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Goodbye Louboutins, Hello Real Estate

Finance
What You Should Know Before Buying Your First Home

Who am I kidding? I’ve never owned a dazzling pair of Louboutins in my life. A girl can dream though, can’t she?

Though there is absolutely nothing wrong with treating yourself to a delicious pair of high heels, the best investment you can make is actually in real estate— especially right now.

Before you start your shopping spree, here’s three things you need to know about buying your first home.

Know what you can afford

Women love to dream big. And there’s nothing wrong with that. But we risk getting ahead of ourselves.  For example, how many of us have planned our entire wedding with no groom-to-be in sight? I’m totally raising my hand. Guilty as charged.  So when it comes to real estate, one of the worst things a prospective homebuyer can do is look for a home before she knows what she can afford. She knows where she wants to live, how she wants to decorate, and how much closet space she MUST have, but she has no clue that the price range she can actually afford is $50,000-$100,000 less than that house she has been eyeing for the past two weeks.

So first things first: Go out and get yourself a home loan pre-approval from a mortgage lender or bank of your choice. Gather your most recent paystubs, your last two years of federal tax returns, and your bank statements to prove your assets and available funds for down payment. Once your lender verifies your income against your expenses via credit report, they can determine how much home you can afford.

Don’t take their word for it

Loan companies only look at the expenses you have reported on credit, so you need to determine for yourself if the amount you qualify for is within your means. The banks don’t look at expenses such as cell phone bills, utilities, groceries, gas, etc. They have no idea how much you love to spend on traveling, shopping, and any other meaningful hobbies.  It’s true that owning your own home requires some sacrifice, but you don’t want to be kept prisoner because you can no longer afford to go out on the town with the girls! So be realistic about what you can truly afford and what you’re willing to sacrifice to buy a home, and see if they match up against that pre-approval you’ve got in your hands.

Work with the best

The next thing you’ll want to do is find yourself a rock star real estate agent who can help you locate homes that suit your taste and budget (stay away from the champagne if you can only afford the beer, ladies). A great agent will take note of your wants and needs, and will help you find the right home. Sure, you can surf the internet for homes that are for sale in your area all by yourself, but real estate agents have the inside scoop. Agents have access to homes that are listed in the Multiple Listing Service (aka the MLS), which are not always syndicated for public access. On top of that, real estate agents have access to things called “pocket listings,” which means that the general public has no clue that these listings even exist, and they are not featured on the MLS either.

If those still aren’t good enough reasons to go out and get yourself a real estate agent, then here’s a door-buster deal for you: Agents work for FREE until they find you a home, and when they do, their commissions almost always come from the seller’s proceeds from the sale, not your pocket. So bet your bottom dollar that if you’ve got a great agent, that agent is going to work extra hard to find you the perfect home—and fast. Just remember to be exclusive with your agent. Commitment on each end makes for a better relationship. If your agent is working hard for you, the worst thing you can do is keep your options open and give someone else your business.

Interview a couple of different agents and commit to the one who you feel confident and comfortable with. Great agents will typically have client testimonials on hand and won’t bat an eye if you ask to see them. Who doesn’t want to show you how many gold stars they have? So go out and find yourself an agent who is motivated and who isn’t afraid to go above and beyond to make your experience in buying your home a great one. Most importantly, make sure your agent isn’t afraid to do more than just send you listings generated from an auto search.

Happy Shopping!

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Vanessa Clifford
Vanessa Clifford is a San Diego native and works as a Realtor® in Escondido, CA. Vanessa's ten years of experience in the mortgage Industry, along with her determination to deliver top-quality service, are her greatest assets in helping her clients to achieve their real estate goals. You can follow Vanessa on Facebook at http://facebook.com/VanessaCliffordHomes.
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