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Top Tips for 1st-Time Home Buyers in Kitsap County WA – Tip No. 1

“Don’t Bite Off More Than You Can Chew!”

As a licensed professional real estate broker here on the Kitsap Peninsula, perhaps one of the best bits of advice I normally dispense to 1st-Time Home Buyers is for them to stay within their means. By that, I mean, determine your workable budget for purchasing your house, and stick to it.

I have the pleasure of working with lots of 1st-Time Home Buyers, especially Active-Duty Military Service Members and their families. Kitsap County WA is home to a number of U.S. Naval installations, like Bangor Submarine Base, Puget Sound Naval Shipyard, and Naval Undersea Warfare Center Keyport.

Unfortunately, it’s easy for 1st-Time Buyers to get caught up in the excitement of purchasing their first home and lose sight of their budget. Especially if you’re working with an agent/broker that likes to push the budget envelope and show you houses just beyond your financial reach, like dangling a carrot in front of a horse.

When you meet with your mortgage consultant to obtain pre-approval for your loan, they usually establish a price range or maximum amount of money you’re qualified to borrow, based on your credit and debt-to-income ratio. This is the figure that drives your home-searching process.

Normally, when I meet with 1st-Time Buyers (or any Buyers for that matter), they’ve already been fully pre-approved by their mortgage lender and the price range/limit has been determined. Taking that number, I begin my searching process, scouring the Northwest MLS for homes that meet their needs/requirements. I may increase the listing price criteria slightly, depending on the price point, in hopes of finding properties that have been languishing on the market for a while, and might be potential candidates for a price reduction.

But when it comes to finding ‘the’ right home for my Buyers and putting in an offer, I attempt to negotiate a contract price that is below their qualified loan amount.

First-Time Buyers are usually young singles or married couples, just starting out in their careers. The last thing they need is a huge sucking black hole mortgage payment that robs them of their ability to enjoy life.

But it’s just so tempting to push the limits of your limit, especially when you are looking at homes that are outside of your range. The houses you can’t afford are always much more fun and attractive than the ones you can afford. You try to convince yourself that you ‘deserve’ the perks of a higher-priced home. With that promotion you’re sure to get in the next couple of years, a couple hundred dollars more a month won’t matter. Right?

Well, my advice to 1st-Time Home Buyers here in Kitsap County WA is this, “Don’t Bite off more House than You can comfortably pay for!” Find a home that serves your purposes and doesn’t force you to eat a steady diet of rice and beans. When you own your first home, don’t let it own you!

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Rich Jacobson is a licensed real estate broker providing Knowledgeable Empowerment and Relentless Representation for his clients of residential properties and vacant land throughout all of Kitsap County WA and portions of Pierce, Mason, and Jefferson Counties. You can also find him at KitsapLife.com, ActiveRain, Everyday CK, HomesByHarbors, and Crabbing in the Hood, or e-mail:  kitsapagent@gmail.com

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This morning during the NAR (National Association of Realtors®) Mid-Year Legislative Meeting in Washington, D.C., HUD Secretary Shaun Donovan said that the Federal Housing Administration is going to begin permitting its lenders to allow 1st Time Home Buyers to use the $8,000 tax credit (originally provided in the American Recovery and Reinvestment Act) as a down payment.

Previously, most Buyers wouldn’t receive the credit until after they filed their tax return, and as such, it was proving to be a deterrent in keeping some people from using the credit. NAR has been actively pressing for the change.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at “The Real Estate Summit Advancing the US Economy” at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

For the full story, go HERE.

C O R R E C T I O N / U P D A T E:

I just came across this greatly informative video on Facebook from my good friend, Ken Cook, with Novation Mortgage in Marietta GA. Evidently there is some misinformation coming from the Feds regarding the use of this credit as a down payment. Fancy that!

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Rich Jacobson is a licensed real estate professional providing knowledgeable empowerment and relentless representation for his clients of residential properties and vacant land throughout all of Kitsap County WA and portions of Pierce, Mason, and Jefferson Counties. You can also find him at KitsapLife.com and Crabbing in the Hood, or e-mail:  kitsapagent@gmail.com

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As a licensed real estate professional here on the Kitsap County Peninsula in scenic Washington State, perhaps the favorite part of my job involves helping 1st-time home buyers realize their dreams of home ownership.

Such was the case with a young Navy couple, TR & Arwen, who closed on their home in Port Orchard WA.

This was one of the most enjoyable transactions I’ve had the privilege of being involved in for quite some time!

TR & Arwen came over from Hawaii, under orders courtesy of Uncle Same and the U.S. Navy. At the time, TR was in the process of making Chief Petty Officer, so it was a very eventful time for both of them!

I had first made contact with Arwen nearly a year prior to them actually coming over from Hawaii. She found me through ActiveRain, one of several Internet social networks that I participate on. We exchanged e-mails, shared MySpace profiles, poked each other on Facebook, and kept in consistent contact throughout the entire process.

When they arrived here in Kitsap County WA, we were fortunate to find a really great home in Port Orchard WA. It had been recently remodeled – new paint, carpets, appliances, kitchen cabinets & counters. Downstairs was the perfect ‘Man’ room for TR. There was even a fenced yard for the dog.  We were able to negotiate an extremely attractive contract with the Sellers, and close ahead of schedule without any difficulties.

This is what being a licensed real estate professional is all about – helping valued clients to achieve their home buying and selling goals & dreams!

This transaction was the direct result of my involvement on various social networks on the Internet. While the vast majority of my business comes from past clients & referrals, with the current market conditions being what they are, it’s helpful having another source of potential clients, especially Buyers!

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Rich Jacobson is a licensed real estate professional providing empowerment and relentless representation for his clients of residential properties and vacant land throughout all of Kitsap County WA and portions of Pierce, Mason, and Jefferson Counties. You can also find him at KitsapLife.com and Crabbing in the Hood.

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This is the tenth and final installment in an on-going series of posts dedicated to helping 1st Time Home Buyers successfully achieve their home purchasing goals.

We have been identifying and discussing, in chronological order, key events in the home buying process. In our last discussion, we indentified several last minute obstacles/difficulties that Buyers may experience in a post entitled, “Potential Pitfalls in the 11th hour.”

This time, we’ll talk about what Buyers can expect in the final days leading up to their closing and what to aniticpate beyond, in an article called, “Are We There Yet?”

Remember back when you were just a kid, and your family took that unbearably long cross-country vacation, all smashed together in an old beat-up the station wagon? And getting to your destination seemed to take FOREVER?

Well, that’s kind of the way it is in the final days leading up to your closing! Well, just be patient, you’re almost there!

Once your loan documents arrive at the escrow company, it’s normally just a matter of the Escrow Officer ensuring that all necessary documentation is prepared and ready for signing. Based on all of their input, they will draft a HUD-1 Statement. This is a projected detailed estimate of both parties (Buyers and Sellers) closing costs. You will receive a copy of this estimate prior to your signing, and so will your Agent. Now is the time to review these numbers carefully, with both your Agent and your Loan Officer, to verify that all the numbers are correct and correspond to what you had anticipated.

The Escrow Officer will contact you to schedule a time for you to come into their office to sign all the closing documents. For most standard residential transactions, you can plan on the signing to take at least an hour, depending on how in-depth you wish to read and review all the documents. The Escrow Officer will instruct you on what you will need to bring to the signing (typically your Driver’s License and any funds necessary to close the transaction),

In some instances, you may have negotiated with the Sellers for them to contribute to your closing costs. In addition, any Earnest Money that you deposited into escrow when you first went under contract will either be applied to your closing costs, or credited back to you at closing. Reviewing your HUD-1 statement will help you to aniticpate whether or not you will need to bring money to your signing. The escrow company usually requires the funds to be in the form of a certified cashier’s check.

One thing many people forget in the final stage of the home buying process is to contact all of the local utility companies and have them switch the billing over to your name. Your agent should be able to provide you with a list of utility companies that serve the property, along with their contact numbers. There are few things more frustrating than moving into your new home and discovering you have no power, water, or gas!

And, depending on the type of property, it might be beneficial for you and your agent to conduct a final walk-thru, prior to closing, just to ensure that everything is as specified per contract.

Now realize that closings can vary significantly from State to State. When we bought our house in Chicago, everyone was there for the signing – our agent, our attorney, the Sellers, their agent, and their attorney. We all sat around the table and passed the documents around for signatures. At the end of the signing, we got the keys to our new home!

Here in Washington State, Buyers typically come in to sign a day or two before the actual closing takes place. The Sellers come in separately, many times on different day altogether. This tends to make the process less intimidating and more comfortable for both parties.

Once you have signed all your documents, they are normally sent overnight to the Lender for final review. In most instances, the following day your loan is funded. Later that same day, the escrow company sends documents by courier to the County courthouse where the new deed is legally recorded. The recording numbers are furnished to the escrow company, and the transaction is officially closed, and the house is YOURS!

Your Real Estate Agent will have made prior arrangements with the Seller’s Agent to obtain the keys. Once escrow has informed them that your loan has been funded and they have recording numbers, the transaction has closed and you can take possession.

Before you begin moving your household goods inside, take time to tour the entire home and premises:

• Verify that you have adequate power, water, and gas servicing the property.
• Are there instruction manuals for all the appliances and primary systems (furnace, water heater)?
• Did the Sellers remember to leave the garage door openers?
• Does your neighborhood have locked mailboxes, and did the Sellers provide you a key?
• Is there a trash can, or will you need to purchase one? Check with your Disposal company to determine acceptable containers.
• As a safety precaution, have all the locks changed as soon as possible.

A good real estate professional never disappears after you’ve closed. There is always something that inevitably comes up after the fact. So don’t hesitate to contact your agent if there are any issues or concerns. Your complete satisfaction and future referral/recommendations are very important!

Enjoy this day! It is truly a momentous occasion! You’ve now joined the ranks of being a ’Homeowner!’ Take some time at the end of your busy day to journal your thoughts and impressions. This is an event you will want to capture for many years to come!

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