Expert: Jessica Bryan - 8/25/2005

Question
My husband and I are getting ready to buy our first home. Neither of us has any exeprience with this sort of thing, so we're clueless about what we need to do and when.

We currently rent an apartment and our lease expires Feb. '06. Basically we're 6 months out. We have our down payment saved and are now just trying to build on top of that for other expenses (appliances, etc). We live in the Fort Worth, Texas area. But what do we do next?

Should we talk to the bank first and find out how much we'd be approved for, then shop around? Do we find a house first? We've been loking online, just to get an idea of what's out there, and we've stuck to the $90k-$110k range, nothing brand new but within 20-30 years old mostly.

Once we find "the house", how long (on average) does it take to actually get to the point of move-in? What if we find a great place but can't move for another 2 months because of our lease?

Any and all thoughts and advice you can give are greatly appreciated!

Answer
Dear Brandi;
As it turned out I ended up being with these clients all day and then writing an offer this morning so this was the first chance I had to answer your question.  Sorry for the delay.

Okay: so first of all...congratulations on your decision to buy a home.  It will be the best thing you did for yourselves financially.  Rent is simply a waste of money!

The first thing you should do is to figure out what you can afford based upon the various loan programs out there.  If you are in upwardly mobile jobs with opportunity to increase your income every year then an adjustable rate mortgage is probably the best solution for you.  Many people buying their first home will only live in it for a few years before buying a larger home.  It makes sense to get a loan that stays at a low rate for 5 to 7 years and then adjusts to a much higher rate later.  By the time it adjusts, you will be out of that home and will have paid off the mortgage and can get a new home and mortgage.  There are many options open to you so a long talk with a good lender will help you with all of this.

The next thing to do is to meet with a real estate agent who is experienced with first time buyers and will help walk you through the process.  Their services are invaluable and will help to educate you as well as look out for your best interests.  Finding the home that you like will not take too long so if you begin looking now, you will probably find something within a few weeks.  (Unless your market is such that there are very few homes available right now).  The next few months are historically the months with fewer listings since the holidays are approaching and people don't want to have their home for sale during Thanksgiving and Christmas.  Talk to an agent though who will know the specifics of your area.  Once you find a home, you can usually get a loan and have all of the inspections done within 45 days.  So...based on a Feb 6 move-in date, you would be looking at homes right in the middle of the holiday season--NOT GOOD!!!  There will be less available to see.  However, on the plus side, any home that is for sale at that time means that the Sellers must sell and are more motivated than a home on the market during the Spring or Summer.  You might be able to negotiate a better price based on the fact that these sellers may be desperate!  I strongly advise that you use a Buyer's agent to assist you in your first purchase.  This agent will discuss fees with you. Depending upon local practices the fees are most likely paid by the Seller and you have little or no cost.  This will be disclosed to you at your first meeting with the agent.  The next thing is to sit and talk to the agent and feel VERY comfortable with him or her.  If you don't feel like this is someone you want to work with then walk out and find someone else.  Don't sign anything and don't agree to anything in writing until you are sure that this is the person you want as your agent.  It is best if you can ask around for a referral of an agent from friends, co-workers or family.  If you need help with this I can also help to supply you with referrals.  (We agents have a large referral network).  One last thought: you might want to check your lease and see if you can extend it on a month to month basis in case there isn't anything out there when you start looking.  Most homes start hitting the listing market mid to late March for the Spring market and this is when you will be able to have better assortment and choice.  I hope that this answer helps you.

Good luck and best wishes,
Jessica Bryan
Managing Broker
House to Home Realty Services