Keys to Success for First-Time Homebuyers

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SOURCE: Keeping Current Matters

Buying your first home is an exciting decision and a major milestone that has the power to change your life for the better. As a first-time homebuyer, it’s a vision you can bring to life, but, as the National Association of Realtors (NAR) shares, you’ll have to overcome some factors that have made it more challenging in recent years:

“Since 2011, the share of first-time home buyers has been under the historical norm of 40% as buyers face tight inventory, rising home prices, rising rents and high student debt loads.”

That said, if you’re looking to purchase your first home, here are two things you can consider to help make your dreams a reality.

Save Money with First-Time Homebuyer Programs

Being able to pay for the initial costs and fees associated with homeownership can feel like a major hurdle. Whether that’s getting a loan, being able to put together a down payment, or having money for closing costs – there are a variety of expenses that can make buying your first home feel challenging. 

Fortunately, there are a lot of public and private first-time homebuyer programs that can help you get a loan with little-to-no money upfront. CNET explains:

“A first-time homebuyer program can help make homeownership more affordable and accessible by offering lower mortgage rates, down payment assistance and tax incentives.” 

In fact, as Bankrate says, many of these programs are offered by state and local governments:

“Many states and local governments have programs that offer down payment or closing cost assistance – either low-interest-rate loans, deferred loans or even forgivable loans (aka grants) – to people looking to buy their first house . . .” 

To take advantage of these programs, contact the housing authority in your state and browse sites like Down Payment Resource.

The Supply of Homes for Sale Is Low, So Explore Every Possibility

It’s a sellers’ market, meaning there aren’t enough homes on the market to meet buyer demand. So, how can you be sure you’re doing everything you can to find a home that works for you? You can increase your options by considering condominiums (condos) and townhomes. U.S. News tells us these housing types are often less expensive than single-family homes:

“Condos are usually less expensive than standalone houses . . . They are also less expensive to insure.”

One reason why they may be more affordable is because they’re often smaller. But they still give you the chance to get your foot in the door and achieve your dream of owning and building equity. Beyond that, another major perk is they typically require less maintenance. As U.S. News says in the same article:

“The strongest reason for purchasing a condo is that all external maintenance is usually covered by the condo association, such as landscaping, pool maintenance, external painting, paving, plowing and more. This fee also covers some internal maintenance, such as gas, electric, plumbing, HVAC and other mechanical systems.” 

Townhomes and condos are great ways to get into homeownership. Owning your home allows you to build equity, increase your net worth, and can fuel a future move.

The best way to make sure you’re set up for success, especially if you’re just starting out, is to work with a trusted real estate agent. They can educate you on the homebuying process, help you understand your local area to find options that are right for you, and coach you through making an offer in a competitive market.

Bottom Line

Today’s housing market provides some challenges for first-time homebuyers. But, there are still ways to achieve your goals, like utilizing first-time homebuyer programs and considering all of your housing options. Connect with me so you have an expert on your side who can help you navigate the process.

SOURCE: Keeping Current Matters

May 31, 2023 Weekly Market Watch with Chris Doucet

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May 24, 2023 Weekly Market Watch with Chris Doucet

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Closing on a House: Settlement Tips for Home Sellers

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SOURCE: Realtor.com
Before closing on a house, you need to get to the settlement table. You’re near the end of the process of selling your home, but don’t breathe a sigh of relief just yet. While it’s certainly true that you can let go of the anxiety of needing to show your home at any moment, you still need to cooperate with your buyer, the buyer’s agent, and the commitments made in the contract.

As a seller, here’s what you need to know about the settlement process.

What contingencies impact sellers before closing on a house

While the burden is on the buyer to finalize financing for the home purchase and to obtain homeowners insurance, some contract contingencies will impact you, too, especially if you’re living in the home.

Before closing on a house, most transactions include a home inspection, so you’ll need to make your home available to the inspector and then negotiate with the buyers about anything the inspection turns up according to the terms of your contract.

Aside from the home inspection, some contracts (and some lenders) call for a termite inspection and a radon gas inspection. In those cases, you or your listing agent or the buyer’s agent will need to make the home available for inspection.

Another important step prior to closing on a house is the appraisal. If the appraisal comes in higher than the sales price, then the buyers can relax in the satisfaction they’ve purchased a home for less than its market value. Once the contract has been signed, a seller can’t renegotiate the price higher.

But if the appraisal comes in lower than the sales price, then the buyer’s lender will limit the loan amount to that lower value. The buyer may have to come up with additional cash to cover the financing gap or may ask you to renegotiate the contract. Your agent can advise you about the best way to handle this situation, but you and the buyer are also bound by the contract terms.

Before you go to settlement, you should go over the contract with your agent and ensure you’re ready to fulfill any obligations you’ve made in terms of what items will be conveyed to the buyer as well as any repairs or improvements you promised to make.

Negotiating a settlement date

Buyers and sellers typically negotiate a settlement date that is mutually agreeable. If you have sold your home and are not yet ready to move into your next residence, you can sometimes negotiate a “rent-back” with the buyer that allows you to stay in the home after the settlement by paying rent to the buyer.

In general, lenders restrict rent-back to a maximum of 60 days. Check with your buyer and your agent if you need to rent back for longer than two months.

Alternatively, some sellers allow the buyers to move in before settlement. In either case, it’s crucial to have a written agreement about who is responsible if something happens to the house or its contents during the transition period.

Settlement services

The decision about who provides settlement (also known as closing or escrow) services varies from one market to another. In many places, the buyer chooses the settlement company, but in others the seller chooses. When closing on a house, the buyer will provide funds to buy your home and the settlement agent will review the sales agreement to determine what payments you’ll receive. The title to the property is transferred to the buyers and arrangements are made to record that title transfer with the appropriate local records office.

At a typical closing, adjustments are made to the final amounts owed by the buyer and you as the seller. For example, if you’ve been paying your property taxes through an escrow account, you may be credited extra for prepaid taxes or you may receive less money at settlement if the property taxes haven’t been paid properly.

Once the settlement papers are signed and the house keys are transferred, you’re free to move onto your next home.

SOURCE: Realtor.com