With December quickly approaching, there is no better holiday gift to pursue than your first home.
Of course this depends on where you live, along with your financial situation. But it's safe to say that for many, purchasing a first house is a big step -- not to mention the fact that it's exciting and marks a new life chapter.
The housing market figures to be hot, even with colder weather moving in for many parts of the country, so with that in mind, here are some tips for first-time homebuyers offered by Eric Fontanot, president of Houston-based Patten Title.
Use a professional
Whether it’s a title expert, real estate agent or lender, be sure you're not just using people who will get kickbacks. In particular, title professionals are valuable because they work with numerous real estate agents and lenders who can be recommended.
“Inquiring with a local, reputable title company is a great way to learn who the best real estate agents and lenders are in a particular market,” Fontanot said. “This is an unorthodox method for a buyer or a seller, but can be extremely effective, because the title companies typically are very well-versed in who is able to provide smooth experiences for their clients.”
Realize how much control you have
You don't work for Realtors and title companies, but rather, it's the other way around. Even though professionals are hired, it's the buyer who has the ultimate say as to which homes are shown, which homes are the best fit and when to make offers.
"You have an immense amount of control in the transaction," Fontanot said. "Always ask questions and feel confident in making requests of your agents and service providers."
It's important for buyers to come up with their list of needs and priorities for what they want in a house.
Buyers will also need to find a copy machine, because they have to send a lot of documents to find out how big a loan they qualify for, and thus how expensive a house they can afford.
Copies of pay stubs, tax documents and bank statements will all be needed to obtain a pre-approval letter, which is pretty much required to have before the house-hunting process starts.
In what is still a seller's market, it's imperative that buyers aren't solely relying on real estate agents to decide what homes would be great fits, whether to make an offer and how soon an offer should be made.
"Your participation is key to having a great experience," Fontanot said. "All of the providers involved are focused on giving you a first-class experience, and that is only possible with the assistance of the buyer. Deadlines and time frames for completing items requested or questions asked sometimes seem trivial when they are quite important. Taking the time to provide all documentation promptly helps all of the providers move the process along smoothly."
Negotiations are not win-lose propositions
The objective is to find a fair deal that both a buyer and seller can be happy with. This is why comparable homes that sold will become so important to Realtors, because it helps determine the market price that will make both the buyer and seller leave the closing table feeling like they got a great deal.
"Everyone has the same end goals, and it can and should be a win-win," Fontanot said. "Don’t be adversarial and don’t indulge people who are."
Protect your asset
Once a buyer finds a home, makes an offer and it is accepted, Fontanot said it is imperative to buy title insurance, which protects buyers and lenders from financial liability should problems arise with a title when there is a transfer of ownership.
Fontanot said many buyers feel title insurance is an unnecessary expense, but it is always in the best interest of the owner.
"People don't realize the longstanding effect it has," Fontanot said. "It's there for the life of the property."