March 9, 2006 Issue                                               

©2006 The Chestnut Hill Local

Buying tips for first timers

Rookie home buyers will have an easier time finding their first home when they understand how to work with a real estate sales associate and what information they need to have on hand prior to shopping.

Not fully understanding how a real estate sales associate works and what he needs to know to help the unseasoned buyer, may result in a slower and frustrating shopping experience for both the industry professional and the first-time buyer.

Betty D. McIlquham, mortgage consultant/Gold Services manager, Weichert Financial Services, said when working with a real estate sales associate, ideally buyers should have two years of their W-2s, a current pay stub and a current bank statement for all of their accounts.

Report credit problems before a credit check is performed

Some credit problems can be corrected before applying for a mortgage. Banks run second credit reports and if the credit problem did not appear on the first report, it will surface on the second. Hiding bankruptcy or other credit problems often result in not obtaining the loan and not being able to purchase the house.

“Meet with a mortgage professional as soon as possible and take the pressure off any uncertainty,” said McIlquham. “Meeting with a mortgage professional, also determines the maximum buying power the buyer has. By exploring product selection, you may find your buying power to be doubled.”

McIlquham said fixed and adjustable rate mortgages are readily available. Typically, FHA allows for the lowest rate with just 2.25 percent down.

“FHA serves the first-time homebuyer well,” said McIlquham. “There are other options available wherein the credit does not meet the flexible guidelines of FHA.

“A mortgage professional can show you the financial incentives that come with a home purchase,” said McIlquham. “From interest only, to no money down, to traditional fixed and adjustable rate mortgages, loan product selection will be key to you securing the home of your choice.”

McIlquham said an offer looks stronger when a condition-free letter of pre-approval is presented. A pre-approval converts to a mortgage commitment as soon as the house contracted for passes its appraisal.

Debby Strott, branch manager of Weichert, Realtors’ Morristown West Office, advises against making a major purchase while house hunting or buying a home, which may affect credit scores and result in not qualifying for the loan.

Tips on making an offer

Today’s market is different than it was a few years ago. There are more buyers than there are houses for sale which means a home may have multiple offers. The combination of low inventory and multiple offers drives the bidding up. In addition, low interest rates continue to inspire more buyers to purchase a home.

“Buyers need to purchase up,” said Strott. “Most homes are selling over asking price which is why it is important to use a skilled and knowledgeable real estate agent.”

Strott also advises that younger first-time buyers do not house shop with parents. “Their intensions are sincere for their children, but frequently they (parents) don’t understand today’s market conditions,” said Strott. “If you find the home you want, buy it now, prices are only going up.”

Understand how the Multiple Listings Service works

Another important tip for first-time buyers is to understand how the Multiple Listings Service works. Home buyers sometimes think that working with more than one sales associate will result in seeing more homes. Sometimes buyers do not reveal that another associate is working with them. This thinking is a waste of time for the buyers and the sales associates that innocently work with them. All sales associates have access to the Multiple Listing Service and working with more than one real estate professional insures that the buyers will be taken to the same home more than once.

McIlquham and Strott suggest that buyers meet with a Weichert Gold Services manager to run credit and review program options. Weichert’s Gold Services program offers a performance guarantee to homebuyers who elect to use Weichert Financial Services to obtain their mortgage, Weichert Insurance Agency to obtain their homeowners insurance and Weichert Title Agency to obtain their title coverage. Opting to use all three affiliated companies, they receive a credit decision within 24 hours and guaranteed closing date. If Weichert fails to deliver by the scheduled closing date, the buyer will receive a $1,000 credit at closing.

When first-time home buyers begin their home search informed and with a credit approval guarantee in hand, the entire transaction will go much smoother.