How to Buy Your First Home

Buying your first home is an exciting experience. At the same time, it is easy to become overwhelmed and confused by the whole experience. By having a better understanding of what to expect as you buy your first home, however, you will significantly increase your chances of enjoying a smooth buying process. To that end, here are a few things to expect when buying your first home.

Step #1: Start Saving

In order to increase your chances of qualifying for a loan with a good interest rate and to keep your monthly payments at a minimum, it is in your best interest to put a large down payment on your home. Ideally, you should have enough saved up to pay 10 percent of the cost of the home. At a minimum, you will need to have enough saved up to place a hold on the home in the form of earnest money.

Step #2: Plan Ahead

Before you even start your search for a new home, you need to be sure you are ready to take this huge step. First, take a closer look at your budget to make sure you are financially prepared to purchase and to maintain a home. Next, ask family and friends to recommend experts that can help you in the process, such as a home inspector and a lawyer. Third, consider your lifestyle and the type of home you will need to suit that lifestyle and, finally, research the prices on homes in the neighborhoods where you are considering buying.

Step #3: Determine How Much You Can Afford

The next step in buying your first home is to determine how much you can afford. When making this decision, you will first need to consider how much you will be able to receive from a mortgage lender. Your housing cost to income ratio is one factor that mortgage lenders consider when determining how much they will lend to you. Lenders do not want your basic housing costs, which include your mortgage, property taxes and insurance, to exceed more than 28 percent of your monthly gross income. Similarly, they do not want to see your total debt, which would include your housing costs as well as installment loans, credit card balances that are more than 10 months old and student loans, exceeding more than 36 percent of your monthly gross income.

Step #4: Get Prequalified for a Mortgage Loan

Once you have a clear idea of how much you can afford and are likely to qualify for in terms of a loan, it is a good idea to get prequalified for a loan. Not only will this help you know for sure how much you can borrow, but it will also give you a bargaining chip when it comes time to negotiate a price on the home of your dreams. In fact, many sellers are willing to negotiate a lower price with those who are pre-qualified because they can be relatively certain the deal will go through.  In Boston, it’s commonplace for buyers to submit a prequalification or preapproval letter along with their Offer to Purchase.

Step #5: Hire a Real Estate Agent

Now that you have a clear idea of how much you can afford and what you are looking for in a home, it is time to hire a real estate agent. By communicating all of this information to your agent, you should have no problem with finding the perfect home to fit your budget.

How Buying New Construction Can Save Money

If you’re considering purchasing a new home, you might be wondering if it makes more sense financially to buy a newly built home or an older existing home (resale). Well, you’re not alone.

Here are some of the unique advantages to buying new:

1. New mechanical systems will have extended warranties and save you thousands of dollars in unexpected bills over the years.

2. New appliances and other items like windows and doors are more intuitive and energy efficient saving you a ton in the long run.

3. Newer neighborhoods oftentimes include nicer and newer amenities such as pools, walking paths, playgrounds, and even sidewalks.

4. No clipped nails in the carpet, wallpaper to peel, or paint to touch up. You can easily customize a new home to your taste and style.

5. Options galore. Often existing homes don’t have the design features that often come standard in newer homes, like walk-in closets, a pantry, and larger master bathrooms. You’ll also want to think about things like electrical outlets – 30 years ago, most kitchens had one. Now, the average kitchen has four. What electrical needs will you have for a media room? Will you have to have electrical work done in an older house?

6. Better house designs. According to a recent issue of Better Homes and Gardens, many new home buyers are looking for homes that are “kitchencentric;” that is, the kitchens allow room for more than one person at a time, and open enough that those in the home can be engaged in different activities, but still connected to the family. Think about the old downstairs recreational room of the past where the TV was and kids hung out. Families want to be together – and if you buy a house without flow, it might be hard for you to get rid of when you’re ready to sell.

How To Buy Your First Condo

Buying your first home can cause a number of emotions from being scared to being overjoyed. It’s a difficult process and there are many steps involved from choosing a real estate agent to securing financing. Here are a few tips to make buying your first home a more enjoyable experience:

Hire A Real Estate Agent

Your first step to buying your a home should be to hire a real estate agent. A real estate agent can help guide you through the process with their expertise. They have valuable market data and should know the area where you want to purchase.

Make sure you choose a buyer’s agent as a buyer’s agent will be working for you and not the seller. If you work with the sellers agent, keep in mind they have a fiduciary duty to get the best deal for their seller which could leave you on the short end of the stick.

When working with a buyer’s agent there are no upfront costs which should give you no reason not to work with an agent. Commissions are paid by the seller and will already be added to the listing price of the home. Some people might tell you that as a buyer you don’t pay commission but that’s not true as it’s already added to the price of the home.

If you have troubles finding an agent you can trust, talk to family and friends about agents they’ve used in the past. Interview each agent until you find one you feel comfortable with. One thing you should know is not all agents are the same. Be sure to ask a lot of questions about the market and how well they communicate as communication is key in a real estate transaction.

Get Pre-Qualified For A Loan

You can’t buy a home unless you get financing so don’t get too excited until you know you have the means to purchase. Many first time home buyers will go looking at homes before they talk to a mortgage professional and find out they don’t qualify to buy. Finding the perfect home and later finding out you can’t buy it can be devastating.

The best way to know what you can buy is to get pre-qualified. The prequalification process is pretty simple, and shouldn’t take longer than a couple hours. Ask your real estate agent if they know some good lenders and shop around. Be careful however, just because a lender is cheap doesn’t mean they can close a loan on time.

The lending process has changed dramatically over the last couple years making it more difficult to get a transaction closed. Don’t take choosing a lender lightly, it can mean closing a deal or not. A good lender should have great communication skills and knowledge of the current lending laws. Also, a lender with in house underwriting is a huge plus.

Finding A Home

Finding a home should be the best part of the home buying process. Shopping for a home can be fun, and you shouldn’t have to settle for something you don’t like. You have a lot of options when searching and I would recommend you try them all out.

Start your search online. There are a ton of real estate websites out there so you shouldn’t have a problem with this option. However, finding a home online is just the first step as online pictures can be deceiving. Some pictures will show the home better than it really is and other photos will look horrible, yet the home might be fantastic. You never know until you see it in person.

Check out some open houses. Open houses are a great way to start your home search especially if you don’t have an agent yet. If you like an agent sitting at an open house don’t hesitate to ask them to show you some more homes. Real estate agents can show you all homes listed on the Multiple Listing Service (MLS).

Avoid Common Home Buying Mistakes

If you’re thinking about purchasing a home I would recommend you ask your friends and family for a referral of a trusted Realtor. There are many possible pitfalls when purchasing a home that a Realtor can help you avoid. Here are a few common home buying mistakes buyers without representation make:

Giving Up To Much Information

When you’re working without a Realtor in a real estate transaction, you won’t have anyone to buffer the conversation. Talking directly with the seller will leave you at a disadvantage when negotiating terms and price. If you let them know how much you love their house, they can use that to get more money out of you.

If the sellers are working with a Realtor, their agent will use that as an advantage in negotiations. One thing you have to keep in mind when dealing with a represented seller is, their Realtor has been highly trained and educated in every facet of the real estate process. They do it everyday, and they will win.

When you’re buying a home listed on the MLS, the commission is already negotiated into the asking price. You’re already paying a Realtor fee so there is no reason you shouldn’t hire an agent of your own. So if the reason you don’t want to work with an agent is commission, don’t be fooled, you’re already paying it.

Relying On Oral Agreements

As a Realtor I have access to well over 50 different contracts within the MLS I work for. These contracts have been written by professional real estate attorneys over many years. There is a reason why Realtors have access to so many contracts, oral agreements almost never hold in a court of law.

Just because you think the seller is trustworthy, if it’s not in writing, they don’t have to comply. If the seller said they will throw in the riding lawnmower, get it in writing. Nothing is final until the ink dries on a legally binding contract.

Missed Deadlines

A real estate purchase contract has many deadlines that need to be kept. If you miss a deadline you could not only lose your earnest money, but you could be left with thousands of dollars in repairs. Some deadlines you need to keep in mind are your inspection, appraisal, and financing dates.

If you miss your inspection deadline, and later find out there are major maintenance issues, you won’t have the leverage needed to negotiate the repairs. If the home doesn’t appraise and you’re outside of your deadline, you could lose your earnest money if the deal doesn’t happen. If you can’t obtain financing in time, you could lose the property all together.

Missed deadlines can be avoided by knowing the right people to get things done on time. Realtors have access to these people everyday, and most have a trusted network of professionals they know will get the job done.

When buying a home I fully recommend you enlist a trusted real estate professional to help you along the way. You would be amazed at the amount of work Realtors do behind the scenes to ensure a smooth and timely closing. If you still don’t want to enlist the services of a real estate professional, make sure you keep an eye on every aspect of the real estate transaction, or you could end up losing out on your dream home.

Are You Ready to Own a Home?

Have you been considering purchasing a home? If so, you are not alone. After all, according to many experts, there is no better time to purchase a home than now. With interest rates lower than they have been in 50 years and with home prices hitting rock bottom, you stand to save a significant amount of money if you make a purchase now. Still, there are many things to consider when trying to decide if now is the right time for you to own a home. Here’s a look at five questions you should ask yourself as you try to make this decision.

#1: Are You Financially Ready for Home Ownership?

Perhaps the most important question you can ask yourself is whether or not you are financially prepared to own a home. Remember, home ownership involves more than making your mortgage loan payment each month. You will also need to pay taxes, insurance and utilities as well as the cost of any repairs that may be necessary.

#2: Are You Prepared to Maintain Your Home?

In addition to paying for the maintenance and repairs that your home might need, you will also need to dedicate time to home maintenance. If you call a professional to make repairs, you might need to take time off from work in order to be there when that professional arrives. Similarly, you will need to dedicate either the time or money necessary to hire someone to perform mowing, shoveling snow and other routine yard work that comes with home ownership.

#3: How Long Do You Plan to Live in the Area?

Before you purchase a home, you should give some thought to your long-term housing plans. If you intend to move within the next few years, purchasing a home now may not be a wise decision because you will not have time to build up equity in the home. If you don’t have any plans to move for at least five years, however, purchasing a home now shouldn’t cause any issues.

#4: What are Your Immediate Plans for the Future?

In addition to considering where you plan to live in the next five years, you should consider other plans for your future as well. If you plan to have a family, for example, purchasing a home may be a great idea. At the same time, you will want to purchase a home that is large enough to accommodate a family. If you plan to do a lot of traveling or to spend a lot of time climbing the corporate ladder over the next several years, on the other hand, the time and commitment involved with home ownership may be problematic for you.

#5: Is Your Credit Rating Healthy?

Finally, you should ask yourself if your credit rating is healthy. Even if you do manage to obtain a loan with a poor credit rating, the amount you pay toward interest can be quite significant. Therefore, even if you do feel you are ready to purchase a home, it might be better to wait for six months or longer in order to give your credit rating time to improve so you can qualify for a lower interest rate.

First Time Boston Homebuyer Tips

Are you considering purchasing a Boston area home for the first time? If so, you are probably both excited and nervous about your decision. After all, purchasing a home is a major transaction and you are getting ready to embark upon a major change in your life. To ensure the process goes as smoothly as possible and to make certain you are making a sound financial decision, it is important to keep a few tips in mind when purchasing your first home.

Tip #1: Know What to Expect

Before you contact a Boston real estate agent, it is a good idea to get a clearer picture of how much home you should expect to get at what price, and how the buying process works. While your real estate agent will certainly help guide you through this process, the better prepared you are beforehand, the easier it will be for you to work with your agent. To get a general idea of what you can expect to pay for a home in your area, visit Websites such as and

Tip #2: Determine What You Can Afford

It is also in your best interest to have a good idea of what you can afford to pay for a home. In this way, you can give your agent an idea of the price range of homes to look at. To help get a better idea of how much you can afford to spend on a home, you might want to use one of the many mortgage calculators that are available on the Internet. Also, keep in mind that Fannie Mae recommends spending no more than 28% of your gross income on your housing costs. You can follow this up by speaking with a mortgage broker, a resource that can provide significantly more detailed information about the lower and upper bands of home prices you should be considering.

South End Condos Boston

Tip #3: Decide What You Are Looking for in a Home

By assessing your current and future needs, you will be better able to determine the type of house and features you are looking for. The better you communicate these needs to your real estate agent, the better he or she will be able to narrow down your options to those that are the most likely to suit your needs.

Tip #4: Don’t Be Afraid to Negotiate

One of the benefits of working with a real estate agent is that he or she should have great negotiating skills. Don’t be afraid to speak up about what you want from the transaction, including extras such as having the furniture included in the price or having the seller pick up the cost of certain inspections and repairs. The more you communicate your desires to your Boston agent, the better prepared he or she will be to negotiate a great deal on your behalf. Bear in mind that almost everything is negotiable in real estate, including inspection items that come up during the standard inspection process.

About the Author: Brian Kinkade is a broker and team lead with Brokers Guild – Cherry Creek Ltd, one of Denver’s fastest growing full service Denver real estate firm. Brian’s team of Internet savvy agents service the Denver Metro area while specializing in Denver luxury homes, Colorado horse property and International sales. They invite you to visit their advanced real estate website today to search for homes, gather local information, and learn about Denver neighborhoods. Brian and his team are standing by and ready to assist with your home purchase, property sale or relocation needs.

10 Reasons to Buy with a Realtor's Help

When it comes to buying a home, some buyers might be tempted to cut out the middleman and attempt to do all of the work on their own. While this is certainly one possible option, there are actually many reasons why a buyer should seek out the assistance of a Realtor when purchasing a home. So, why use a Realtor? Here is a look at the top 10 reasons to buy a home with the help of a Realtor.

Reason #1: Taking Advantage of Expertise

The simple truth is that Realtors are experts at what they do and buying a home can be more overwhelming and complex than many think. By working with a buyer’s agent when purchasing a home, homebuyers can take advantage of the expertise they bring with them. As a result, they are more likely to find the home they are looking for at a price they can afford in a much timelier manner.

Reason #2: Tapping into Connections

Since Realtors have experience working in the industry, they have already formed a number of connections that can help homebuyers save money and time. From mortgage loan officers to home improvement contractors, Realtors know who to work with and who to stay away from within the industry.

Reason #3: Determining Your Buying Power

Realtors know how to sit down with their clients in order to help them determine just how much they can truly afford to spend on a home. By helping the homebuyer narrow down options, the Realtor can help save time and money while preventing unnecessary headaches.

Reason #4: Saving Time

Because they are already familiar with the properties that are available on the market, Realtors can help homebuyers save a significant amount of time when it comes to finding the houses that suit their needs as well as their budgets.

Reason #5: Locating Rare Gems

Sometimes, homes that are on the market are not actively advertised. As such, buyers who choose to go it alone are likely to miss out on these rare gems. Those who work with a Realtor, on the other hand, are far more likely to learn about homes that may require a bit more investigation to find.

Reason #6: Comfort through Expectations

While you have been through the buying process at most probably 3-4 times, a Realtor does this for a living, and has been through countless transactions.  A Realtor knows the timeline and major transaction markers for home purchases in your market and can set expectations with you early on as to what to expect during the transaction process, putting your mind at ease.

Reason #7: Offering an Objective Eye

When searching for available homes, it is easy for a buyer to get caught up in the things he or she loves about a home without seeing the big picture. Since Realtors have access to a variety of different informational resources, however, they can provide objective input into the buying process that will help the buyer make a smarter decision.

Reason #8: Enjoying Increased Negotiation Power

When purchasing a home, there are many aspects that can be negotiated. This includes the price, the date of possession, the financing terms and more. With the experience of a Realtor at his or her side, the buyer will have the best chance of negotiating a favorable deal.

Reason #9: Choosing the Right Financing

Due to the experience and connections the Realtor has to offer, he or she can also help the homebuyer sort through the various financing options while also helping the buyer find the best lenders to suit their needs.

Reason #10: Knowing Someone Has Your Back

Perhaps the most important reason a homebuyer should work with a Realtor is simply because he or she can take comfort in knowing that someone has his or her back. Realtors provide due diligence during the evaluation of the property and can assist with having it inspected for asbestos, dry rot, faulty structure, termites and more. In addition, the Realtor can provide information regarding access rights and other concerns that might need to be addressed before a deal is made.

Why Use a REALTOR®?

Potential or Location in Greater Boston?

The Boston real estate market is one of the oldest markets in the nation and with a wide variety of housing available and neighborhoods that range from multimillion dollar estates to economical fixer uppers, many Boston-based homebuyers need to stop and ask themselves this one essential question: In a buyer’s market, is the potential of a property more valuable than its location?

In Potential, Potential, Potential Rona Fischman examines this very issue. As many neighborhoods are up and coming in the greater Boston area, are buyers better off paying more for an established location and perhaps sacrificing home size, or is your dream home in a less than desirable location worth the risk?

Location, Price Point, and Sacrifices

In each instance many variables apply and as Fischman points out, you can generally tell what to expect from a property by examining what the developers have left behind. Case in point, the examples Fischman gives of a modest ranch home in Newton and a fixer upper in Somerville.

The modest ranch in Newton, an affluent Boston suburb, is surrounded by homes that have been developed and turned into multi-million dollar investments. Why was this house the one stone unturned? Digging deeper, the lot on which this house is situated was not quite big enough and would not permit a two family townhome (as the developer would want to build), in fact the lot permitted the modest type of home it already housed, revealing that the maximum possibilities, (and earning potential) for this home have already been reached – this also serves as a reminder to perform ample due diligence during the purchase process.

Potential, Maximize Your Dollar, Forfeit Curb Appeal?

In her second example Fischman discusses a home in Somerville, a suburb of Boston that is evolving into a desired area, for among other reasons, expected updates to public transportation. Many homes in this area are old, run down and need extensive work. Because of the foreseeable convenience of public transportation, new schools are being built and people are beginning to move into the area. Though the location is not yet comparable to Newton, Wellesley or any other established area, the potential is building, and is far from reaching its limit.

Ask Your Realtor

There are many questions buyers must ask themselves before buying their first home. Know yourself, know your bottom line, and most importantly, know a good realtor. For some, the risk of buying a home in a growing neighborhood is not worth the safety of living in an established locale. For others, a beautiful home in a slightly less affluent area is more desirable. A good realtor familiar with your market can help you and your family find the right balance and maximize your investment.

Best Places to Live 2010: Massachusetts Real Estate

The most recent cover of Boston Magazine offers readers a look into 23 of the most sought after communities and trendiest neighborhoods in Massachusetts – in short, the best places to live in Massachusetts. Through comparing the median home or condominium prices and spikes in sales since the market peak, Boston Magazine provides profiles of numerous cities and towns from various regions across the state. These 23 communities are then divvied up into the following three categories:

  1. Gold Standards, for the tried and true real estate hot spots in Massachusetts
  2. Bangs for your buck and worthwhile investments are considered to be Best Values
  3. Opportunity Knocks sheds light on the communities that have major selling points but have yet to reach their full potential on the popularity scale, largely for first time home buyers looking to settle in an up-and-coming spot

By showcasing towns based on these criteria, Boston Magazine has put together a veritable guide to Massachusetts for those taking the first steps in buying a house and those selling homes in Boston and beyond.

Real estate riches in Massachusetts: Winchester, Westwood, Brookline, Hingham, Manchester-by-the-Sea and Concord.

The cities and towns dubbed Golden Standards by Boston Magazine have been so for years for their excellent school systems, staggering property values and countless perks in the form of restaurants, theaters and historic landmarks. Buying a home for the first time in these towns can be pricey, but deals can be found amongst the property listings even if home sales statistics have dropped considerably in these areas over the past few years.

Best Values for First Time Home Buyers in Massachusetts: Jamaica Plain, Norwell, Essex, Natick, Burlington and Foxboro.

With the tax credit for home purchases inspiring house hunters to seriously consider putting a payment down, communities boasting numerous perks with low living costs are a natural fit for first time home buyers. Jamaica Plain was the city pick as one of the most desirable places to live in Massachusetts for its vibrant artistic community, sprawling green spaces and neighboring proximity to Boston proper. For those selling homes and looking to move to the suburbs, Burlington, Foxboro and Natick all made the cut as fantastic values for their affordable prices, notable local attractions and easy accessibility to major highways and public transit.

Selling Homes in Massachusetts’ Up-and-coming Communities: Watertown, Pembroke, Melrose, Hamilton-Wenham, Sharon and more.

Steep tax rates, administrative tiffs and mediocre locations have these towns listed as up-and-coming communities for their potential and their trade-offs: Owners are selling homes at reasonable prices, great school systems and lively restaurant and seasonal scenes are the big attractions when it comes to those towns in the Opportunity Knocks category. First time home buyers shouldn’t shy away from towns like Watertown (entry only Watertown MLSl listings), Pembroke and Sharon without carefully examining the pros and cons, as the benefits of living in one of these communities on the cusp of trendy could far outweigh the pitfalls depending on what you’re looking for.

Homeowner’s Insurance Basics

In most instances, mortgage lenders require that home buyers obtain homeowners insurance as a loan condition. Be sure to research the best premiums for insurance on your own as you will save money. If the lender imposes insurance, it will undoubtedly cost much more, so do your homework.

If you live in a community governed by a Homeowners Association (HOA), be certain that your lender has a copy of the HOA insurance policy covering the home exterior. Reminder: you will still need your own insurance to cover the interior and contents of the unit.

It is important to determine that you have sufficient insurance to cover any and all losses before a problem occurs. You should also be sure to ask if you need special coverage for items like jewelry, art, antiques, computers and the like.

While your home should be insured, the land it stands on is typically not since the majority of home disasters will not affect the land. Be sure to subtract the value of the land when working with your insurance agent to calculate premiums or you will be paying premiums that are too high and not necessary.

“Replacement” coverage will provide sufficient insurance to rebuild your home and replace all its contents. If you opt for “Actual Cash Value” coverage, even though your premiums will be less costly, you will receive only enough to cover what the property is worth at the time of the disaster which equals depreciation for wear and tear plus your cost of the property.

You may be eligible for discounts if you are either a long term customer of the company or are a senior over age 55. Some safety features in the home may also qualify your policy for lower premiums such as smoke detectors, security doors and alarm systems, dead bolt locks, etc.