Buy Your First Home

Buy Your First Home

Purchasing a home is a big deal. Get the real estate tips you need.

Buying a home can be one of the most significant financial and life shaping decisions of a person’s life. Not only will this purchase dictate large elements of your financial future, but also the formation of countless family memories. With many home purchases, you see a long term mortgage commitment of 20 to 30 years, which account for the most financially productive years of most owners’ lives. The importance of the right advisor is paramount. Inexperienced purchasers are often unaware of the many elements involved in any real estate transaction, large or small. A savvy real estate advisor will guide you through all elements of a transaction including negotiations, property inspections, title, legal elements, and guidance with outside professionals.

Tip 1: Importance of a Trusted Real Estate Agent

Using a trusted agent can be a substantial differentiation and it almost never costs you more money. Agents do receive compensation through a portion of the purchase price. However, the seller, not the buyer, pays the commission. More importantly potential buyers need to know that the listing agent does not protect or look out for a buyer’s interests at all. In fact, they negotiate against you. If you do not have an agent on your buyer’s side, you do not have a trained professional looking out for you and you do not save more money as the listing agent would simply pocket both sides of the commission. Why not include an agent when it usually costs you nothing?

Tip 2: The Big Picture

Agents are not just negotiators, they are life planners. Usually you are not buying for the home you havenow, but for the life you will have in the future. How do you achieve this while also meeting a financially comfortable price point? Our agents will show you the path to achieving this. Our trained agents will pinpoint items, some which are obvious and others which are not, to help you understand the whole picture of your life. Life plans can involve employment, job growth, income, marriage, kids, future property resale, and a variety of other items. Knowing that property ownership is a long term goal, we are here to make sure you make the right choice. We will ask the right questions, even if they are the tough questions, including ‘is it really time for you to buy a home? We will make sure you are buying a home for the right reasons and not just because everyone is doing it or you received bad advice from an unqualified relationship of yours.

Tip 3: Weigh Your Real Estate Purchase Carefully

Too often we see people rush into home ownership because it is seen as a sign of adulthood, a strong investment, and a bragging rights item for your resume. The work to acquire and throughout home ownership is a big commitment and not always a good investment. Our team will be sure you buy the right house for the right price, meaning you buy the house you can afford today, and in the future. You will know exactly what you are getting yourself into, this includes the upfront cost, continuing costs, maintenance costs, and a forewarning of saving for unforeseen costs such as repairs, roof leaks, and all the non fun parts that come with home ownership. Your mortgage company or a listing agent may say you should stretch your abilities on pricing, but our agents are here to keep you in an affordable pricing situation so your future self is not regretting the actions of today. Oftentimes we see purchasers who look good on paper, with lenders approving a purchase price up to three times more than they truly can afford. Just because someone will give you the money, does not mean you should take the money, much less spend it. With student debt as high as ever and the government taxing you at every turn entering and exiting a property, the right basis is key. Oftentimes people buy just to buy, without thinking about the long term and that most purchases do not make sense unless you retain residency for at least five years if not more. Too often we see purchases hastily made that actually cost sellers money down the line at resale. No one should make such a large financial commitment without being properly educated on the whole picture and confidently knowing they can actually see a benefit on the total transactions, not cost them money. This goal can be achieved through the proper creation of an exit plan. While we all make plans for the future, life does not always play out as we would like. In the event of an unforeseen positive financial event allowing for a home upgrade, a negative financial event requiring a home sale, a relocation out of the area, or another item such as a divorce, our team has the tools to cleanly and safely assist you in exiting the property while maintaining your current lifestyle.

Tip 4: Real Estate Purchase Price Isn’t Everything

Purchase prices do not tell the whole story. The purchase price is only one of many pieces of owning a house, do not fixate on the purchase price only, the entire picture must be considered. Property taxes, homeowner’s association (also known as “HOA”) fees, insurance, improvement costs, renovations costs, and other line item expenses quickly add up and oftentimes outweigh the purchase price itself. You need to be sure you are comparing each home apples to apples. An example being a condominium with a large fee which is priced very low may actually be more costly than a nicer, more attractive, and significantly higher priced condominium with lower condo fees and lower taxes. You can buy the most attractive home in the neighborhood, but if the tax liability, HOA fees, and other items are burdensome or the maintenance upkeep is too much to handle, it may not be worth the effort. We will walk you through each of these items as part of the entire purchase of a property, so you walk into any home eyes wide open to the entirety of the cost, no surprises.

Tip 5: The Legal Agreements

Home Buyers often forget that acquiring a property involves contracts which are long, sophisticated, detailed, and a unique process that many buyers are not used to or trained to review. Legal language can often be considered a different language. When purchasing  a property, there is involvement of a purchase and sale agreement, a loan agreement with your lender, title insurance arrangements, property insurance, and a variety of other legal agreements which need to be dealt with, prepared appropriately, and negotiated. With the wrong advisor behind you, a buyer could put themselves in a compromised position before even setting foot in a home. Our advisors will remind you that there is no such thing as a non-negotiable contract. All terms are up for negotiation and we are here to negotiate the best terms for you. Items such as contingencies where you can retain your deposit if you find issues through home inspections, lender contract terms dictating the future resale of the home, and other items can prove as valuable a negotiation item as the price itself.

Tip 6: Lending

Lenders do not just loan tens, hundreds, or even millions of dollars easily. Even if they are willing to lend you the money, does not mean you are making the right decision. Remember lenders, their sales agents, and mortgage brokers are in business to make money on transactions, oftentimes looking out only for themselves and rarely for the customer. Just because the market is right (a buyer’s market) or rates are right (low interest rate) does not mean a home is the right investment for you or that any particular property will work for you. We all must remember all of the foreclosures which occurred during the Great Recession and therefore not take home mortgages lightly. To buy any home you will need good credit, a steady job, strong future prospects to be able to maintain home payments, and a sizeable down payment for a the property purchase. Navigating home financing is not easy, but we are here to help you. Pre qualifications are a great first step to begin the process for a home search and understand your qualifications for any property purchase, while also justifying your place in any negotiations with sellers. We have dozens of mortgage broker contacts and direct lender contacts for small banks, regional banks, and national banks. These relationships will offer a variety of options to fit your specific needs. Whether it is a low down payment, low rate, traditional loan, refinance, construction loan, or rehab loan – we have the contacts to put you in the right hands.

Tip 7: Title to the Property

How do I know what I am buying? Yellowtail has the resources to know you are and can buy the right thing. Our title reporting contacts will ensure the seller of the property actually owns the property and there are not any encumbrances which will hurt you as you continue into your property ownership or any other liens and property claims which may prove to be a problem in the future. Additionally, our construction and inspection contacts will bring you substantial value and peace of mind.

Tip 8: Inspect the Home

There is a tendency in the residential world to forget to “look beyond the paint”. It is fairly inexpensive to fix the appearance of any problems, but making changes to true issues can prove costly. Cosmetic property appearances can fit the layout and picture of your dream home but what happens when the wood wall frame behind the paint is rotting ? or when there are foundation issues ? Who do you turn to do deal with that mess and more importantly what about dealing with those issues before they begin? At Yellowtail, we are your top to bottom resource to identify, rectify, and rest easy with these challenging situations. Our top of the market home inspector contacts will find these issues before they start so you know any major issues prior to settlement. After closing, we will remain a resource to you so you can rely on us to point you in the right direction.

As you go through renovation projects we are here to guide you.  Our licensed contractor contacts will remind you to not only focus on the cost of materials but also labor, permits, and guide the overall timing – cost of any renovations projects.

Rent vs Buy

Remember you do not have to buy. Social norms tell us we do. However, with rent options becoming more and more prevalent with professional landlords, renting may be the best choice. Sometimes the investment or the timing is not right. Other times, the issue is the market for prices and interest rates. Either way, you will be educated on all of these items as well as all of your options so you make the right choice. If renting is the right move, we can help you with that process too.

Technology has continued to improve, allowing us to access a wide depth of statistical data. This includes multiple listing services, lender information, and projected information for the future, so you are educated on the entirety of your decision.