All Things... Buying Your First Home
Buying your first home is one of the biggest life decisions and largest purchase you’ll make. The first home marks the start to a new chapter in your life. Whether you’re looking for your first solo real estate investment or your first family home, you want to know that you’re making the right decisions and moving in the right direction. I often get the opportunity to be part of the journey with someone buying their first home. Here are somethings you should know when buying your first home in San Diego:
1. Interview the agent to represent you.
The San Diego real estate market is highly competitive, having an agent who educates and helps prepare you on the home buying process from start to finish is imperative. Especially in the current market, you don’t want to work with just anyone. Some great questions to ask the agent you are interviewing:
What are you doing to get your clients offers accepted in this market? The agent should have a very specific strategy
What’s your experience and how do you work with first time home buyers? If the agent doesn’t take the time to go through a home buyer consultation with you, from start to finish what you can expect, explaining contingencies, inspections and appraisal- just to name a few, RUN
Will I work directly with you?
Can you provide a list of referrals from past clients?
2. Getting pre-approved with a reputable mortgage lender is the first step.
You want to work with a lender that has a track record of performing on what they promise. This might seem like the most daunting first step and even seem too soon if you aren’t quite ready to pull the trigger on buying a home immediately. The reason you want to get pre-approved right away is for two reasons. First, the perfect home could come along sooner than you think and right now, homes in San Diego are reviewing offers within a couple of days. Second, you want to make sure there aren’t any issues with your credit or finances, if there are you can take the immediate steps to correct.
3. Focus on your monthly payment vs. your purchase price.
Yes, purchase price is important but focus on what your monthly payment is at that price. The reason being, what your interest rate is will directly affect your monthly mortgage payment. For every percent your interest rate goes up or down, it affects your buying power by ten percent. For example, if the interest rate on a $700,000 home goes down 1%, you can afford $70,000 in buying power. For every $10,000 you go up or down in purchase price affects your monthly mortgage payment by about $50.
4. Have your list of must haves and what you may be willing to trade.
When I first meet with my new clients we go over everything that you have on your “must haves” list for your new home. We’ll do everything we can to find a home with everything you want and more, but be open. I’ll keep your home search broader at first, when it comes to the homes I’ll send over, so we never miss the opportunity of finding “the one.”
5. Financial surprises.
Drain leaks, washer stops working or shower head breaks and now it’s your responsibility to fix it. No one likes financial surprises.. We want to make sure you are saving for expenses that can come up. I always recommend my clients to have a home warranty, depending on the company you go with, coverage should be approximately $600 a year. A home warranty covers many issues that may come up in your first home and it makes it easy. You’ll pay the $75 service call fee then they come out and make the fix for you. Worth every penny.
6. Down Payment.
This may be one of the biggest misconceptions first time home buyers think because it’s something “they’ve heard.” You don’t need 20% down when buying a home. There are many different down payments options available starting as low as 3%. This is something we’ll go over in our initial meeting and once we get you set up with a reputable mortgage lender.
7. When you’re buying a home, you don’t pay your agent.
Another thing that a lot of first time home buyers don’t realize is that when you purchase your home, you don’t pay your agent. It’s part of the seller's costs that covers your real estate agent’s fee.
I’m passionate that my clients are well educated through the entire process of us working together. Our relationship together is exactly that, a relationship. I want you to know that I have your best interest at heart and so should any agent you work with. If you have any other questions about buying your first home or the San Diego Real Estate Market, don’t hesitate to reach out. You can email me at Jenica.Martin@Elliman.com or call/text me at (925) 787-1911. Now, let’s go get you that home!
