This past week I had the opportunity to meet a first time buyer. We went to see one of my listings, she had been referred to me by a current owner of one of my listings. Because she was a referral and because this buyer was pressed for time I agreed to meet her at the property she was interested in with the proviso that we would have a conversation about her search for a home when we met.
Well, it turns out that this buyer has been looking at properties for months mostly online but also by going to Open Houses. She has fallen in love with one property. It has everything she is looking for open space with lots of light and large kitchen because she loves to cook and loads of parking because she works odd hours.
So after months of looking she tells me she has never spoken to a mortgage broker, she has not gone to her bank, she does not have a clue if she can afford the properties she is looking at, she hasn’t a clue if she has enough cash for the down payment and closing costs and finally she is looking at condo’s and did not know that not all condo association’s are approved for FHA funding which would be the difference between a 3.5% down payment and a 20% down payment.
I suggested that she needs to find out how much financing she is entitled to before she continues her search. If she had started the process of finding properties by talking to her bank, her credit union or mortgage banker she would not be heart broken at finding a property she loves and then finding out she can’t afford it.
Getting your financing in place and making sure you have the cash needed for down payments and pre-paids first means you know what price you should be looking at when you search online or go to open houses. You can now find a property you love and you can buy it.
Had this buyer found a good buyer’s agent she would have someone to ask questions and someone to guide her through this process. Something to think about if you are starting to look for a new home…