Tag Archive for: First-Time Homebuyers

First-Time Homebuyer Advice: Navigating The Purchase Process

Buying a home today is more complex than it was five years ago, as the market was gaining intensity – favoring sellers and their interests. Despite the pendulum shifting in the direction of homebuyers, there are those who are overwhelmed by the intricate process of a home purchase. Yet, some of the most intimidated are first-timers, who have never pursued homeownership before. Luckily, there are several programs available that can provide assistance to make this journey a little easier for first-time homebuyers. Below, we’ll attempt to present some of the challenges, resources available and the steps one should take as they seek homeownership for the first time.

The current market presents a myriad of challenges for first-time homebuyers. With rising home prices and limited inventory, finding an affordable home can be daunting. Buyers are still over-bidding now and again, and coming up short in multi-offer situations. In Pennsylvania, home prices have continued climbing, with a median sales price of $216,249 (up 4.2% year-over-year). A housing supply issue exists in the state as well, listings are down 23.4% year-over-year.* Additionally, competition from cash buyers and investors can make it difficult for first-time buyers to secure a home. Furthermore, strict lending requirements and high down payments can also pose challenges for those looking to purchase. The latter might not apply unless loan options such as FHA, VA, USDA and the like are not a possibility. To account for these challenges, first-time homebuyers should do thorough research, work with a trusted REALTOR®, and if they’re serious about shopping for a home in the current climate, be ready to make competitive offers at a moment’s notice. It may also be helpful to consider alternative financing options and be open to exploring different types of homes or different areas (i.e. alternate school districts, check out rural living over suburban or city living).

There’s good news for those who may have been classified as first-timers in the past, but haven’t purchased a home in over thirty-six months. They would likely be labeled as first-time homebuyers once again. In the industry, lenders do have various indicators, differentiating themselves from others in the business. These requirements for buyers can vary from institution to institution. Some of the typical criteria for first-time buyers includes a steady income, where a job history of two or more years must be validated, a clean credit history, a credit score of 620 or more, a debt-to-income ratio below 43% and a loan down payment of at least 3%. Furthermore, if you presently own a mobile home or have owned one within that three-year window, lenders will often grant you first-time buyer status since the rules for mobile-home ownership are unique.

Education in life goes a long way, and prospective buyers would do well to study up. The best way for first-time homebuyers to get educated on available programs is to do their research. First, talk to your real estate professional. An experienced REALTOR® has dealt with your situation before or one that was similar. Your agent will provide you with a roadmap of several avenues to follow, including homebuyer education classes/seminars as well as utilizing various online resources. These services can help buyers figure out their loan options by providing information on different mortgage programs, down payment assistance programs and other financial assistance options. It’s important for first-time homebuyers to take advantage of these resources to ensure they make informed decisions and find the best program for their individual needs. In Pennsylvania, there are programs geared toward assisting first-time homebuyers such as the Keystone Home loan program, the Keystone Advantage Assistance loan program and the HOMEstead program, just to name a few. Each state has programs in place to assist those who can qualify as first-time buyers. Moreover, there are local programs, such as NeighborWorks, who support buyers as they journey toward homeownership.

Buyers should expect help from their REALTOR® as it pertains to available first-time homebuyer assistance programs. After all, that’s the support real estate professionals provide – to counsel their clients in making the best decisions at each stage of their progress. If their agent doesn’t have the answers, they’ll direct them to the experts who do. These assistance programs can be complicated to navigate, but REALTORS® have the knowledge and expertise to guide buyers toward success. They can provide information about the eligibility requirements, the application procedures in addition to the potential benefits of these programs. They can also assist with finding the right program for a buyer’s specific needs and helping them gather all the necessary documents and information. With their lead, buyers can feel more confident and informed about taking advantage of these valuable resources to make their dream of homeownership a reality.

First-time homebuyers, listen up! As thrilling as it is to finally have a place to call your own (and it is), it’s important to manage your budget wisely and ensure you can qualify for a loan. Trust us, you don’t want to end up house-rich, cash-poor, where you’ve pumped all this equity into your home, but you’re struggling to pay your bills month after month, and regretting the decision you made to purchase. Before you buy, do a test run and start by setting a realistic budget and stick to it. Consider all expenses, including homeowners insurance, taxes, mortgage insurance (if applicable), utilities, maintenance and other debts you may have. When the time comes to acquire a loan, do your homework and shop around for the best interest rates and programs to suit your needs. Don’t immediately settle on the first lender you encounter. Don’t be afraid to negotiate and be aware of any hidden fees (such as points). Remember, a little bit of budgeting and savvy negotiating can go a long way in making your dream home a reality.

The good news is more help is on the way for homebuyers. The day when buyers can pay market value for a home without constant interference from other buyers or pay below market value in efforts to get a deal will become a reality once again. A time when buyers won’t feel rushed into making hasty decisions about homeownership is on the horizon. In the meantime, do your search and thoroughly understand all aspects of homeownership before making any decisions. With the right guidance and resources, purchasing your first home can be a rewarding and exciting experience. Happy house hunting! Take a look at our houses for sale in Clarks Summit PA.

* Latest Pennsylvania Association of REALTORS® Housing Report – Sept 2023

Other first-time homebuyer resources:
8 Steps You Should Take When Purchasing Your First Home
First-Time Homebuyer Tips

/by

Purchasing Your First Home? Here Are 8 Steps You Should Be Taking Along The Way.

If you’ve entered the world of real estate as a first-time homebuyer and your head is saturated with questions, then acknowledge that you’ve come to the right place. If the whole process of searching for and purchasing a home has you feeling batty, then be relieved to know you’re completely normal. There are many steps, which you undergo as a buyer, many of which you’ll discover below. If this is your first-time buying a home, we suggest the followings steps as you move forward. Remember, we’re always standing by to provide any assistance you might need.

Commit to the purchase

Sometimes those uncomfortable feelings creep up as you embark on the buying process. These feelings can certainly be good as you want to make sure you’re ready to buy. It is, after all, a large investment you’re undertaking. Homebuyers of all stages in life, but especially first-time ones, should review their financial situation and see how much home they can actually afford. Evaluate factors such as your monthly income and expenses. During this process you’ll also want to bear in mind your debt as well as your credit scores. What are other important benchmarks while evaluating your finances? Saving up for a down payment, having a stable salary, having an emergency fund and knowing you won’t have to move within five to seven years or less make judging if now is the right time to buy a little easier. When you’re serious about purchasing a property, have funds set aside for a down payment, closing costs and other related expenses.

Stay up to date with your credit score

As mentioned above, this a step not to be overlooked. In the months leading up to your home search, stay on top of your credit. Mortgage lenders like to see consistency and predictable behavior patterns from potential buyers. Paying your bills on time is critical, therefore make every effort to do so. Another thing you’ll want to keep tabs on is your credit utilization ratio. This is generally defined as your total credit used versus your total credit available. The lower, the better, and aim to stay below 30%. Your credit history (average age of your credit), new lines of credit and a mix of credit can also affect your score, and in turn, mortgage approval. Speaking to a lender about these things will help provide you context and give you direction as you journey toward homeownership.

Seek out a lender and preapproval

Another consideration to take into account is obtaining mortgage pre-approval. You’ll want to minimize any surprises as well as show the seller you can afford their property. By getting pre-approval for a mortgage and knowing you can purchase a home in a certain price range, you’ll have a clearer picture of your purchasing power. It’s imperative to understand how much home you can afford from the start. This will give you confidence when submitting an offer to a seller, through your real estate professional, once you’ve found the right property. Seek out the expertise of a few different lenders, including at least one local bank. You want to land the best deal, so don’t settle for only one quote. See what interest rates they’re offering and how that will affect your payment. Adjusting the down payment, amount borrowed and the loan term will also affect your monthly principal and interest payment. The lender you choose will also analyze your debt-to-income ratio to see what loan programs you’re eligible for. Popular loan options include: conventional, FHA, VA and USDA.

Wish list

As you begin to assemble your wish list — exciting, isn’t it? — it’s crucial to consider any needs you currently have and any future ones you might be able to anticipate. Create a list and prioritize your needs over your wants. What is essential for you and your family? Think about size, layout and other features. Your research will expose you to different neighborhoods and school districts. Consider your proximity to good schools and amenities that might be of value to you.

Choose a qualified buyer’s agent

This is why it can be beneficial to work with a real estate professional who has a thorough grasp on local market conditions and is very informed about the area you’re interested in. Never underestimate the benefits of teaming up with a REALTOR® or real estate agent, who will represent your best interests and guide you through the buying process. A buyer’s agent will assist you in your search, direct you through showings, offer you sound advice, help you submit an offer, negotiate with the seller, anticipate the next steps, leading you to settlement and beyond.

Home inspection and negotiation

Once you believe you’ve discovered the home, which is a good fit for your situation, it’s important to conduct a thorough inspection with a properly licensed home inspector to identify any potential issues or problems. This can help you negotiate repairs or price adjustments before finalizing the purchase. Remember, when you write up an offer, you can negotiate a number of items other than price, such as repair work or renovations to be included/completed prior to closing.

Under contract

If you’re uneasy about signing a contract, such as an agreement of sale or buyer’s agency agreement, review the documentation with your agent and seek other legal advice, if necessary. It’s important to review all documentation, including the mortgage terms, homeowners’ association (HOA) rules, if applicable, and all other legal obligations related to the home.

Closing costs

It’s easy to forget these upfront expenses as you set sail toward homeownership. In exchange for the services provided by your lender, attorney and/or title company, you’ll need to pay costs for inspections, appraisal fees, title insurance, attorney fees, transfer tax, etc. at or before closing.

Overall, the homebuying process is exciting, but it can be challenging, notably if it’s your first-time. Taking these steps and considerations into account will encourage a smoother homebuying experience.

If you’d like to review these tips as well as download our guidebook for even more strategies in homebuying, click here.

Visit our first-time homebuyer page for more information.

/by

3 Things to Know Before You Buy Your First House

So you’re ready to buy your very first house! While becoming a homeowner is an exciting journey, there’s much to consider and prepare before you actually buy a house. Your life plans, career, finances and preferences in a home will all be factors that affect the kind of house you can buy as well as where you’ll want to live. To help you navigate all these factors, read on to learn about the three most crucial considerations when buying your first home.

Money Matters

Buying a house is no small endeavor, especially when it comes to money. You’ll want to start saving up as early as possible so that you can afford a down payment. However, after that, chances are you’ll need to get a mortgage to pay for this house over time. A common plan of payment is a 30-year fixed mortgage, which holds fixed principal and interest rates, meaning you’ll pay the same amount over the life of the loan (30 years). This is one method of paying off a mortgage, so do your research and discover what works best for you. There are other mortgage options available too such as FHA, VA, among others.

Additionally, you will want to take a close look at your finances, specifically credit and debt, as these factor into your mortgage eligibility and interest rates. When making moves to purchase a house, you’ll want to ensure that you’ve paid down as much debt as possible and that your credit score is the highest it can be. Avoid other large purchases and refrain from switching jobs during the home buying process as well.

Your Future is a Long-Term Game

Your future plans should be taken into account before you buy a house, as you’ll likely live in this house until your mortgage is paid off. Will you need to pay off any past loans, like car payments or student loans? If so, you may want to research or consult a financial planner on how to juggle paying for multiple long-term payments.

Do you want children in the future? Do you think you’ll help pay for your children’s college education? Although that may be years into the future, it’s crucial to consider everything you might possibly be paying for. Many financial aspects like paying off a mortgage or college tuition are a long-term game, so starting a college fund when you decide to have children is a great way to prepare financially for the future. It can be taxing to pay for several significant costs like college tuition and mortgage payments at the same time, as well as any other loans.

Needs Come Before Wants

Next, you’ll want to consider what you need and what you want in a house. Perhaps you need at least three bedrooms or even more if you plan on starting a family. You may need an open concept floor plan with ample room for seating, for example, if you like hosting. If you have a dog or plan on getting one, a backyard is a great asset to have. If you are self-employed, a house with enough room for a home office is necessary, so read our tips on launching a home-based business while moving to a new home.

You will also want to think about where you’ll want to reside. Depending on the state or city, houses will vary in cost. If you want a house in a large city, it’s going to cost more than a house in a very rural area. Explore and research the cost of living in different areas and what will work best for you. Remember the difference between needs and wants, as your very first house might not have everything you dreamt of. Luckily, you can always renovate or add on to your home in the future to make it your perfect home. Maybe flex space is an option for you?

 

Purchasing your first house is quite an accomplishment, but a lot of preparation and financial planning needs to be done beforehand. By considering these three factors, you set yourself up for a smooth homebuying process.

/0 Comments/by

Best Month To Sell Your Home

,

Homeowners are incentivized to sell, if they’re in a position to do so, as we set sights on the spring housing market. It’s no surprise that last year was a stellar year for homebuying and selling. Unfortunately, many were left on the sidelines, especially first-time buyers who only had FHA loan approval or were relying on a more limited down-payment as they pursued homeownership. Often investors beat first-timers to the punch, swooping in and snatching up available homes for sale. The challenges still exist. You need only ask those who are still looking to buy.

Persistent low supplies, even locally, have driven up home prices. Fueling the fire was 2021 with its record-breaking growth in the housing sector. Appreciation in home prices was high at the start of the year and accelerated even higher by year’s end. “Price appreciation averaged 15% for the full year of 2021,” which was more than double the prior year.

Sellers who can afford to sell, and we use that term “afford” loosely, should do so. If you’re a homeowner thinking about selling, is there a better time of the year to put your property on the market? Is there an optimal time to sell? Is there a month or a very specific time of the year where a seller would be in a better position than if he/she waited? These are great questions. New and sold listings in our market will shed some light on this discussion.

New Listings in the Greater Scranton Board of REALTORS®
2021 2019 2018
February 172 244 228
March 267 324 320
April 330 400 364
May 387 432 448
June 374 381 434
July 368 360 387
August 397 331 353
September 329 329 313

*GSBR statistics 2018-2021

Sold Listings in the Greater Scranton Board of REALTORS®
2021 2019 2018
February 157 159 138
March 243 180 187
April 248 203 168
May 262 250 258
June 312 240 214
July 294 270 240
August 313 265 285
September 298 228 225

*GSBR statistics 2018-2021

The COVID-filled year of 2020 was a tale of two markets, an extremely silent one as well as a vigorous one beginning in June of that year, and therefore, we skipped it for obvious reasons. But the patterns of three of the last four years show a trend. New listings entering the market peaked in May/June and sales hit their highs in July/August. And this correlation between sales and listings is logical with an estimated forty-five to sixty days to close for properties in our market.

It might be advantageous for prospective sellers to circle the month of March on their calendars. Next month you say? Yes, March is the perfect time to list! ATTOM data would also suggest March or perhaps even April is the best time to put your home on the market. May and June experience the highest returns for those looking to make a profit in selling their property. But don’t sweat it, if you’re not ready to go in March or April, you might be able to catch some of that buyer activity during the summer months.

We would caution anyone looking to sell though as home price appreciation may begin to taper as this year comes to a close. The median home price was almost 12% higher than it was a year ago and that should continue short-term, according to realtor.com’s chief economist. But many forecasters believe a plunge in home prices is coming by year’s end. Sellers who are on the fence, should act soon. In fact, next month might just be the perfect month!

/0 Comments/by

When It Comes To Home Inspectors, Don’t Say We Didn’t Warn You

The home purchase can create in buyers a sense of wonder, joy and anxiety. They can get caught up in the excitement of what lies ahead, yet forget the responsibilities associated with homeownership. As real estate professionals we do our best to temper our clients’ emotions, because a certain degree of level-headedness is most welcomed.

One way to look objectively at a home purchase is through the inspection phase. Inspections and home inspectors should be your ally after you’ve taken those first steps in acquiring a property. After your offer (price, terms and conditions) is accepted, you want to make sure you’re able to move forward with the home purchase. As a buyer, electing various contingencies on the sales agreement, such as a home inspection, is vital to protecting yourself. You’ll need the services of a home inspector, but not just any inspector. You want to hire one that’s loyal to you!

There are many things to contemplate when seeking the services of reputable inspector, but we’ve highlighted four top ones to consider below:

Look To Those You Trust For Some Direction

Our closest circle of friends can often provide us with guidance in many of life’s choices. Perhaps you turned to your friends and family to find your REALTOR®? May we recommend you do the same in your quest for the right home inspector. Once you have a list of possible candidates, search online reviews.

Seek out critiques on sites like Google, Yelp, Angi and the Better Business Bureau. This will help you gain a better understanding of who might be a fit for you and the home you purchased. You should also cross-reference this list to discover if those you’re considering have membership in a professional association such as the American Society of Home Inspectors or InterNACHI. To search for a inspector on these sites, use the links below.

American Society of Home Inspectors
International Association of Certified Home Inspectors (InterNACHI)

As a rule of thumb and good practice, your agent can and should provide you with recommendations as well, at least three, who are experienced professionals in your market. Reputable REALTORS® want qualified inspectors because they want to protect their buyer and keep them informed.

Question Your Top Choices

You should evaluate potential home inspectors just as you would in choosing your real estate professional. What level of experience do they have? Are they members of a professional association (see above)? Do they carry insurance? Are they licensed? Can they provide for you a sample of their work (in terms of a report)? Is this something they do full-time? It’s important to dig a little and get a sense of the quality of work of the home inspector. Do your due diligence and ask if you can touch base with their recent past clients.

As a homebuyer, you should get a sense for how long they’ve been in business and maybe even how many inspections they’ve performed over the years.

Their insurance coverage is important should they make an error or oversight during the inspection. What qualifies as an oversight? Maximum liability for the inspector is often only the cost of the inspection. This is why it’s important to understand what’s written in his/her contract.

In Pennsylvania, an inspector doesn’t have to be licensed, but they do have to be a member of one of the professional associations. Furthermore, you aren’t considered “licensed” until you complete over 100 inspections. Some who aren’t licensed may indeed lack sufficient training. On the other hand, there’s no guarantee that someone who’s licensed will do excellent work either.

A sample report can also give you insight into the inspector you’re interviewing. It should be organized and clearly written. It should include photos, identify the problems, why those problem areas can be issues for the homebuyer and, in some cases, what should be done about those defects. The length of these reports can vary based upon the age of the home, its square footage, its condition, the number of systems in place, if it will include any ancillary inspections, etc., and they are typically twenty-five to fifty pages in length. They can act as a control for comparison on the home’s condition post-inspection, prior to settlement. Something may have happened between inspection and closing and chances are a good report will provide the evidence you may be seeking.

Home Inspectors

The Inspection Itself

Again, the duration of a home inspection (like a report) can vary based upon those things mentioned above, but the vast majority take longer than two hours to complete. Make sure to ask the inspector for a play-by-play regarding what the inspection will entail so you’re both on the same page. Ask them about how long the inspection will last.

Question them as to if you should be present the whole time and see what response they provide. Choose an inspector who wants you there the whole time, from the start of the inspection until its completion. If they say it’s not necessary to even attend or attempt to dissuade you from coming altogether, it could be a red flag. Choose a picky inspector. Choose one who’s open to listening to any concerns about the house that you’re bringing to his/her attention prior to the inspection.

You’ll also want to understand what the inspection will and won’t cover. What can you expect from your home inspection? There might be components or areas of the home like the roof, pool or deck that won’t be examined. The visual components/defects are usually the bulk of what is examined during the inspection process. If you need additional inquiries such as wood-destroying insect, radon, septic system, well testing, mold, etc., you need to check with the inspector to see if they can perform that testing and if so, what the extra fees would be.

Of course, there are times, post-inspection, when you’ll want to walk away from the transaction. Should you stay or should you go? When is the appropriate time to walk away after a home inspection? Your real estate professional will guide you through this process as well — lean on them.

Conflicts Of Interest

Your inspector shouldn’t be offering their services for repairs of anything they flag on their report. This would be unethical and would clearly be a conflict of interest. They understand this. They are in the business of inspecting homes, not repairing them. It’s in your best interests to keep home repairs separate from the inspection process. While you’re at it, you may want to check out a home warranty plan that meets your needs for your home systems and appliances.

 

The home inspection phase of a real estate transaction can be nerve-racking, but it can serve the buyer well. If the inspector does his/her job accurately and thoroughly, the report can provide worthwhile information and aid the purchaser in planning for the future. This period of the transaction is limited, and therefore, time is of the essence. Your REALTOR® will direct you as you look to fulfill your commitments along the way.

In most cases, it’s highly recommended that buyers employ various inspection contingencies on their sales agreement. With that comes selecting an experienced inspector(s) who will look out for your best interests (they work for you!) and is more than competent. You need only look to a 2018 case study conducted by Consumers’ Checkbook, where it created twenty-eight issues it thought any inspector should catch to raise concerns about your home inspection. Consumers’ Checkbook was shocked and concerned as to what those inspectors missed in that study.

This is a field where experience matters. Review the property disclosure of the seller, but don’t rest there. In virtually all situations, the seller isn’t an inspector and neither are you. If you see something, say something – an extra pair of eyes never hurt. After you’re present for the entire inspection, if you notice some problem area, which was discussed on site, is missing from the report, bring it up with your inspector and agent for clarification. An addendum to the report may need to be made in order to protect you moving forward.

If you’re a first-time homebuyer and you have questions beyond the inspection, click here for additional insight.

Happy inspecting and good luck in your search for your dream home!

/6 Comments/by

Buyers, Beware! 7 Mistakes Homebuyers Must Avoid

So you’ve finally convinced yourself now is the time to buy a home. Maybe this is your first rodeo, but perhaps you’ve purchased before. Whether you’re a first-time homebuyer or not, ending up with the property you love for a price you can live with is the goal. Achieving this goal can be grasped through knowledge (it’s power!) and a keen insight into your local market. Focus on your goals and the information at your fingertips, it can save you grief as well as nasty surprises down the road.

When it comes to real estate, very few like surprises. In fact, many don’t even like surprises to begin with (most of my friends despise surprise parties). In order to avoid these unpleasantries, we’ve devised a list of seven ways to make your homebuying experience more enjoyable.

Lenders & Mortgage Brokers

There are so many lending options available to you, but if you’re like a majority of prospective buyers you might settle for one option. This could be a fatal first step, causing you to lose thousands of dollars in the process. Instead, a great approach would be to talk to multiple lenders (at least three) in addition to consulting a mortgage broker. You’ll want to have a solid basis for a comparison. Am I getting a good deal? Is this the lowest possible rate for my present situation (where I find myself in life, credit score, etc.)?

Compare lender fees, customer service, loan terms, rates and response times. The more you shop around, the more you’ll improve your chances of achieving some financial freedom. Certainly tap the bank you do all or most of your business with, but don’t solely rely on them.

Before you begin actively searching for homes in the marketplace, make sure you get pre-approved by a reputable lender. Don’t make the mistake of looking at properties before taking this first step into a much larger world. In competitive niche markets, you could forfeit your chance of landing your choice home if you aren’t pre-approved. This will also prevent you from gushing over a home you simply cannot afford.

Affordability Can Be An Issue Too

Ah yes, you don’t want to bite off more than you can chew either. In many markets throughout the country, the supply is dwindling, but buyers are itching for more affordable homes. It’s in these markets where we discover rising home prices and the challenges that come along with them.

7 Mistakes Homebuyers Must Avoid

If there’s one thing to take away from this article, it’s this: Don’t be swept away by your emotions, don’t let them completely engulf you, making your decisions for you. Rather, create a budget and stick with it. It should contain a list of your monthly expenses: Automobile, student loans, credit cards, groceries, health insurance, child care, investments, etc. Examine your costs and be realistic about what you can actually afford. Be sure to give yourself some wiggle room too.

Remember, by overspending, you could be putting yourself at risk for losing your home in the future should you encounter financial trouble. Overspending can often be tied to emotional needs rather than logical, unhasty decisions. Don’t lust after something that’s outside your price range nor feel the need to borrow the full amount of your pre-approval. Make an offer if you’re serious about buying a home, but do it after much reflection and preparation.

Overpaying For A Home

As stated above, overextending on a home purchase is usually not in a buyer’s best interest. I speak from experience on this. The first home I purchased, I reached to get it and seven years later when I needed to sell it, I found myself in a less than ideal situation. Stay focused on purchasing a home for a good price rather than on what you can spend.

Though there’s no way to absolutely guarantee you’ll make the best choice – markets do change as time goes by – discover the market value of a property before you’re willing to make an offer on such a large investment. Don’t rely on what the rateable or government value of a home would be. These valuations often fail to reflect what the home is actually worth in today’s market. You’ll want to make sure your offer to purchase is based on comparable homes that have already sold in recent months.

REALTORS® & Other Professionals


via GIPHY

Don’t follow the path to home discovery alone! Each homebuyer should have buyer’s representation. This is important in order to protect your own interests or you could find other agents, who are actually working for the seller and not your interests, coaching you. REALTORS® educated buyers about the process. They are the “go to” person before and after a transaction even occurs. They can give you insights into who to consult, the surrounding communities/neighborhoods, if attorney representation is advisable and the like. Find a real estate professional who’s a good match for your personality and your schedule.

An experience REALTOR® can put you at ease. This can’t be overstated. They point many homebuyers in the right direction. They have connections, knowledge and course correction that’s needed in the present landscape. When it’s time to buy a property they link you with the right people as well. Your real estate professional can connect you with reputable inspectors and other service providers who can give you a clearer picture of what you’re facing ahead. What’s the condition of the home? What type of repairs are needed? A thorough inspection will help you avoid a money pit, so don’t neglect to inspect.

Credit Constraints

Before embarking on your quest for a new home, it’s important to give yourself maximum buying power, if time allows. Be patient, pay down some of your debt and save money. Believe it or not, boosting your credit score and/or saving enough for a significant down payment can take months or even years to accomplish. Here are some things to keep in mind prior to getting pre-approved with a bank:

  • Have three to six months of living expenses saved in an emergency fund
  • Don’t drain your savings to put a down payment on a home nor to pay the closing costs associated with settlement
  • Stay level-headed and stick to your budget – meet with a financial planner, if necessary

When the time’s right, get pre-approved and keep the status quo in your finances through settlement. Don’t make your next significant purchase until you’ve closed on your home. Refrain from opening new lines of credit, closing existing accounts or taking on new loans. These would potentially impact your credit score and jeopardize your purchasing power. Furthermore, a buyer’s actions could cause the deal to go south and as a result he/she might be in jeopardy of losing his/her earnest money deposit.

Location, Bones, Location

As you and your agent begin to search for a home that’s perfectly suited to your needs, it’s important to keep an open mind, while not be overly picky with your selections. It may seem like a part-time job, attaining the right fit for you and your family, after all it can be vital to your lifestyle and development. Seek a home you can add value to.

7 Mistakes Homebuyers Must Avoid

When your search is underway, it may be difficult to ignore some of the cosmetic details, but that’s exactly how you may want to approach it to maintain sanity. A homebuyer should grasp the difference between things that can be changed relatively easily (like simple remodeling) versus things which are very expensive or near impossible to correct. Don’t let the physical imperfections turn you off. On the other hand, it’s important to perceive those things like your home’s yard/lot size or location, which cannot be changed. If you fixate on the home over its neighborhood or school district, you could end up loving the home, but hating where you live.

Ground yourself and know your limits. If your funds are tight, you may need to be willing to reside on a busy road, deal with a dated home or put some sweat equity into it. Prospective homebuyers should also do their research. With the aid of your REALTORS®, investigate the crime statistics and school ratings of areas where you’re interest lies. Gauge your commuting time to and from work. Visit the neighborhood where you’re thinking about moving to at different times of the day to understand traffic patterns and its vibe. Don’t look for perfection in a home, it rarely exists. In fact, in doing so, it could lead you to overpay for one along with grossly limiting your search.

Ownership’s Hidden Costs

Before you embark on this exciting adventure toward homeownership, don’t overlook the hidden costs, especially if you’re a first-time homebuyer. Have you considered the other expenses? You may need to pay for property taxes, homeowners insurance, flood insurance, mortgage insurance (PMI), repairs and maintenance costs, utilities, homeowners association dues (HOA), etc.

Set aside 2% to 3% of the home’s value each year to cover costs associated with maintenance and repairs. Don’t underestimate this buffer. In order to maintain your home, you’ll need to have this set aside. For instance, if your home has a market value of $250,000 and wasn’t recently built, then each year you should have $5,000 to $7,500 set aside for upkeep and repairs.

 

I know this information can be a little overwhelming for some thinking about buying a home, but it’s paramount to keep these potential pitfalls in mind. Again, focus on your goals and discuss this further with your real estate professional. How important is it for you to be a homeowner now than continue to rent and be one in the future? This is a question you’ll inevitably need to ask yourself.

We hope you enjoyed this article. For more helpful homebuyer information as well as our FAQs, click here. We always welcome your feedback!

/0 Comments/by

Are Millennials Missing Out On Homeownership?

Over a decade ago, the Great Recession was coming to an end. Mortgage lenders were beginning to tighten their requirements as they were sifting through the mess of an influx of foreclosures. Housing prices began to plummet. Millennials, anyone who was then ages 13 to 28, obviously didn’t have much of an impact on the housing market, many will still in school. Over the course of the past decade, home prices as well as the impact this generation has had on housing have steadily increased. The question remains though: What sort of effect have they had?

A recent article from Fortune written by Shawn Tully discusses the challenges millennials have encountered in recent years in a slightly volatile real estate market. Although housing experienced cheaper prices relative to the previous decade, millennials had little impact until two years ago. “[M]illennials had loads of college debt, and many had bad credit,” as the above mentioned cites. Until 2017, this generation became the “lost generation” when it came to home ownership. Last year, they made a big impression accounting for half of new homes sales. Now it appears with under-building in home construction, diminishing home affordability and rising rates on home loans, sales could be shifting back to more affluent buyers (Gen-Xers and baby boomers). We may once again witness a drop in homeownership rates for millennials.

This is concerning for the state of affairs in many markets throughout our nation: multiple locations such as California, Nevada, New York, Florida, just to name a few. The cost of housing has spiked so much in recent years that first-time homebuyers, many of which are millennials, don’t stand a chance. Yet, not all millennials are fighting this battle. In Northeastern Pennsylvania, the “lost generation” continues to be found in the first-time homebuyer market.

The Greater Scranton market presently carries with it an absorption rate of 6.34 year-to-date and 5.82 year-over-year (YOY) for December. Absorption rate is “the rate at which homes are selling in a specific area.” I bring this up, because this market is actually slipping into a seller’s market. Absorption rates between 6-9 (months of inventory) signal a balanced market, whereas rates between 3-6 indicate a normal seller’s market. Millennials are actually the catalyst. They’re buying up homes now.

Millennials, the largest generation in our country, lead the charge to homeownership and improved financial stability in Northeastern PA. As family formation increases in our area this year, we’ll see the effect this “lost generation” has on the growth of our local economy.

/0 Comments/by