Archive for Tolin Peterson

What if I Can’t Afford What I Want?

What if I can’t afford what I want?  As prices continue to rise, we hear this more and more from our first time home buyers.  You may want a certain number of bedrooms and bathrooms, but your price range may make it tough to accomplish this in the neighborhood you want to be in.

So what are my alternatives?  The first and maybe easiest way to accomplish this it to look at other property types.  For instance, if you are looking for a single family home but feel like they’re out of your price range, you could start looking at townhouses or condos.Two lawn chairs

But I’ve always wanted a yard.  We realize for some first time home buyers, a single family home is all they’re willing to consider.  The next possibility is moving outside your specific geographic area to see if outlying areas are more affordable.

But we have to stay in our existing school district!  Sometimes first time home buyers are absolutely NOT willing to look outside a specific area due to school zoning or other reasons.  A third option is considering a property that needs some cosmetic updates.

As long as I get the number of bedrooms/bathrooms I want.  It may even make sense to look at a home with LESS bedrooms and baths, as long as it has the potential to add these things later.  Many of our first time home buyers are considering starting families but don’t have them yet.  So a strategy could be looking at homes with unfinished basements, where you could add bedrooms and baths later.  The point is, when buying your first home it may make sense to think outside the box.

Don’t make the biggest financial decision of your life without getting educated!  If you’d like to learn more about the home buying process, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.

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Do I Really Need a Credit Approval?

Do first time home buyers really need a credit approval?  A credit approval is so much more than a prequalification or even a preapproval.  It puts first time home buyers in a much stronger position, as it verifies for the seller that you can get a loan, and also close in a timely fashion.

Why isn’t a prequalification good enough?
  A prequalification can be issued after a quick phone conversation.  So it doesn’t give the seller any assurance that you can get a loan, as the loan officer hasn’t actually reviewed any of your documentation.

What about a preapproval?  Preapprovals USED to be adequate for first time home buyers.  This is when you submit all your income documentation to your loan officer for their review.  In this case they aren’t getting approval from underwriting, they’re just assuming underwriting should be ok with everything they’ve already reviewed.  Now a days preapprovals may not be enough.

So how is a credit approval different?  With a credit approval, the loan officer underwritercollects all your documentation, and then submits it to underwriting for a FULL approval.  This makes the seller confident that you can obtain the loan, and it also makes it so you can close the loan quicker since half the work has already been done.  Sellers usually like to receive their money ASAP!

But that sounds like a lot more work for me!
  A full credit approval may be more work up front, but it’s work you’re eventually going to have to do anyways.  It also doesn’t cost you anything!  So if you can do something for FREE that puts you in a stronger position, why not do it?!?

Don’t make the biggest financial decision of your life without getting educated!
  If you’d like more information about the credit approval process or the home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE workshops.

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First Time Home Buyer Market in Seattle

How’s the first time home buyer market doing in Seattle?  Competition is still STIFF.  Low inventory levels are still leading to multiple offer situations and even some bidding wars.  Months of inventory (essentially supply vs. demand) is at about 1 month for entry level housing in North Seattle.  Many other first time home buyer demographics are seeing similar trends, which means its a seller’s market in many places around the Greater Seattle area.

So when will it get better for first time home buyers?  In When Will We See More Listings?, we described a potential timeline for more listings coming on the market in the near future.  We’re still speculating that this may come to fruition in late spring/early summer of this year.  If this is the case, first time home buyers should have more to choose from in the next 4-6 months or so.

So should first time home buyers wait until there are more choices? 
In our past blog we also described some pros/cons for waiting.  There are numerous variables to consider such as appreciation levels, interest rates, life circumstances, etc.  It really just depends on your specific situation, so you should gather information based on YOUR goals, not necessarily what the media is covering in general.

Don’t make the biggest decision of your life without getting educated! 
If you’d like to learn more about first time home buyer inventory levels in your specific area, or about the home buying process in general, please go to our Calendar/Reservations page and sign up for one our FREE First Time Home Buyer workshops.

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First Time Home Buyers Should NEVER Buy at an Open House‏!

Why shouldn’t first time home buyers buy at an open house?  Open houses can be traps for first time home buyers.  You can OVER PAY.  You can end up with NO REPRESENTATION.  And you can end up with BUYER’S REMORSE.

Why would you over pay at an open house?  Especially in today’s market, open houses can be feeding frenzies for first time home buyers.  They are generally crawling with buyers, so even if no one else is interested in the house you may have the perception that it will be a bidding war and therefore end up offering more than necessary to get the house.

How do I make sure I have representation?  We’ve written past blogs about Who the Listing Agent Represents. Dual agency (working with the listing agent) is something you want to avoid like the PLAGUE, especially considering first time home buyers generally don’t have to pay for their OWN representation.

How do open houses increase buyer’s remorse?  Again, if there is a lot of activity at the open house, you may get emotional and make a snap decision.  This may lead to buyer’s remorse as you may have decided not to buy the house under different circumstances.

So how do I get inside the house?  All first time home buyers should hire a professional real estate agent.  This will ensure that they have their own representation and a professional looking out for their best interest.  Your real estate agent will schedule PRIVATE showings so you can view the home without the unnecessary duress of an open house.

Don’t make the biggest financial decision of your life without getting educated!  If you like to find out more about hiring a real estate agent or the home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.

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Should I Hire Multiple Realtors?

Should I hire multiple real estate agents when buying a home?  We run into this question a lot.  Generally, the answer is, “No, you shouldn’t.”  Working with more than one agent usually does you more harm than good.  If you’re looking in two DRASTICALLY different areas, say Seattle and Tacoma, it may make sense to work with different agents from respective areas.  But if you’re mostly looking in the same general geographic area, there’s usually no real benefit.

But my dad said you should always work with as many agents as possible!  Many people think by using multiple agents, they’ll have access to more listings.  This may have been true decades ago, before the internet was invented.  But now a days, most listings are in the MLS and therefore online, so any agent you hire should have access to all available listings.

But if I don’t have to pay my agent for their time, how can it hurt to hire several?  Some people feel that pitting multiple professionals against each other will make them work harder.  It actually tends to be the opposite.  If everyone involved knows you might buy from someone else, they may just try to make a quick sale and sell you the first thing you see.

So if I can find listings online, why should I work with an agent at all?  An agent should be doing much more than showing you homes.  They should be educating you as to whether or not the home is a good investment, structurally sound, will have good resale value, etc, etc, etc.  This is a big decision and you need to align yourself with a professional that will have your best interest at heart.

So how do I know which real estate agent to work with?  You should talk to more than one professional.  Learn which questions to ask to ensure that the person you ultimately hire is the right one for the job.  Like any industry, there are awesome people in the real estate field and lame ones.  Make sure you pick the right one.

Don’t make the biggest financial decision of your life without getting educated!  If you’d like to learn more about how to hire the best real estate agent for you, or the home buying process in general, please go to our Calendar/Reservations page and register for one of our FREE First Time Home Buyer workshops.

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