Setting expectations and moving toward a home purchase for first-time homebuyers

For most people, homeownership is part of the American Dream, a core component. This dream can quickly become a focus once someone settles down with a significant other, or even a great job. Home ownership can be a primary motivator, and most people start saving with the hopes of building enough for a down payment and qualifying for a loan.  

I consistently work with new homebuyers who are in this exact position. These buyers aren’t 100% familiar with the San Francisco real estate market but know they want to buy their first home in the city or even the Bay Area.

When a first-time homebuyer approaches me, asking for advice and direction, I offer these:

First-Time Home Buying Tips

1. Have Realistic Goals: The real estate market for first-time homebuyers can be a bit unnerving if you’re beginning to get serious. Buying a home is doable if you qualify, but knowing the competition, knowing where you would like to live, and having a seasoned realtor like me is a great way to help you adjust your goals and expectations.

2. Know what’s Right for You: Determine some basic facts about yourself as a first-time homebuyer. Things to consider are: how big is your family? Do you want your home close to work? Is it near public transportation? Is a condo a good option? Is this purchase an investment to help get you in the real estate market? Is this home a good value for where you are in your life right now?

3. Down Payment Saving: Most likely, if you’ve reached the point where you’re searching for information on first-time home buying you probably already have set some money aside to save for a down payment. Something first-time homebuyers might not know is that there are assistance programs that offer down payment help in many forms. Even help with closing costs could be available to you. We can work together to help you find the right fit.

4. What Can You Afford: I am not a lender, but my 20+ years of experience in real estate, more than 25 years of home ownership, and some great lenders, have taught me that you need to consider your income, your debts, and your down payment. Monthly costs typically can’t exceed a percentage of income (approximately 28%), your recurring monthly debt payments plus a new monthly mortgage may not exceed a certain threshold (approximately 41%), and most lenders prefer a 20% down payment, but there are assistance programs I can tell you about that will help you. There are also several loan types, FHA, GSE, USDA, VA, that can also help.

   Another expense to consider is your homeowner’s insurance. Depending on your preference, you can have this added to your escrow and it can be added to your monthly mortgage payment. This can sometimes increase or decrease your overall payment but that’s often reflective of economic indicators. For example: If property values increase you might want to consider increasing the limit on your homeowner’s insurance, therefore increasing he monthly expense. Other’s just pay the yearly annual so they have the same monthly mortgage each year. Although we have many contacts in the this business, this might be a good site to get the ball rolling: www.ConsumerAdvocate.org.

5. Progress vs. Perfection: The idea of a turnkey home might sound exactly what you want, but consider the joy, and there is joy, in selecting what you want for home finishes like; hardwood floors, granite countertops, appliances, or wall and trim colors. Those personal touches, that TLC, are what make your home more yours. 

6. Sell Yourself in Writing: Here’s something many buyers, first-time or otherwise, don’t know. Sellers tend to be good stewards of their home and neighborhood, and they want to be sure the home is going to nice people who will love the home and neighborhood as much as they did, if not more. I pride my service in guiding you while you write this letter to the seller.

7. Don’t Lose Faith: You might not get that first home, so don’t lose faith in the first-time home buying process. We can work together to make an offer that fits the next time. However, to help increase your odds, I have a great track record in knowing home values and what it takes to close on your new home. A wise friend once told me, “What’s meant to be yours, will not pass you by.”

Please feel free to request out Buyer’s Guide for more information on what happens during your search and subsequent home purchase. Also, if you have other questions, I’d like to hear from you, so please contact me.