Elephant Packing House, Fullerton, California

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 Forgetting about the hidden costs

You grossly underestimated what you can afford to pay each month. You factored in the purchase price of the home but didn’t consider the cost of taxes, insurance, utilities, and fees. There are several hidden costs that first-time home buyers neglect to prepare for. They can be anything from the closing costs to appraisal fees, escrow fees, homeowner’s insurance fees, property taxes, and even moving costs. Another factor is the cost of repairs and maintenance. “When you’re renting and the furnace goes out, what do you do? You call the landlord,” says Tom Vanderwell, mortgage officer for Fifth Third Bank in Michigan. “When you own a house, what do you do? You have to fix it yourself.” You may find there are numerous “nickel and dime” things to account for that could add up to a significant chunk of money over time. 

5. Not using professional help

Sure, it’s possible to go out and buy a home without the aid of a professional real estate agent. But think about how much time and stress a good agent can save you. For starters, Realtors have access to all the homes on the market through the multiple listing service, or MLS, plus all the ones that are under contract and have been sold. A specialist has time to sift through all of these listings, says Boss, and make the appointments to show you the houses, create comparative market analyses to determine proper pricing, and meet with necessary inspectors. Real estate agents also can help buyers traverse a taxing, 70-page legal contract. “I would want someone who is going to look out for my interests first and foremost,” says Boss. “Someone who knows the contracts, who has experience negotiating, and who can walk me through the entire process smoothly—step by step—and make sure I get the house that’s right for me.”

6. Picking your real estate agent and lender blindly

First-time home buyers, Boss says, are generally more time-consuming than the average buyer and require more attention. A good real estate agent will be friendly and accommodating, show only homes that fit your parameters, and help you with strategies during the bidding process—but never pressure you into something you’re not comfortable with. “It’s important that the Realtor be experienced with first-time buyers, understand their wants and needs, and be able to connect with them well,” says Boss.

 Similarly, the buyers should feel at ease with and have complete confidence in their mortgage lender, and they should fully discuss and understand their financing options with that lender. “Don’t apologize for asking questions,” says Vanderwell, who stresses the importance of knowing what you’re getting into. “There’s a pretty substantial chunk of people who are in really rough straits right now and would not have been had they done their homework.” 

7. Thinking you’ll get everything on your “wish list”

Another mistake people make is being too close-minded while searching for their home, says Boss. He suggests sitting down with your real estate broker before searching for a home and creating a need/want list. Some of the items you might want to include as “must haves” or deal breakers are the towns you’d want to live in, square footage, or accessibility to transportation. The second part of the list would be things you don’t necessarily need but wish to have, such as a garage, new kitchen appliances, or an extra room for an office. “As you search for your home, you may realize there are certain parameters you really want or don’t want,” says Boss. “Understand that a certain amount of flexibility is essential.” Your aim is to be able to afford everything you need—as well as some items you want—all while staying within a long-term budget.  Check back tomorrow for part 3!

Interested in receiving more information on this article. Thinking about  selling your house? Buying your first home? Give me a call,  Carlos J. Amador at (714) 626-8880 ext 117 or visit my website at www.yourfullertonhome.com  . For a no obligation free consultation.

Free first time home buyer information for Fullerton, Orange County, and Los Angeles residents. Real Estate information for Fullerton, Orange County and Los Angeles residents.

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