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Ahead of spring market, 5 tips for first-time homebuyers

Ahead of spring market, 5 tips for first-time homebuyers

WASHINGTON — Along with singing birds and longer, sunnier days, “for sale” signs posted in green lawns are a sure sign of spring.

Now through summer is the busiest time of year in the real estate industry, and expert Corey Burr said it all has to do with the school calendar.

“Whether or not we have children, our human biorhythm is based on a school schedule and many people like to move during the summer months — whether that’s May, June, July or August,” said Burr, senior vice president at TTR Sotheby’s International Realty.

“So then accounting for the marketing time and the settlement time, it usually means that a lot of properties come on the market in February, March, April and May.”

If you’re in the market to buy a home this spring, Burr has some tips:

#1: Speak with a loan officer
You saved up for a down payment and have a pretty good idea of how much you can spend on a monthly mortgage … but how much house can you really afford?

That’s where a loan officer can help.

“That person can tell the buyer how much is needed for a down payment and how much is needed for closing costs,” said Burr, who added that many first-time homebuyers forget to account for additional fees that come with buying a home.

“Closing costs can range from 2 to 4 percent of the purchase price, so it can be a lot of money depending on the purchase level.”

A loan officer can also help a buyer better understand his credit score.

“Once the initial credit score is run, if there are any dings on it or if there are easy ways to improve it quickly, a loan officer is versed in those fixes, and that can make a big difference in the interest rate that a buyer gets as well as the loan program that the buyer would qualify for in terms of the needed down payment,” Burr said.

“It’s very important to figure all this out because this becomes the road map for the buyer for looking at open houses and to discuss with their realtor so that they’re not overshooting their price range or undershooting it.”

#2: Location over luxury
When it comes to shopping for a house, it’s important to focus on where, exactly, you want to live, and not become distracted by fancy fixtures and other aesthetics.

“Even though it might be very sexy to find a house with a new kitchen and a new master bathroom and a new roof and a finished basement, keep in mind that the location can’t be changed,” Burr said.

“Other improvements to a house can be made. One can put in a new kitchen or renovate bathrooms over time, but that house cannot be picked up and put in a more desirable location or a better school district.”

#3: Don’t skip a home inspection
One of the most important things you can do before sealing the deal on a new home purchase is to include a home inspection in the contract.

“It’s the opportunity for the buyer and the inspector to uncover defects in the property while there’s still an opportunity to negotiate the fixing of those defects,” Burr said.

Often, a motivated seller will offer credits to a potential buyer to help offset the cost of repairs, or will even hire a contractor and take care of the repairs before settlement.

#4: Don’t buy too much house
By the time a down payment, closing costs and other fees are accounted for, buying a home can quickly drain one’s bank account. And Burr said that is why it’s important not to buy a home that’s too expensive for your budget — especially since things are bound to break at some point.

“In case the roof starts to go bad or there’s a problem in the basement, or if the heating and air conditioning system goes bad — these are just all things that you have to keep at the front of your mind when you buy something,” Burr said.

“If you buy too expensively, you’re going to become house poor, and that’s not a great situation to be in.”

#5: Make your offer stand out
Even though there are more houses to choose from in the busy spring market, competition is still stiff — especially in a “hot market” area, such as D.C.

Burr said one thing that can make your offer stand out among others is a pre-offer inspection.

“Right after it comes on the market, and you feel like you want to make a bid on it, you can make your offer cleaner by hiring an inspector to do an inspection before offers are due,” Burr said.

This removes the home-inspection contingency in the purchase offer, making it more desirable to the seller.

“When you’re in competition with other buyers, and we’re bound to have it in certain neighborhoods in the spring market, you want to have a pre-offer inspection, you want to make sure that your financing is taken care of, you might still need your appraisal contingency to make sure that the property appraisers well, and then ask for the timing: If you can be flexible, make the timing work for the seller,” Burr said.

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