Find Your Dream Home

Buying your first home and transitioning from renter to homeowner is a big deal. You will no longer have a landlord to turn to when maintenance issues arise. That means you’ll have to be accountable when problems come up. So what do you need to be best prepared when that first unexpected issue arises? Here are 10 toolbox essentials every new homeowner should have in their basic toolbox. With a home tool set like this one, you should be able to deal with much of what comes your way on your new property.

1. Ladder — You don’t necessarily need to spend $400-500 on a ladder. For most basic uses, an affordable, aluminum extension ladder will do. You can use this ladder to clean gutters, hang things in high places, and paint tall walls and ceilings. A ladder of some kind is a must-have for homeowners to perform maintenance and repairs on their property. Just be careful and always have someone with you when you use a ladder.
2. Cordless Drill — You can buy an electric drill, but the cordless variety is definitely easier to use because of its mobility, as long as you’ve remembered to keep the battery charged. On that note, it’s probably a good idea to have an extra battery so you can have one in the drill and one in the charger at all times. You can use a cordless drill for many do-it-yourself (DIY) projects. Most good models cost anywhere from $100 to $300.
3. Hammer — You probably won’t need a fancy hammer in your toolbox, but you should definitely have a basic one. No toolbox is complete without a hammer. Luckily, you can pick up a hammer for $5 or $10 at most hardware stores. A hammer is essential for basic decorating tasks, like hanging your favorite pictures on the wall when you move in.
4. Pliers — Not all pliers are created equally, and they don’t all do the same job. Having a three- or five-piece plier set is a good way to cover your bases. You can use pliers to grip, cut, pull, and more as you work on projects around your new home. A five-piece set generally includes a pair of slip joint pliers, an adjustable wrench, long-nose or needle-nose pliers, diagonal pliers, and groove joint pliers. A five-piece set will only set you back $10 to $15.
5. Screwdrivers — Like pliers, there are different types of screwdrivers and it’s best to have a couple of different types and sizes in your toolbox. Luckily, screwdrivers are very inexpensive so it shouldn’t be a huge financial issue to acquire them. At a minimum, you’ll need medium-sized flathead and Phillips head screwdrivers. Some screwdrivers come with interchangeable heads, but beware that these may not work for all jobs.
6. Tape Measure — When you get ready to buy your tape measure, make sure you get one that is 25 feet long as there are times when a 12-foot or 16-foot tape measure just won’t do the job as easily or with as much accuracy. You can use tape measures for many different home tasks, and you can usually pick one up for about $5.
7. Levels — Levels can be tricky because some are quite fancy and expensive. In general, the first-time home buyer will be ok with a more standard type of level, although it’s still best to get at least two sizes, one small and one large. Basic levels generally cost about $10 each. If you want to save a little bit of money, you can actually use your smartphone as a level too using a free app.
8. Stud Finders — Most first-time home buyers joyfully anticipate the ability to decorate their new homes. They cherish the opportunity to hang objects on their new walls without worrying about sacrificing their deposit. They also tend to appreciate the preservation of these new walls. If you want to hang objects without doing damage, it really is best to make sure you locate the stud behind the wall or use anchors. This is where a stud finder comes in handy. You can get a basic magnetic stud finder for about $5 or you can splurge on a digital version that can cost as much as $80.
9. Screws, Nails, and Picture Hangers — As you work on various projects, you’ll likely acquire some nails, screws, picture hangers, and more. If you need a few just to get your collection started, you can pick up a variety pack of these items at a hardware store for $10 or less.
10. A Go-To Handyman Resource — If you aren’t very confident in your DIY abilities or you don’t have the means to purchase some of the items on this list right away, you might want to consider finding a reliable handyman. Ask your friends, colleagues, and new neighbors for recommendations and you might consider giving him a small job or two to be sure you are well matched. Then you won’t have to scramble when you’re in a bind to fix something fast.

If you have questions about any of these tools or are new to the world of DIY, remember that you can always consult an expert at your local hardware store. Another possibility is to ask for these tools and other items as house-warming gifts from friends or family or even as a holiday or birthday gift. Ultimately, with these tools, you should be able to tackle just about any basic DIY project that might come up. Then, once you get more confident in your abilities, you can acquire more tools for those bigger jobs.

   1A.  CHECK YOUR CREDIT. Not sure how to get started, how much you can afford, or what to expect when buying and financing a home? Set yourself up for success with a little bit of preparation.   

  1B  SPENDING TRACKER: Use the Spending Tracker to help figure what is important to you.

          -  Get an Envelope to collect your receipts 

          - Use the Tracker to record your expenses and receipts (Don't forget bills you share with others and   

              auto drafts)

           - At the end of the month add up the columns and see where your monies go, and obtain a better      

              idea for what you can comfortably afford.

2.A  UNDERSTAND YOUR LOAN OPTIONS: Once you have a pretty good idea of your priorities and budget, you're ready to start home shopping in earnest. Now is also the time to start exploring loan choices and meeting with lenders. 

2B.  UNDERSTAND INTEREST RATES:  Keep in mind that the interest rate is important, but not the only cost of a mortgage. Fees, points, mortgage insurance, and closing costs all add up. Compare Loan Estimates to get the best deal. 

3.  Compare Loan Offers::  No loan is a one size fits all. There are loans that are set up to assist Buyers with securing the funds they need, for the property they are looking to buy. The right loan will depend on The price point of the property, the amount of down payment you are able to make, Down Payment Assistance Programs, Loans where repairs are included in the funding, and other situations. THis is where partnering with a trusted lender can be beneficial. 

4A.  Get Ready to Close:    Once you've chosen a mortgage loan, it’s time to focus on the closing process. There will be lots of paperwork to submit and things to keep track of. We lay it out for you step by step.  

Closing on a new home can be one of your most memorable life moments. It’s the final and one of the most critical stages in the home-buying journey, but with the exchange of key paperwork and a sizable down payment, it can also be a stressful experience, especially for first-time homebuyers.  

The FBI has reported that scammers are increasingly taking advantage of homebuyers during the closing process. Through a sophisticated phishing scam, they attempt to divert your closing costs and down payment into a fraudulent account by confirming or suggesting last-minute changes to your wiring instructions. In fact, reports of these attempts have risen 1,100 percent between 2015 and 2017, and in 2017 alone, there was an estimated loss of nearly $1 billion in real estate transaction costs. 

While it’s easy to think you may not fall for this kind of scam, these schemes are complex and often appear as legitimate conversations with your real estate or settlement agent. The ultimate cost to victims could be the loss of their life savings. 

Here’s what you should know and how to avoid it happening to you.

Scammers are increasingly targeting real estate professionals, seeking to compromise their email in order to monitor email correspondences with clients and identify upcoming real estate transactions. During the closing process, scammers send spoofed emails to homebuyers – posing as the real estate agent, settlement agent, legal representative or another trusted individuals – with false instructions for wiring closing funds.

• Identify two trusted individuals to confirm the closing process and payment instructions. Ahead of your mortgage closing, discuss in person, or by phone, the closing process and money transfer protocols with these trusted individuals (realtor, settlement agent, etc.). Be cautious about exchanging any details about your closing over email. You may want to use this opportunity to also create a code phrase, known only by these trusted parties, if you need a secure way to confirm their identities in the future. 
• Write down their names and contact information. Use the Bureau’s Mortgage Closing Checklist  to list these individuals and their primary phone numbers.
• Before wiring money, always confirm instructions with your trusted representatives. Never follow instructions contained in an email. Verify the closing instructions, including the account name and number, with your trusted representatives either in person or by using the phone number you previously agreed to.
• Avoid using phone numbers or links in an email. Again, scammers can closely replicate the email address, phone number and format of an exchange from your agents. Avoid clicking on any links or downloading attachments without first confirming with your trusted representatives.
• Do NOT email financial information. Email is never a secure way to send financial information. 
• Be mindful of phone conversations. It may be difficult to identify whether a phone call is fraudulent or legitimate. Scammers may call and ask you to verify your personal or financial information. When in doubt, always refer back to your trusted professionals to confirm whether it’s legitimate. 

• Contact your bank or wire-transfer company immediately. Ask for a wire recall. Reporting the error as soon as possible can increase the likelihood that you’ll be able to recover your money.
• File a complaint with the FBI. Contact the FBI’s Internet Crime Complaint Center at www.ic3.gov .

While it can be easy to think you’ll never fall for a scam of this nature, the reality is that it’s becoming more and more common, and the results can be disastrous for eager homeowners. By being mindful and taking a few important steps ahead of your closing, you can protect yourself and your loved ones.

To learn more about the closing process, including how to prepare for your closing and common pitfalls to avoid, check out our Mortgage Closing Checklist .

As you might imagine, real estate agents field quite a few questions every day. People are naturally curious, and it’s an agent’s job to guide folks through the often-complex world of home buying and selling. You might also imagine that some questions about real estate come up more often than others. Whether you’re a first time buyer or repeat buyer who could use a refresher on how deals get done, here’s are some answers to the questions that come up most often.

Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender get the ball rolling in the right direction.

Here’s why:

First, you need to know how much you can borrow. Knowing how much home you can afford narrows down online home searching to suitable properties, thus no time is wasted considering homes that are not within your budget. (Pre-approvals also help prevent disappointment caused by falling in love unaffordable homes.)

Second, the loan estimate from your lender will show how much money is required for the down payment and closing costs. You may need more time to save up money, liquidate other assets or seek mortgage gift funds from family. In any case, you will have a clear picture of what is financially required.

Finally, being pre-approved for a mortgage demonstrates that you are a serious buyer to both your real estate agent and the person selling their home.

Most real estate agents will require a pre-approval before showing homes - this is especially true at the higher end of the real estate market; sellers of luxury homes will only allow pre-screened (and verified) buyers to view their homes. This is meant to keep out "Looky Lous" and protect the seller’s privacy. What’s more, by limiting who enters their home, sellers are given extra security from potential thieves trying to case the home (like identifying security systems, locating expensive artwork or other high-value personal property).

From start (searching online) to finish (closing escrow), buying a home takes about 10 to 12 weeks. Once a home is selected an the offer is accepted, the average time to complete the escrow period on a home is 30 to 45 days (under normal market conditions). Though, well-prepared home buyers who pay cash have been known to purchase properties faster than that.

Market conditions are a major factor in how fast homes are sold. In hot markets with a lot of sales activity, buying a home may take a little longer than normal. That’s because several parties involved in the transaction get behind when business suddenly picks up. For example, a spike in home sales increases the demand for property appraisals and home inspections, yet there will be no increase in the number of appraisers and inspectors available to do the work. Lender turn-around times for loan underwriting can also slow down. If each party involved in a deal takes a day or two longer to get their work done, the entire process gets extended.

In sellers’ markets, increasing demand for homes drives up prices. Here are some of the drivers of demand:

• Economic factors – the local labor market heats up, bringing an inflow of new residents and pushing up home prices before more inventory can be built.
• Interest rates trending downward – improves home affordability, creating more buyer interest, particularly for first time home buyers who can afford bigger homes as the cost of money goes lower.
• A short-term spike in interest rates - may compel “on the fence” buyers to make a purchase if they believe the upward trend will continue. Buyers want to make a move before their purchasing power (the amount they can borrow) gets eroded.
• Low inventory - fewer homes on the market because of a lack of new construction. Prices for existing homes may go up because there are fewer units available.

A buyer’s market is characterized by declining home prices and reduced demand. Several factors may affect long-term and short-term buyer demand, like: Economic disruption - a big employer shuts down operations, laying off their workforce.

• Interest rates trending higher – the amount of money the people can borrow to buy a home is reduced because the cost of money is higher, thus reducing the total number of potential buyers in the market. Home prices drop to meet the level of demand and buyers find better deals.
• Short-term drop in interest rates – can give borrowers a temporary edge with more purchasing power before home prices can react to the recent interest rate changes.
• High inventory – a new subdivision and can create downward pressure on prices of older homes nearby, particularly if they lack highly desirable features (modern appliances, etc.)
• Natural disasters - a recent earthquake or flooding can tank property values in the neighborhood where those disruptions occurred.

A stratified market happens where supply and demand characteristics differ by price point, in the same area (typically by city). For example, home sales for properties above $1.5M may be brisk (seller’s market) while homes under $750k may be sluggish (buyer’s market). This scenario comes along every so often in West Coast cities where international investors - looking to park their money in the United States - buy expensive real estate. At the same time, home sales activity in mid-priced homes could be entirely different.

Home shoppers pay little or no fees to an agent to buy a home.

Here’s why:

For most home sales, there are two real estate agents involved in the deal: one that represents the seller and another who represents the buyer.

Listing brokers represent sellers and charge a fee to represent them and market the property. Marketing may include advertising expenses such as radio spots, print ads, television and internet ads. The property will also be placed in the local multiple listing service (MLS), where other agents in the area (and nationally) will be able to search and find the home for sale.

Agents who represent buyers (a.k.a. buyer’s agent) are compensated by the listing broker for bringing home buyers to the table. When the home is sold, the listing broker splits the listing fee with the buyer’s agent. Thus, buyers don’t pay their agents.

Most loan programs require a FICO score of 620 or better. Borrowers with higher credit scores represent less risk to the lender, often resulting in a lower the down payment requirement and better interest rate. Conversely, home shoppers with lower credit scores may need to bring more money to the table (or accept a higher interest rate) to offset the lender’s risk.

The national average for down payments is 11%. But that figure includes first time and repeat buyers. Let’s take a closer look.

While the broad down payment average is 11%, first time homebuyers usually only put down 3 to 5% on a home. That’s because several first-time home buyer programs don’t require big down payments. A longtime favorite, the FHA loan, requires 3.5% down. What’s more, some programs allow down payment contributions from family members in the form of a gift.

Some programs require even less. VA loans and USDA loans can be made with zero down. However, these programs are more restrictive. VA loans are only made to former or current military servicemembers. USDA loans are only available to low to-middle income buyers in USDA-eligible rural areas.

For many years, conventional loans required a 20% down payment. These types of loans were typically taken out by repeat buyers who could use equity from their existing home as a source of down payment funds. However, some newer conventional loan programs are available with 3% down if the borrower carries private mortgage insurance (PMI).

If the built-up equity in your current home will be applied to the down payment on the new home, naturally the former will need to be sold first.

Some home buyers decide to turn their current home into an investment property, renting it out. In that case, the current home will not need to be sold. However, your loan advisor will still need to evaluate your risk profile and credit history to determine whether making a loan on a new home is feasible while retaining title to the old home.

Buyers often have a short time frame to sell their current home when relocating to a new city because of a job transfer. If you are moving but taking a position with the same employer, check to see if they offer relocation assistance to help offset some of the costs.

That’s up to you! For sure, home shopping today is easier today than ever before. The ability to search for homes online and see pictures, even before setting a foot outside the comfort of your living room, has completely changed the home buying game. Convenience is at an all-time high. But, nothing beats visiting a home to see how it looks and ‘feels’ in person.

When you make an offer on a home, your agent will ask for a check to accompany it (checks are the same as cash, and the deposit is typically 1% to 2% of the purchase price). Earnest money is made in good faith to demonstrate - to the seller - that the buyer’s offer is genuine. Earnest money essentially takes the home off the market to anyone else and reserves it for you.

The check (or sometimes cash) is deposited in a trust or escrow account for safekeeping. If a deal is struck, the earnest money is applied to the down payment and closing costs. If the deal falls through, the money is returned to the buyer.

Important: if the terms of a deal are agreed upon by both parties, but then the buyer backs out, the earnest money may not be returned to the buyer. Ask your agent about the ways to protect your earnest money deposit and the ways to protect it – such as offer contingencies.

Written offers should stipulate the timeframe in which the seller should respond. Giving them twenty-four hours should be sufficient.

Sellers can flat-out accept or reject an initial offer. But there a third path that is quite common, sellers can initiate a counteroffer. Remember this: a deal isn’t dead until it’s dead. So, if a counteroffer is proffered by the seller, you’re still in the game. You and your agent just need to review it determine whether the counteroffer is acceptable. If so, then approving it closes the deal immediately. Keep in mind, offers and counteroffers can go back-and-forth many times; this is not unusual and negotiations are a part of what Realtors do as a matter of routine. Each revision should bring both parties closer together on the terms of the deal.

Yes! Home inspections are required if you plan on financing your home with an FHA or VA loan. For other mortgage programs, inspections are not required. However, home inspections are highly recommended because they can reveal defects in the home that are not easily detected. Home inspections bring peace of mind to one of the biggest investments of a lifetime.

It’s not required, but it’s a darn good idea! Final walk-throughs give buyers a chance to make sure nothing had changed since their first visit. If repairs were requested, as part of the offer, a follow-up visit ensures that everything is squared-away, as expected, per the terms of the contract.