We Are First-Time Buyer Experts!

Most of our buyer-clients are first-time buyers, so we're very familiar with your questions and concerns.  What sets you, as a first time buyer, apart from other buyers?   Your home buying process may take longer than other buyers simply because you need time to process all the new information you are receiving.  You will need an agent who is sensitive to that and who can communicate the answers to all your questions.  Have you asked yourself any of these questions:

• What kind of credit score will I need to purchase a home?
• Do I have to have a down-payment?
• What are closing costs and can the seller pay them?
• How do I know I'm getting a good deal on my new home?
• Who can I trust to represent my interests?

We would love to spend time getting to know you and helping in your home purchase.  Please give us a call.

If Possible, Plan Ahead...

1. Establish good credit.  Perhaps the fastest way to a good credit score is to obtain a credit card and use is wisely.  Use the card to charge gas or other items you would normally buy with cash, THEN pay off the card each month.  If you are making monthly payments on cell phone, utility bills, etc. make sure your name is on the account and continue to make payments on time.  Mortgage companies will want to know if you've had a "30-day-late" on any payment in the past 12 months.  Go to www.annualcreditreport.com for a free, yearly credit report.  Dispute any inaccuracies.
2. Save money.  Many areas of Arkansas qualify for USDA loans which allow the borrower to finance 100% of purchase price, not requiring a down payment.  If you buy a home with the 100% USDA loan you will still need an application fee and appraisal fee, usually under $400.  If you make too much money to qualify for a USDA loan, you will have to come up with a down payment.  For an FHA loan you will need 3.5% of the home price.  For a conventional loan you will need even more.  Most 1st time buyers in our area ask the seller to pay the "closing cost" associated with buying a home.
3. Get Pre-qualified with a local (not internet) mortgage company.  The mortgage company will tell you how much home you can afford.  In our area, many people find that their new mortgage payment is lower than what they were paying in rent. Call us to find out more.

10 Common Mistakes of First time buyers...

• Working with a real estate professional who does not possess adequate knowledge of the area and relative property values.
• Working with a real estate professional who is unable to identify customer needs, recognize when those needs change, and identify a sensible process for reaching decisions.
• Purchasing without considering issues of resale.
• Purchasing the largest, most expensive or over-improved home for the neighborhood.
• Purchasing emotionally for such things as personalized decor or status, ignoring the consequences of buying an overpriced property.
• Purchasing new construction in an area that is less than 80 percent developed.
• Purchasing in an area inconvenient to employment centers.
• Purchasing a home that does not have adequate features for the price range or has an unpopular floor plan.
• Purchasing with the intent of remodeling, extensively redecorating or reconditioning a poorly maintained property.
• Purchasing in an area that is experiencing declining value.

What Will Drive Home Values in the Future?

• Terms affect price - The more liberal the terms, the higher the price the seller will obtain. The more restrictive the terms, the lower the price.
• Location, location, location - Convenience to employment centers, schools, transportation, as well as lifestyle opportunities, drive buyer demand.
• Buyers typically pay more for new construction - At the time of resale newer occupied homes may have to compete directly with new construction by discounting price.
• The cost of capital improvements may not be fully recovered - Although future buyers may find improvements appealing, they seldom pay what they actually cost.
• Deferred maintenance negatively impacts value - Buyers expect a property to be well maintained. The typical buyer will discount the value more than the actual cost of repairs.
• Buyers seldom pay for the seller's decorating - The seller's decorating choices should be viewed as a cost of personal enjoyment. Neutral decorating appeals to most buyers and will typically shorten market time for the seller.
• Buyers expect specific features and amenities within each price range - Buyers quickly discount the price if room spaces, quality and features are lacking for the price range.
• Incurable defects have a dramatic impact on value - Buyers resist busy streets, unpopular floor plans, and properties that are inconsistent with the character of the neighborhood. Sellers of these properties should allow for longer market time or price below market to sell within an average market time.
• Asking price drives value - Knowledgeable buyers respond quickly to inspect a new listing. An overpriced property suggests that the seller is unrealistic, which makes buyers reluctant to negotiate. Over time, when the price is reduced, buyers lose interest or are concerned that no one else desires the property. This puts the seller at a disadvantage and can cause a below market sale price.

What to ask your real estate professional when buying a home

Location -

• Is this house in a neighborhood which has good resale activity when compared to the resale activity of the overall market?
• How strongly will competition from nearby builders affect the value of the home in the next three to five years?
• Did the neighborhood have sales during the past 12 months that support the value of the home?

Condition -

• How does the overall condition of the home compare to others that are for sale...and those that hove sold?
• Who can give estimates on the necessary and optional capital improvements and how will improvements affect the value?
• Who can give estimates for curing the property's deferred maintenance? What are the priority areas and how will the repairs affect the value?
• When considering redecorating choices, which will appeal to the typical buyer?

Features -

• Are the style, size, and floor plan appealing to the typical buyer in this market?
• Are the numbers, function, and location of the baths adequate for the price range?
• Are the kitchen appliances and spaces typical for the price range?
• Is the quality of trim and cabinetry typical for the price range?
• Does the property include the amenities expected by the typical buyer, for example, garage space, fireplace, outdoor area, heating and cooling options?

About Your Credit Score...

• Past late payments.. Delinquencies in paying your bills will count against you. Studies have shown that those who make late payments in the past will do so in the future. The more recent your late payments are, the more they hurt your score. A 30-day late payment within the last year will hurt your chances of getting a mortgage with favorable terms.
• Length of credit.How long your credit history is will affect your credit score. The longer you have had good credit, the better. It establishes a pattern of good financial management that lenders are looking for.
• Credit limits, current amount on credit and available credit.. If you max out your credit cards and are close to the limits on most of your loans, you will be viewed as risky. It is best to have moderate levels of credit with low balances or no balances on them.
• Mixture of credit types.. Lenders want to see that you can handle debt. Someone with a combination of revolving and installment debt is less risky than someone with only one credit card and nothing else.

Know your credit report

Why should you bother checking your credit report if the lender is going to check it too? Four out of five credit reports contain errors. There's a pretty good chance that your credit report has a mistake that is negatively affecting your credit and credit scores. You will want to fix these errors before applying for a mortgage.

You can obtain copies of your credit report and score from each of the three credit reporting agencies, Equifax, Experian and Trans Union. Each report will have small differences and different credit score scales. Look over the reports for any errors. If you find a mistake, don't waste any time getting them fixed. If you see late payments and credit balances that are correct, go ahead and prepare an explanation for them. The lender will ask you to explain them. Go through the account numbers to make sure that they are correct. If there are any outstanding bills that you didn't know about, go ahead and get them resolved. This sometimes happens when you move and the last bill for a utility isn't forwarded to your new address.

To keep your credit report in the upper numbers you simply need to pay all of your bills on time, every time. Take the time to learn more about your credit score and how you can improve it. A higher score saves you money by getting you lower interest rates and insurance premiums.