With the new year bringing with it fresh inventory, low pricing and low interest rates, 2011 could be a great opportunity for those of you contemplating the purchase of a first home. Although venturing into the market as a first time buyer is not for the faint of heart, especially in the bay area, the exhilaration of the search and jubilation of receiving that first set of keys at the close of escrow is likely to put a smile on your face. After enduring the challenges and overcoming the obstacles along the way, it will feel good to walk through the front door threshold that you can now call home, YOUR home.

What do I do first?

First, get yourself pre-approved by a mortgage lender. This is the very first step to home buying for everyone. All too often, home buyers approach the housing market by visiting open homes on Sundays not knowing what they can actually afford. This could mean that they are looking at homes above, or below, their means. Everyone has unique criteria they would like to satisfy when they purchase a home and more often than not, much of this criteria should be well thought out and prioritized ahead of time. We all seem to go into the market with "champagne taste and beer money"...no matter what the price point.

For first time buyers, going into the trenches unprepared could mean entering murky waters with unrealistic expectations and setting themselves up for disappointment. This is when having an experienced realtor is essential. The realtor should be listening to your list of wants and needs and determining how best to satisfy those without having to make too many compromises. Unfortunately, everyone is forced to make compromises in some way, again, no matter what the price point. The compromise may be in location, size, style, condition, yard features, noise level, school district, or access to conveniences. Which of these compromises a home buyer is willing to make is an individual choice. The old cliche, location, location, location as it refers to what is most important when buying a home is as true today as when it was first written decades ago.

Do I really need a realtor?

Yes, Virginia, you really do need a realtor. After being pre-approved by a lender, get serious about choosing a realtor with whom you can establish a working relationship and in whom you trust. Buying a home is a complicated process. Experience, knowledge of the community, history of past sales, and personality are all important in choosing YOUR realtor. You also need to know that you are compatible as this road will be long and will take many turns along the way. As much as people would like to think that the internet has made home buying an easier task to venture out on your own to "get a better deal" ...this rarely works. One reason is that the average home buyer has no experience negotiating, no idea which of the many serious pitfalls they may fall into, and where to go for help when they need it. Your realtor will have experience selling in the area, will know price points, will have experience negotiating, knows the legalese of contracts, and has established relationships with banks, home inspectors, tradespeople, title companies, and a working knowledge of how to overcome issues that inevitably come up along the way during the transaction.

Selecting a realtor

How do I find a realtor who will work for me? Ask for references from your friends and relatives or colleagues. Who have they used in the past and how did the transaction go? You can go online and look for agents who specialize in a particular area. Read about them and their experience. Get a feel for their personalities through their websites. Then choose one or three to interview. There is no obligation when you set up an appointment to meet with a realtor..and no cost. Most realtors are happy to talk about themselves and their experience. Ask questions that are important to you. After you have done this process, it is likely that someone pops out at you as a good match. Good communication is essential! Set up your first appointment to discuss your needs and wants. The process will take on its' own personality after that. If you find that you are unsatisfied after the first visit, communicate how you feel with the realtor and determine if the issues can be resolved, if not, move on to another professional. Keep in mind that you'll be spending lots of time together so you have to establish a relationship that works for everyone. Your realtor will become your guide, your sounding board and your counselor through this very personal and complicated odyssey and it is likely that you will make a life-long friend in the process.

Once you have your realtor and financing in place it is time to venture out to find that "dream home". Your realtor will be able to answer your questions about neighborhood, values, recent and past sales, school issues, just about everything that might be relevant to purchasing in a particular area. After you have established your list of priorities, be ready to be flexible and be willing to change them along the way. This may be necessary depending upon what is available within your price range. Always go into this adventure with an open mind and with your eyes open. Ask questions! I always delight in answering my clients questions. The more educated home buyers become along the way, the smoother the search goes.

I want a deal!

So often home buyers come to me with this as among their No.1 criteria. First of all, a good deal is in the mind of the beholder. Negotiating real estate is more of an art than a science and the factors influencing pricing are often many and complicated. A first time buyer should listen carefully to the words of their professional when it comes to price. There are many factors that influence the negotiating process and many of them are subtle nuances that seem superfluous but end up being very important in the end result. Bid too low, seller will often get insulted or simply choose to overlook the offer. Be willing to pay too much and you will be compromising your investment from the start.

Always review recent and past sales data, and don't rely too much on real estate web sites like Zillow or Trulia that base prices on averages (square feet, bedrooms, etc.). I have yet to represent anyone in the purchase of an 'average' home. Every home comes with different features and different personalities, even tract homes. There are many different circumstances for home sales and all of them should be taken into consideration ahead of negotiations so that you feel comfortable with the outcome.

Always be prepared to walk away!

Never become so emotionally attached to a house that if the deal sours, you feel that you can't walk away. Transactions fall apart for many reasons these days: inspections, disclosures items, appraisal value and a change in buyer's perception of the home after spending some real time there. Until we get through the due diligence period, don't be so in love with the home that you can't walk away. Sometimes issues can't be remedied. Sometimes sellers can't or are unwilling to fix things. The first time home buyer is most often putting everything he has into the down payment and closing of the sale and can not legitimately be considering costly repair items. Remember, fixers costs money, often times, lots of money. Although many think it is a romantic notion to buy a fixer and "make it yours", this is not possible without cash available to do what is necessary.

Do I really need to spend money on inspections??

After your offer is accepted your due diligence commences. Usually you have between 12-17 days for your inspections, appraisal, financing process and title process. There is no way to ascertain the overall condition of a home without thorough inspections. Your realtor will usually have established relationships with licensed inspectors who are also accredited through professional organizations that insure that these professionals have a thorough understanding and working knowledge of all things related to building structure, safety, and maintenance. Without these inspections, a home buyer could likely become embroiled in unexpected repair items, structural issues or other factors that would otherwise affect the home and its value. Although sellers are required to provide the home buyer with many disclosures, those self proclaimed disclosures are only as accurate as the integrity and knowledge of the home seller.

After this period of due diligence in which the buyer gets to look at each and every factor that is relevant to his decision to proceed with buying the home, the sale contingencies are released or the buyer chooses to cancel the transaction. At this point, the buyer is either still in love with he house and is thrilled with the results of his inspections, the deal is renegotiated or the buyer chooses to back out feeling good about the money spent that would save him from a monstrous mistake.

Common pitfalls in the home buying process:

• Buyers over estimate what they can really afford
• Buyers over estimate what their money will buy
• Buyers fail to see "added value" when it exists
• Buyers overlook major issues because of emotional bonding
• Buyer overlook what repair costs will be while being unable to afford them
• Buyers remorse..simply becoming too scared to commit
• Buyers impatience..unwilling to accept that there will likely be something better
• Buyers not being able to make a decision quick enough
• Buyers being "penny wise and pound foolish"

Here are your keys!!

The average escrow period is 30-45 days. About a week before closing escrow the buyer is summoned to the title office to sign loan documents. This is often another scary event when the buyer is confronted with a 3 inch high pile of documents to sign. All buyers are nervous at this point. They feel like they are signing their lives away. I usually try to be there to explain any questions that might come up. After these documents are signed, they go back to lender for final review and then the loan is processed, the purchase is funded and VIOLA!...I hand you your keys!!

I love working with first time buyers! Call me if I can assist you.