Click the image to hear their story.
These first-time buyers came to me in an unusual way. By referral yes, but not your typical "hey, use this real estate agent, she is great" type of referral. I was selling a vacant buildable lot on the other side of town, and the soon-to-be owner/buyer and I enjoyed working together from the get-go. He then asked me to help his tenants purchase a rental property he owned.
Enter first time buyer.
Profile: Young, creative 20-something professionals living in downtown Bozeman, they'd been renting the house for a year already and felt right at home. The owner had done a lot of upgrades prior to their move-in, making it a sound and comfortable 50's era home with a very large lot complete with gardens and plenty of room for the dog.
The Market: The real estate market in Bozeman Montana and the Gallatin Valley region continues to move at a fast pace due to lack of inventory and many motivated buyers. Properties that are well priced and located in desirable neighborhoods usually go under contract within a few days, especially those in the under $300K range.
Most buyers that get their contract accepted over other interested buyers are the ones that have already done work before bringing their offer to the table. Taking a few steps ahead of time, such as getting pre-qualified and making sure your agent understands not only your financial situation but must-have list for a property, ensures you are in the best position to make an offer stand out from the rest. We'll review those steps below.
As a first time home buyer, I expected the process of owning my first house to be intimidating and scary, but to my surprise it was the opposite.
In this particular situation, the buyer moved very quickly to make sure their lender had everything they needed, and wasted no time in checking off all of the contingencies of the contract as we moved through our deadlines. Communication between all parties allowed the owner/seller to feel comfortable he had made a great choice in working with them. A good agent will stay on top of all steps in the process as well is what is coming next, as well as helping find any professionals you may need to help with inspections and other details. You will not be going it alone.
Here are some steps to take to ensure that you are positioned correctly when you find that gotta-have-it property.
This is different from pre-qualified. To be pre-approved means a lender has pulled your credit report, taken a full application from you, reviewed your tax returns and had conversations about your income, debt and other issues that might affect what you can afford.
Many buyers shy away from this very important step, or don't take it until AFTER they've found a property. This is often one of the biggest reasons a buyer loses out on a property. An offer with a pre-approval letter attached is much stronger than one without. This step can feel awkard, since you will be sharing private financial information with individuals you may not know well yet. The lender has everyone's best interests in mind--yours as well as the bank they represent. Your agent also needs this information to make sure they are negotiating appropriately based on your individual situation. The goal is to ensure you can afford the homes you are viewing, and that the bank can minimize their risk. As an agent, I'm anxious to make sure you look as good as possible to a seller, so it's difficult for them to say no to your offer.
Sometimes there are snags in this part of the process, but by establishing these relationships before you find the property, your agent and the lender can work with you to establish a plan of attack to remedy any items that may cause a problem down the road. This also helps avoid making an offer on a property, and sadly, having to walk away from the deal due to problems that crop up during the underwriting stage that could have been avoided.
A good agent can provide you with several trusted lenders they have worked with, and will also be part of the communications with your lender so that they are showing you the right houses that meet your goals and budget.
2. Getting Educated.
This means much more that simply knowing what homes in a particular neighborhood are going for, or choosing a school district boundary area to live in. If you are a first-time buyer, many steps in the process will be new and unfamiliar. Working with an agent that is familiar with the different options available to you, as well as someone that can read between the lines when determining what homes to look at is invaluable. This experience can save you time, money and headaches. The more you know, the less stressful the process will be.
I felt lucky to have someone like her to walk me through every detail and every step. Every question you may have, she is on the other side with a quick, non judgmental and honest answer.
3. Understanding the Costs
This is where your agent and lender will work together to provide you with estimates of what it will cost to purchase a property. Depending on your type of financing, loan package you use and other items such as HOA (homeowner's assocation fees), property taxes and other items that vary with each property, you'll have a clear idea of what you will be paying for the home you choose BEFORE you write the offer.
4. Putting Together An Offer That Will Close!
You've finally found the property you want to purchase! Together we'll review comparatives (homes that have recently sold in the area) to determine the price you will offer, as well as what contingencies will be part of the agreement we present. This may include specific types of inspections, deadlines and financing requirements. Each transaction is different.
Writing an offer includes more than just what you are willing to pay -- putting together a strong offer, one that is difficult for a seller to refuse -- can include many other pieces. Working as a team to put you in the strongest position possible so they will accept your offer over another.
5. Under contract, now what?
Once both the buyer(you) and the seller agree on contract terms, you are under contract. The next piece of the process begins moving forward: The paperwork is shared with my transaction coordinator who tracks deadlines, coordinates with parties involved and assists both me and you to ensure things move forward smoothly. We'll provide you with a timeline as well as information on what to expect as we move towards closing. As a team we will all work to make sure you, the buyer, are informed and empowered. Open communication is absolutely key during this phase.
6. Closing Day!
This picture says it all!
I look forward to working with Page again for my next real estate venture.
--Katie, Bozeman MT