Owning a property of your own has and will always be one of the top American dreams. Afterall, who wouldn’t want a place to call home that affords the right to basically do what you want? Though there are some well-versed people in the industry, there still remain quite a few who have no clue about purchasing a home.
Buying your first property can be an unforgettable experience that has you feeling both joyous and full of nerves. Is this a good time to buy? Can I afford any of the homes on the market? Is the process too complicated? These are all great (and common) questions perfect for an expert.
Alicyn DelZoppo is a seasoned real estate professional with Columbia, Maryland’s Creig Northrop Team of Long and Foster that packs her own punch. Recently honored as one of REALTOR magazine’s “30 Under 30,” DelZoppo has reported 2011 individual home sales over $7 million and holds many certifications throughout her industry. She is dedicated to her craft and in many ways is a matchmaker pairing people with the right home.
It was only natural that I reached out to Alicyn for her POV regarding real estate and first-time home buyers. While many of the specifics will vary by state (and even city/town), it was so great to get some general pointers. Below is part one of my Q&A with Alicyn that was so good it had to be split into two days.
Be sure to check back for part two, but in the meantime, check out her website www.realicyn.com. Let’s get started.
Tips & Tricks for the First-Time Home Buyer
TP (Tanvier Peart): At what age should people (ideally) start looking to purchase their first home?
AD (Alicyn DelZoppo): There is no “ideal” age to purchase a home. One can legally purchase a home as young as 18 years of age. I’ve had some clients purchasing their first home in their 50s. However, age should not be the defining factor in whether or not you should start looking to purchase. These are things to consider when making the decision:
- The Right Mind Set – You should see a home as an investment and like many investments, know that you will not see an “overnight” return. Through my experience, many buyers have been planning to live in their home for at least 3-5 years and some even longer. Others are only living in a place for a short time and still want to purchase with the intent to rent out their house if they relocate or sell without really making a “profit.”
- Financial Stability – Obviously no one can predict the future, but you should have some stability in your job and be prepared to not only pay a mortgage, but also budget for utilities, condo and/or homeowners association fees and any home maintenance and repairs that you may have down the road.
- Financing a Home – Do you have cash to pay for a home, or do you plan on obtaining financing?
- Cash – While you may pay for the house in cash, you still have costs associated with owning a home. Make sure you have money for utilities, home maintenance and repairs, condo and/or homeowners association fees (also plan to put aside for property taxes).
- Mortgage – There are several different loans available. Most loans (with the exception of Veteran Affairs loans that allow for 100% financing) will require a down-payment beginning at 3.5% of the sales price. In addition, you will have closing costs. Also, your job history and credit score will be determining factors in your purchase position. Get in touch with a local mortgage lender to obtain additional information and specific costs in purchasing a home so that you are adequately prepared.
TP: With the current economy, is this a good time to get into real estate?
AD: Overall, I think it’s always a good time to invest in real estate – again, as long as you have the right mind set. Today, the interest rates are at historic lows (speak to a local lender for specifics). I have past clients who purchased in the last 3 to 4 years who are already refinancing because the interest rates are so good right now. Pricing is very locale specific, so I can’t really comment on the particulars of that, but a local real estate agent can tell you about your specific market. Personally, I am seeing a lot of market activity in my location (Baltimore Metro area / MD). Buyers are out in full force and many sellers are seeing increased activity on their properties.
TP: With the value of homes constantly fluctuating, is it better to rent or buy?
AD: Many buyers are finding out that they can have a mortgage payment for the same amount, if not less, than what they pay in monthly rent. In addition, you can write off your mortgage interest when owning a home – renting does not have that benefit. Be sure to speak to a local agent about specifics in your community.
TP: When searching for a home, what are some things a first time buyer should look for?
AD: A first time buyer should look for something within their budget (including mortgage payment, utilities, cost of maintenance, fees, etc.) and something that meets their lifestyle. If you find that you are always busy and don’t like to maintain much space or outside area, then perhaps a condo is right for you (a smaller living area and essentially maintenance free on the outside). If however you are looking for yard and living space, then a townhouse or single family may be more ideal. Keep in mind that this is your FIRST home and that you will not always get what you want in your first home. In fact, I know many people who have owned 2 or 3 homes and still don’t have absolutely everything they want. Also, many of buyers can get caught up on cosmetic things (paint, flooring, etc). Understand that if you like the layout, essentially everything else can be changed.
TP: What are the advantages to hiring a real estate agent
AD: You should hire a real estate agent for the same reason that you would hire a professional for any other service; they know it better than you do. Real estate agents do more than just show you a house. They help guide you throughout the entire home buying process (whether it’s your first house or your last house – the industry is always changing) – from assisting you in finding a lender, finding a property, finding inspectors for the property and successfully getting you to the closing table. An agent is there to help negotiate on your behalf and be the level head in what is often times an emotional experience. They have the experience to also help navigate you through any hurdles that may arise in a transaction.
TP: Are there any cautions one should consider when finding the right realtor?
AD: A responsive agent is key. Will they contact you back in a reasonable time frame from your email or phone call? There may be a property that comes on the market and if you don’t hear back from them for a few days, you may have missed out. On another note, there are a lot of deadlines once under contract and if they are not responsive right off the bat, what will happen when you do go under contract?
If they don’t know the answers to your questions, will they assist you in finding the answers or directing you to the proper resource? An agent shouldn’t know everything and they should never act like they do. However, they shouldn’t leave you hanging.
Do they work for a reputable company? It is important to be respected in the industry and viewed as a professional. Professional agents like doing business with other professionals.
Are they a full time agent or a part time agent? Are you going to be able to reach them in a timely manner? Are you going to be able to view houses within a reasonable time frame? Are they kept abreast of the changes in this constantly changing real estate market?
Are they knowledgeable in the area that you are looking to purchase within? Real estate is very locale specific (as I’ve mentioned many times before). Do they know of any changes that are coming to the area? Do they know whether this area offers amenities that you are looking for? Do they have an idea about pricing in the area?
If you know anyone that has purchased a house recently, you should ask them if they have an agent that they can recommend to you. Keep in mind that you will be working with your agent over several months, so make sure you develop a good relationship with them. I meet with most of my clients in person, right away (unless they live in another state). This really helps to develop an understanding of one another.