IN Tredyffrin-Easttown Summer 2018 - Page 19

SPECIAL SECTION REAL ESTATE What First-Time Homebuyers Should Know Importance of a Local Real Estate Agent Last year was a great year for new homebuyers. According to the National Association of Realtors, about 35 percent of the homebuying market was made up of first-time buyers. Yet, each year is not created equally in the mortgage industry and real estate market. Changes happen frequently and it is often hard to keep up. If you’re looking to break into real estate for the first time, here are some insights into how to navigate the market. You wouldn’t undergo surgery without a surgeon, or do a root canal without a dentist, so why would you buy or sell a house without a real estate agent? Agents have in-depth knowledge of local communities, an insider’s view of the real estate market, and early access into listings that go on the market. By having a real estate agent on your team, you can take full advantage of these perks when trying to buy or sell a home! Moving into a new community? A real estate agent is familiar with the lay of the land—from what the neighborhood is like, to the local hotspots. He/she will be able to guide you in the decision that best fits your ideal location and wish list. Making a move into a new neighborhood or town with kids makes a real estate agent even more necessary. Agents can provide an inside look into school districts, sports teams and available extra- curricular activities that could be a game-changer for you and your family. Having an agent as an insider into all things local is just one benefit. With access to other real estate professionals, such as mortgage lenders, home inspectors, attorneys and title companies, agents are valuable in streamlining the process of making a transaction. They also have access to the multiple listing service (MLS) to provide you with information on available homes. Access to the MLS is restricted to licensed agents and brokers, providing them with a wealth of knowledge that they can then pass along to you. This includes information that sellers don’t necessarily list on public sites, such as square footage, seller disclosures and HOA regulations. Armed with facts from the MLS, including comparable listings in the area, real estate agents can negotiate on your behalf. They are able to develop an offer that reflects market value, while still staying within certain budgetary guidelines. Once these offers are reviewed, agents can make recommendations from inspections on repair costs and how to appropriately counter an offer. If you are in the market to buy or sell, start by doing some research on a real estate agency that is right for you. Have new neighbors? Ask who their agents were. They obviously did a good job of selling your neighborhood to buyers. If referrals aren’t available, look for a local office in your neighborhood or in the neighborhood where you’re interested in moving. The agency can offer guidance and support throughout the entirety of your home buying or selling process. SAVING. Step number one for a first-time homebuyer should always be saving. Take a look at your current finances. It’s recommended that your mortgage payment not exceed 30 percent of your gross monthly income. See where you can cut back spending to put away a little extra out of your paycheck every month for your new home. Not only can this cash go toward a down payment, but most likely you’ll need furniture, appliances, and decorations to furnish your new home. Don’t just calculate the amount of money needed for a down payment. Keep in mind the unforeseen expenses such as home repairs, agent fees and closing costs. You can never save too much! 1. Mortgage. Applying for a mortgage can be an intimidating process, but if you prepare accordingly, you’ll be happy with the outcome. According to LendingTree.com, mortgage lenders are allowing higher debt levels for borrowers with lower down payments (as little as 3 percent on a conventional mortgage loan). You may not need the typical 20 percent down that was required of homebuyers a few decades ago. If your debt-to-income ratio is high, you may not have to worry. Mortgage companies are making it easier for borrowers with more debt to still qualify. 2. Mortgage rates and tax limits. Unfortunately, not all news is good news for first-time buyers. Mortgage rates are predicted to continue to rise in 2018, expected to reach 5 percent toward the latter half of the year. In addition, new tax laws that went into effect at the beginning of the year have new limitations. Be sure to look into mortgage interest deduction and other tax deduction limits that may affect your taxes for 2018. 3. Agent. Having a real estate agent in your corner for a first-time purchase is key. Agents will not only help you navigate the home-buying process, but can also be a valuable resource for an inside look at new homes that go on the market. This gives buyers the opportunity to view homes that may not have made it onto real estate websites for public viewing. 4. Location. Your dream house may not be in your dream location, and your dream location may not have your dream house. Don’t Continued on next page > TREDYFFRIN-EASTTOWN  S U M M ER 2018 17