May 27, 2000
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Tips for First-Time Home Buyers
A checklist to sort out the confusion in purchasing a home.

Ellen Bossert, a specialist in buying and selling homes and the executive vice president of Domania.com, has expert advice for first-timers looking to purchase a home. Read an excerpt below:

This checklist can help guide you to a valuable home purchase with as little headache as possible.

Buying a home is one of the single most important financial decisions that you'll ever make. Unlike assets accumulated for a discretionary or future need, your investment in your home - financially and emotionally - is ongoing and often continues for a lifetime. The steps you take to educate yourself about home buying generally, to understand the process specifically and to arm yourself with real estate information can mean the difference between a happy sale and a harried one.

THINK ABOUT YOUR NEEDS

Simply put, buying a home is probably the biggest decision you'll ever make during your lifetime. It will be exciting and fraught with emotional highs and lows, and yes, anxiety. Preparation now, such as developing a wish-list and action plan, can ultimately help demystify the process and reduce your anxiety.

Do: Examine and determine your specific needs as a first-time buyer. How much room do you need? Are you concerned about quality schools? Commuting time? Proximity to family and friends? Is this a "starter" home or are you likely to be here in five or 10 years? Are you buying at the height of or bottom of a market? What financial resources do you have, or must you obtain, to make your home purchase a reality?

Don't: Make assumptions about the role of each professional in the real estate process. Many allies and advocates populate the process. Clarify, if you can, each professional's role beforehand and make sure to ask questions. Buyer-agents and other professionals can advocate for you in the process, but they come at a cost.

UNDERSTAND THE PROCESS

Do: Research and read. Absorb everything that you can about home-buying, with a particular emphasis on information targeted to the first-time homebuyer. Spring is a traditional season of home buying. During this time, personal finance magazines such as Kiplinger's Personal Finance, Money and Smart Money publish home-buying guides. These can be useful in starting your thinking and self-education. You might also investigate a number of resourceful books written about the process. Some titles to consider include "100 Questions Every First-Time Home Buyer Should Ask," by Ilyce R. Glink; "Yes! You Can Own the Home You Want-The First-Time Buyer's Guide to Affordable Homeownership," by Gary Eldred; and "Home Buying for Dummies," by Eric Tyson and Ray Brown.

Don't: Learn about the process as you're living it.

TALK TO PEOPLE IN 'YOUR' NEIGHBORHOOD

Do: Make a day of it in the neighborhood of your dreams. Walk the streets. Meet the people. Find out what services are in your immediate reach. Take notes.

Don't: Assume that your dream neighborhood is the same at night as it is during the day. If you live in an urban neighborhood, a quiet business-focused street can take on a completely different personality at night. Or, you may learn that your prospective next-door neighbor likes to listen to head-banging music from the time he comes home until the time he goes to sleep at 1 a.m.

EMPOWER YOURSELF WITH INFORMATION

Do: Get your hands on valuable real estate information that often is part of public record in the United States. You can get these by researching physical public records or more easily, and increasingly, by searching for them online. Aside from domania.com, there are a handful of real estate sites that offer you free access to home sales comparables ("comps"), i.e., the actual selling prices of homes, as well as other valuable real estate data.

Don't: Pay too much for a home because you didn't investigate the market. And don't forget line items like condo fees, or water or sanitation that might not have been relevant in your previous living situation.

RESEARCH THE FINANCIAL ASPECTS

If the emotional elements of the buying process aren't enough to challenge you, the financial preparedness elements will. Rest assured, there are a number of things that you can do to make sure the process goes as smoothly as possible.

Do: Determine how much home you can, and want to, afford. Use mortgage calculators, which are plentiful online, and get yourself prequalified. How much you can afford will guide what you shop for.

Don't: Avoid serious discussion about family finances or concerns about debt management. Discuss them now to avoid regrets later.

CONCLUSION

Buying a home for the first time, or any time, is a major financial and emotional investment. You can minimize chaos if you think about the process before pursuing it. You'll also benefit by taking responsibility for yourself as the driver of the process. Taking the time to decide what you want and need, to map out an action plan, to get information and to learn and understand the home buying process, and the roles of individuals therein, will serve you well.

This will guide you to finding the right home, making the right offer and closing successfully. By taking the lead, you are in a better position to work with others in the process and to find a home that meets your personal and financial needs.