Tips for a First-time Home Buyer
It's not uncommon for a first-time home buyer to say to me, "Gosh, just last week I called you about buying a home and now I'm in escrow! How did this happen so fast?"
The answer is it didn't. First-time home buyers start the search long before most even realize it.
The National Association of Realtors reported in 2016 that 34% of all home buyers were first-time home buyers. That's the highest percentage share reported in four years.
Here's what you can expect from your home shopping experience.
Benefits for a First-Time Home Buyer
You should buy a home. That's what you've been hearing from friends and family, right? So, by now you have likely already weighed the benefits and decided that home ownership was the best decision for you. That's a major hurdle now passed. You are focused and certain. Good.
Who Are First-Time Home Buyers?
Many first time home buyers are millennials, age 34 and younger. A survey completed by Choice Home Warranty in 2015 shows that 30% of all millennials plan to buy a home over the next 5 years.
A first-time home buyer is defined as a buyer who has not bought a home over the past 3 years. In that sense, bounce-back buyers, those who had a short sale or foreclosure, are also entering the marketplace. Core-Logic says about 1/4 of all foreclosure and short sale homeowners are back in the market, and those numbers average about 150,000 per year.
Defining Search Parameters for a First-Time Home Buyer
Almost 95% of all home searches today begin on the Internet. With just a few clicks of the mouse, home buyers can search through hundreds of online listings, view virtual tours, and sort through dozens of photographs and aerial shots of neighborhoods and homes.
You've probably defined your goals and have a pretty good idea of the type of home and neighborhood you want. By the time you reach your real estate agent's office, you are halfway to home ownership.
How Long Should It Take to Buy Your First Home?
In seller's markets, often I show only one home. After all, how many homes does one family need? A few buyers will look for years, but buyers who do that aren't particularly motivated. A motivated buyer will generally find a home within two weeks. Most of my buyers find a home within two days.
Good real estate agents will listen to your wants and needs and arrange to show only those homes that fit your particular parameters. Your agent, if she has time, might preview homes before showing them to you as well.
How Many Homes Will a Home Buyer See?
Studies show that your memory dramatically improves after consumption of carbs and slows upon consuming sugar. So, lay off the soft drinks and have a hearty meal of carbs before venturing out to tour homes. The average number of homes that I show to a buyer in one day is seven. Any more than that, and the brain is on overload. Therefore, don't expect to see 20 or 30 homes; although it's physically possible to do so, you probably will not remember specific details about any of them.
The "Red Shoes" Experience for a Home Buyer
Women will relate to this. Say, you need a new pair of red shoes. You go to the mall. At the first shoe store, you find a fabulous pair of red shoes. You try them on. They fit perfectly. They are glamorous. Priced right, too. Do you buy them? Of course not! You go to every other store in the mall trying on red shoes until you are ready to drop from exhaustion. Then you return to the first store and buy those red shoes. Do not shop for a home this way. When you find the perfect home, buy it.
How a First-Time Home Buyer Can Rate Inventory
- Bring a digital camera and begin each series of photos with a close-up of the house number to identify where each group of home photos start and end.
- Take copious notes of unusual features, colors and design elements.
- Pay attention to the home's surroundings. What is next door? Do 2-story homes tower over your single story?
- Do you like the location? Is it near a park or a power plant?
- Immediately after leaving, rate each home on a scale of 1 to 10, with 10 being the highest.
View Top Choices a Second Time Before Buying That First Home
After touring homes for a few days, you will probably instinctively know which one or two homes you would like to buy. Ask to see them again. You will see them with different eyes and notice elements that were overlooked the first go-around.
At this point, your agent should call the listing agents to find out more about the sellers' motivation and to double-check that an offer hasn't come in, making sure these homes are still available to purchase.
Making the Selection To Buy a Home
I'll let you in on a little secret. I generally know which home a buyer is going to choose, and I suspect most other agents operate the same way. It's an intuition. But I make it a practice not to steer buyers, and I insist that buyers choose the home without interference from me. It's not my choice to make.
Real estate agents are required, however, to point out defects and should help buyers feel confident that the home selected meets the buyer's search parameters.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.