As a real estate agent on the Central Coast, I love helping buyers find their ideal vacation home or permanent residence in the Lake Nacimiento communities of Oak Shores or Heritage Ranch. But, as a Certified Distressed Property Expert, I also work with a number of foreclosure listings throughout Monterey and San Louis Obispo counties.
Working with buyers and sellers through these foreclosures is very rewarding. I have the opportunity to help sellers get out from under very heavy financial circumstances, and I also get to watch new buyers get a taste of the American dream of owning a home.
Recently, however, an article surfaced that discussed the deficiency of first time home buyers in the housing market. Lawrence Yun, chief economist for the National Association of Realtors, estimates that there were 2.2 million fewer first-time buyers in the United States between 2008 and 2012 — a deficit of about 450,000 a year.
Recent surveys of Realtor members by Yun’s research team have found that first-time purchases slipped to just 30% during each of the last three months.
So, what are keeping first time home buyers from jumping in on the historically low mortgage rates and great home prices? Here are just a few of the top reasons.
- High Unemployment– The downturn of available jobs has hit the younger generation the most who are lacking the hands on experience. This has turned potential buyers into renters until they can find a more stable job.
- Student Loans– Those in their 20’s and 30’s are finding the weight of student loans to be a large financial burden. This affects potential buyers because the lenders’ guidelines for debt to income ration are strict.
- All Cash Buyers– Those that are buying a home with all cash are jumping on the chance to get great homes at low prices. Because of this, they’re eating up the inventory of the lower priced homes that first time buyers are hoping to buy. All cash buyers will always have the upper hand in the market.
If you’re a first time home buyer, you may be a little discouraged about the possibility of buying a home. But, there are things you can do to help the process run smoothly. Take a look at these ten tips!
1. Check Your Credit Score– Lenders will put a lot of weight on your credit score, so you want to make sure to have your credit in order. They will determine how much you qualify for in a mortgage based heavily on your credit.
2. Set Your Housing Budget– Have a clear understanding of your budget each month, and do not spend more than 30% of your gross monthly income on your Central California home. This includes your interest, principal, homeowners insurance and taxes. You don’t want to put yourself in a financial bind that you are constantly struggling to maintain each month.
3. Start Saving and Stop Spending– Begin to save the difference between your monthly rent now and what you plan on your monthly mortgage being. This will prepare you for what the monthly payments will look like once you move into your home and help you make any needed lifestyle adjustments now.
4. Meet with a Lender– It is easy to want to begin searching online for your Central California home, but without a sense of how much you qualify for; it’s easy to waste time looking at homes you might not be able to afford. Meet with a lender before you begin looking at homes and get pre-qualified. You’ll be able to search more effectively online and when you begin working with a Central California Real Estate agent to find a home.
5. Find a Reputable Central California Real Estate Agent– You’ll want to find a real estate agent who has experience in the local market. An agent who has years of experience in the area will be a great asset in helping you find a neighborhood and home that best fits your needs and lifestyle.
6. Narrow Your Priorities– You’ll want to make two separate lists based on your needs and wants. Your needs should be those things you absolutely need in your Central California home. Your wants will be those items that you would prefer, but are willing to compromise on. Narrowing down and sorting out your needs and wants will help immensely when searching for a home. You’ll have a clear picture on what you are willing to compromise on, since you will most likely not find a home that has absolutely everything you would like. Know when to give and when to stand firm. You’ll quickly narrow down your home search this way!
7. Choose a Neighborhood– Each neighborhood does have a unique atmosphere and things to offer, so you’ll want to find the neighborhood that suits you the best. I have years of experience in the Lake Nacimiento, Monterey County and SLO County, and will be able to assist you in finding your ideal neighborhood!
8. Make a Reasonable Offer– Your real estate agent will be able to give you a list of comparable homes in the area, and can help you determine an offer that is fair for the market. They will also make sure that you are being dealt with fairly as a first time home buyer.
9. Have a Home Inspection– This is very important! Even if the home looks perfect inside and out; there is no way of knowing what issues there may be without a home inspection. You don’t want to buy a home only to find that it needs the roof replaced or there is water damage. Having the home thoroughly inspected allows you to know exactly what you can expect in the home you buy.
10. Finalize the Details– Once the contract is signed; you’ll still want to stay in touch with your Central California Real Estate agent and lender. There are always last minute finalizations that need to be made.
If you have questions about taking the next step in buying your first home, please feel free to contact me today!
I look forward to hearing from you!
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Oak Shores Realty specializes in Oak Shores at Lake Nacimiento properties. Please contact us today to get more information on Lake Nacimiento lake homes. Oak Shores Realty can also provide you an insiders “Lake Nacimiento Buying Guide” with great information including maps and market information.
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