Buying your first home on Oahu can be a very exciting time for any prospective first-time homeowner. My job as a first-time buyer specialist is to make my first-time buyers feel comfortable and confident going through the home process. As first-time buyers, it’s natural to feel a little overwhelmed and nervous, but with the right real estate agent with you along the way, the process will also be fun, educational, and all the worthwhile!
This blog post is Part 10 to my First-Time Buyer Series. If you haven’t done so already, please begin at First-Time Buyer Series #1.
Now that you are familiar with the entire escrow process, here are 25 tips to be fully prepared as a first-time buyer!
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Never go shopping without your wallet. Translation: Don’t start looking at houses before you are even pre-approved!
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Are you qualified to buy a home right now? If your credit score is above 620 (keep in mind – the higher the score, the better!), your debts are minimum, and your income is consistent, you may be a good candidate to be qualified for a mortgage.
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Prepare to have a down payment. The minimum required down payment is normally between 3-5% down, but some buyers may also choose to put 10% down, 20% down, or anywhere in between. There may also be no down-payment programs that you might be able to qualify for. Contact your realtor® or lender for more information.
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Do not open new lines of credit, take out a personal loan, or make big purchases on loan during your pre-approval and escrow process. This could affect how much you will qualify for and may even lead to loan rejection!
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Prepare for closing costs. In addition to your down payment, you will also want to prepare for other fees and charges that will be due upon closing, including the appraisal fee, home inspection cost, lender fees, title & escrow fees, homeowner’s insurance, & more. Your lender will give you a specific breakdown and amount that you will need to bring to closing day. On average, you can expect your closing costs to be about 2% of the purchase price.
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Once pre-approved, you may want to attend some open houses to get an idea of the market. The open house agent will probably ask you to sign in and inquire if you are working with a realtor®. If you are working with a real estate agent, be sure to let the hosting open house agent know of this!
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If you are interested in a new development project and are working with a realtor®, be sure to let your real estate agent know of your interest and have him/her be in attendance during your first visit to the sales office. New projects will not allow you to work with your realtor® unless they are present with you during your first visit!
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If you find a property online or a For Sale sign on the street that you are interested in, send the address to your realtor® for accurate information. Often times, properties found on websites like Zillow or just out on the street may have already been sold. Inaccurate information may also be posted online. Your realtor® will be able to obtain accurate information on the property and update you on the property status.
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If a property is priced way below market value, it may be too good to be true. Often times, buyers will come across properties that are leasehold instead of fee simple. You may even run into online scams. Be sure to inquire with your real estate agent to see if the property is legitimate and also weigh the pros & cons of leasehold properties.
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When you are making an offer on the property, you may be up against multiple buyers who are also making offers. Your real estate agent should have advice and recommendations on how to make your offer the most competitive and stand out amongst the crowd.
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Be aware of what other properties in the surrounding area are selling for. Your offer price should be reflective of the fair market value that the neighborhood is selling for. If your offers are getting rejected far too often, you may want to ask yourself if your offers are coming too low. Everybody loves a good deal, but in real estate, it is all about fair market value.
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Don’t give up! It may take a few offers and some rejection before you finally receive an accepted offer on a property simply due to the competitive nature of the real estate market. The wait will definitely be worth it!
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If you are obtaining a mortgage, you will be protected by the appraisal. Your lender cannot finance you a home that is below the appraisal value of the property. This will help to ensure that you will only be purchasing the property for what it is worth.
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Keep your entourage to a minimum. While shopping for homes, it is recommended that only the primary buyers or persons on title, should be present during the house hunt. This will allow for zero distractions and will allow the buyers to make their own decision without conflicting opinions. Primary buyers should also be the only ones present for the home inspection.
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Keep in mind, no home will be perfect. Compromises will always be needed. No home will be perfect but it is up to you to make the home perfect for you.
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The home inspection will always uncover little things. Even in a new construction home, again there is no such thing as a perfect property without flaws. While it is the home inspector’s job to point out every little detail, it is up to you and your agent to identify the important issues and have the seller address them if needed.
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Read & review your documents. The seller’s disclosure will give history about the property you are buying while the condo documents will give information about the actual complex, if you are purchasing a condo/townhome.
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If you are purchasing a condo/townhome, the condo documents will have a lot to read. Further analysis of these documents is beyond the scope of expertise for your real estate agent. It is recommended that buyers consult with their licensed CPA or real estate attorney to review and explain these documents.
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During escrow, the buyers will decide on how they want to hold title to the property. Options range from joint tenancy, tenants in common, and everything in between. For advice on how to hold title, you may want to consider consulting with a real estate attorney at this time.
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Cooperate with your lender. During the escrow period, your lender will start requesting paystubs and other documentation. It is important to send over the requested items in a timely manner to avoid any closing delays.
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Your final walk-through is your opportunity to make sure the home is still in the same condition as when you first saw it. This is also your time to check on any repairs that were negotiated through your J-1 Home Inspection period. Similar to home inspection day, keep your entourage to a minimum. If you feel that your family or friends would be a distraction, wait until move-in day.
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Prior to move in day, don’t forget to take care of your checklist items. Notify the post office of your forwarding address and set up your utilities to be taken care prior to.
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Get your handwriting hand ready. During the escrow signing, you will be signing a lot of documents! Typically, the escrow signing will be conducted at the escrow or lender’s office. Some can also arrange for mobile notaries to meet you at your place of convenience.
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After meeting with your realtor® for your keys, you may want to consider changing out the locks for security purposes. While the seller is required to hand over all sets of keys, you just never know.
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To begin your real estate search, contact me today! An ideal realtor® should be fully committed to their profession and dedicated to going above and beyond in their services. They should also be experienced, reputable, and knowledgable. The right realtor® will make all the difference in finding the perfect home for you. I am readily available to consult with you – simply call or text me at (808) 220-8527 or email [email protected] – I look forward to working together!