competitive market. I would recommend this to all homebuyers, not only first-timers.
How should a newlywed couple begin their search?
KMK: Keep your lines of communication open. Don’t get frustrated by differences of opinion when it comes to home-buying. The important thing is to work with an agent that you both trust and have faith in. Often, I have my clients devise a priority list and weight the items of most and least importance. Then, I suggest that they honor the priorities that the two of them most heavily weigh and always be ready to compromise on the less important items. It is a great feeling when I find the “right” place for them – they know instantly - “this is the one” when they first see the property.
RH: Newlyweds should begin their search by talking with each other. It’s often surprising that new couples have very different ideas of the house of their dreams. They should sit down together and formulate a list of their wants, including style, neighborhood, layout, etc.
RV: Get qualified for a loan. Being prepared and educated about making an offer in this market is imperative, and should always be the first step in searching for a home. Buyers sometimes miss out on a property because they are not prepared to make an offer. You sometimes have to put an offer together within hours of viewing a property. Waiting to get your finances together adds unneeded stress. Getting financially prepared for the process will make it easier when it comes time to decide about financial decisions like price escalations, property inspections and the like.
How should first-time homebuyers figure out their priorities in their search?
KMK: It is a great idea to talk through your list of “must have” and “nice-to-have” attributes of property, and what you are willing to compromise on. It is important to realize that no property is “perfect,” no matter the price. Real estate is an exercise in trade-offs. For instance, to get more space within your budget, you may have to rethink location. Or, if you are set on a premium location, you may have to give up on square footage preferences to stay within the prescribed budget. So, try to keep an open mind, and be realistic.
RH: Figure out your priorities by looking at the way you live in your current house or apartment. Do you ever use the yard or terrace? Is it necessary? What type of kitchen is important, or do you regularly eat out? Prioritize the features of your future home.
RV: If not familiar with the market, their realtor should take them on a tour of target neighborhoods. The buyers should also make a list of features for their ideal property – like distance to the Metro, parking, washer and dryer, then compare. Share the combined lists with their realtor. The buyers should try to be realistic about their buying power in the market.
Do you have any advice for couples moving in together for the first time?
KMK: Be prepared to take a lot of deep breaths and exercise you best patience skills. Also, be prepared to compromise and not have things always be the way you may be used to. It is important to maintain your outside friends and interests, as it will keep your relationship fresh and interesting.
RH: Yikes, I think I should stay away from this one, but it’s probably a good idea to take a good look at your partner, figure out their daily habits and realize that you have to choose your battles carefully. It’s more fun to live with someone than to live alone. Remember this when you’re thinking of starting an argument....by the way I live alone and my dog doesn’t argue.
RV: Patience and consideration. Most cohabiting difficulties are pretty minor but tend to get blown out of proportion. I recommend that people consider shelving their first disappointments, like a wet towel on the bed. Ask yourself, “Is this really worth arguing?” Plan a time to discuss once a week and write down agenda items. The discussion should take place calmly over a coffee. If these items of consideration are handled in a calm manner hopefully the resolution will be swift.
How should couples best take advantage of this real estate market?
KMK: With inventory being so low and demand relatively high, be prepared. Have your finances organized, lender pre-approval in hand, and work with an agent and broker that has a strong footing in the market and can give you advance notice of listings before they actually go onto the public market.
RH: Prices remain at the lowest levels seen since 2002 across most of the country and inter- est rates currently remain at the lowest levels in our lifetimes. This is a great opportunity to enter the market. However, in Washington, inventory is extremely low and a well-priced property will sell within days and often with multiple offers. Be prepared to make an attractive offer if the property you want surfaces. Have your financing in order, your down payment funds available, and be prepared to act quickly. It sometimes takes a new homebuyer losing a deal before they realize the urgency our current market dictates.
RV: Lock in a great interest rate. If not planning to have children in the short term, live somewhere fun. Take advantage of the time you have together before expanding your family and enjoy your free time the way you want. If you run, live somewhere good to run. If you go out, live fairly close to bars and restaurants.
What was your experience buying your first home?
KMK: I was very fortunate to have my real estate agent also be my sister, Eileen McGrath. It was a great experience and she guided me through a successful transaction.
RH: I bought my first home when I was 22. It was a great experience. I renovated a little row house with a lot of blood sweat and tears...liter- ally. But, that little house helped put me through law school when I sold it.
RV: I have bought and sold several properties in competitive markets and my first home was no exception. It was the third house I made an offer on and I got a good deal on an estate sale. My second home had multiple offers, but was still a good deal, and I ended up having to escalate 10% over list price to win.