Welcome to San Diego Blog | May 20, 2019
Thinking of Buying Your First Home?
Perhaps you recently graduated from college and landed a great job. Or maybe you’ve been on your own for quite some time and just realized that all that rent has been helping someone else pay down their mortgage and build equity. You want a place to call your own; a place you can paint, decorate and update your way. But where to begin? Fear not. Buying a home doesn’t have to be complicated or scary. Here’s how to get started and a snapshot of the process that will guide you:
Location. Start here. Where would you like to live? Identify the top three or four areas or neighborhoods that interest you the most. For some people it is critical that they live close to work in order to avoid a long commute. For others, it’s being close to the “action,” like living in downtown San Diego where there are restaurants, bars, entertainment, museums, theaters and parks … all just steps away … not to mention proximity to the San Diego Airport. Maybe you want to be close to family members or good friends. Whatever is important to you, begin with this crucial step.
Property type. Condo? Single family home? Townhome? Try this exercise … Take a sheet of paper and divide it into three columns. The first column is titled “Must Haves.” The second column is titled “Bonuses” and the third column is titled “No-Nos.” In the first column write down the features of the property that you absolutely must have. If you think of a feature that would be nice but you can live without it or add it later, put it in the “Bonus” column. The “No Nos” column is self-explanatory. Begin with the obvious – the minimum number of bedrooms and bathrooms, parking spaces needed, yard versus patio and so on. Picture your ideal home as you work. In less than 30 minutes you will have a working document that will help you get and stay focused when you begin your search. The features that are important can change over time. If you don’t find your ideal home right away, revisit this exercise to see what may have shifted. Search MLS listings as part of your initial “home”work!
Price. What price range? If you’re not sure, see the section on Finances below. The amount you can borrow will often determine the price range in which you will shop.
Finances. Next, determine how will you fund your purchase. You may have enough cash (or access to it) to cover the entire purchase price, plus closing costs. Most first-time home buyers, however, need to borrow in order to make their first purchase. This is where it can be but should not be scary. There are two parts to this second step in the home buying process.
- Loan type: There is a virtual smorgasbord of loan programs out there! Many of them are tailored specifically for first-time home buyers. Some mortgage loan programs feature low or no down payments, along with lower interest rates. Knowledge is power. Take the time to research the programs available and which one or ones meet your needs.
- How much: An excellent lender will help you determine what price range you can afford and what your monthly payments will be. This step in the process is referred to as getting pre-qualified and it is absolutely free. Contact a mortgage lender, bank or credit union. Finding out where you stand financially is quick, easy and relatively painless. The only ‘pain’ is learning that you may have to pay down a little debt or build your credit score before proceeding. Better to know ahead of time, right?
Timeline. When would you like to be in your new home? Sometimes timing is influenced by financial requirements like I mentioned above … the time it will take to pay down debt or improve credit score. Timing can also be influenced by a job, the upcoming birth of a child or other factors. Determining your timeframe is part of the home buying process. Be aware, too, that your timeline can change and frequently does.
Representation. Do you have an advocate? You must have a top-shelf professional who will act in your best interest and help negotiate the best possible price and terms on your behalf. Buying directly from the seller (e.g. “For Sale By Owner”) or through the listing agent is a mistake and can cost you thousands of dollars. This is the single most expensive purchase you will likely make in your lifetime. Take it seriously.
Need more info on the home buying process? I’m here to help. With over 30 years of experience in nearly all facets of real estate, you’re in good hands. Contact me (Arlis) at 619-876-0247 or here: