Home ownership may be the most important investment in a buyer’s life, and first-time buyers have more to look forward to with the market back on the rise.
By METTE PEDERSEN, CHERRICA FED, and JOHN STORER
MARIETTA, Ga. – One of the biggest purchases a person will make in his or her lifetime is buying a house for the first time. First-time home buyers are given advice and tips by agents on taking some steps in advance to ensure their life’s significant purchase goes well.
The real estate industry is expecting more first-time home buyers than ever now that the housing market crisis caused by the recent recession has eased.
Rise of the Housing Market
Since Dec. 2014, it has become easier for first-time buyers to purchase homes. New lending guidelines by Fannie Mae and Freddie Mac were put in place that started offering 3 percent down payment mortgages, according to CNNMoney.
Mark Zandi, chief economist for Moody’s Analytics, predicts that a boost in the number of first-time home buyers most likely will cause a domino effect by prompting current homeowners to sell their homes and purchase more affluent homes, according to CNNMoney.
“Northern Georgia would be a great place to purchase your first home with the economy doing so well,” said real estate agent, investor, and first-time home buyer Earl Wise.
“The development that we are seeing now is the development that was supposed to happen five years ago before the recession hit,” Wise said. “So what we are seeing now is the economy now catching up to five years back.”
Forecasts look better for new home buyers with both the job market improving and new industries emerging in Atlanta. These new industries create more jobs and more people migrate here and purchase homes.
“Atlanta is just now catching the big buzz in the fact that a lot of industries are coming here,” Wise said.
Some of the Most Important Factors in Purchasing
Looking for the perfect home can be frustrating for the agents and the buyers.
According to Wise, the most critical step for potential buyers is choosing an agent. Wise said he gives his clients a checklist of areas, size house, location, how many rooms, what size yard, and he makes sure they go through that checklist and check off each point.
First-time home buyer Erin Wissing said the relationship she and her husband had with their agent was the best aspect of the buying process.
First-time home buyer Erin Wissing talked about her buying experience. (Photo by Mette Pedersen)
“Having an agent that had patience to walk you through, give good advice and who understands you are a first-time buyer is really nice,” Wissing said.
Aside from choosing an agent, first-time buyers, just as other buyers, are dedicated to finding their “perfect home.”
Cobb County Realtor Kimberley Perez said that first-time buyers tend to want more for less. Buyers find themselves having to compromise on what they want in a home. According to Perez, the buyers have to decide what is more important. Will a fireplace satisfy you more than living 15 minutes closer to work or your kids’ school?
First-time buyers with children tend to be meticulous on location of a home based on school systems.
“It is school driven,” Perez said. “The other thing considered is how far away you are from downtown Atlanta.”
Perez explains that the further from downtown Atlanta the buyers purchase a home, the lower the price point.
If first-time buyers strike a lucky bell and find a home in their “dream neighborhood,” the next critical factor is the price.
According to Perez and Wise, your agent should first find the best possible financing options for you, then decide on the payment you can afford. They advise buyers to not be talked into buying a house they cannot afford.
Wissing said the financing and budgeting were the most complicated parts of the process.
“I didn’t know how to get approved for a mortgage works or how much we could afford,” Wissing said. “When in fact the mortgage company does not care whether the payment suggested still is going to give you the lifestyle you want.”
To save money in the future, Perez suggests buyers to look for the “bones” of the house, which are the things that are not easily changed such as a staircase, bedroom, or the subdivision in which it lies. These considerations will save you from spending large amounts of money on renovations.
Perez also recommends buyers find out how much homes surrounding the house they are interested in are selling for.
“Atlanta and surrounding areas are undervalued,” Wise said. “This is a good thing for first-time buyers, especially those that migrate to North Georgia. Homes and condominiums that sell for millions of dollars in other larger U.S. cities will go for at least half of the price in Atlanta.”
Buyers should hire an efficient inspector of the home they choose, once there is a compromise on the need and wants, price, and location.
From personal experience, Wise explains there is nothing worse than getting excited to get your first home, going through all the extensive paperwork, only to find out you need a new roof, or there’s poor plumbing or electrical work, or the windows are not working properly or are broken.
Earl Wise’s first house. (Photo by Earl Wise)
“I closed on the house, and the first day I purchased the house, the basement flooded, the air conditioner did not work, and the roof leaked,” Wise said. “It cost a lot of money to get those things fixed.”
Impact of Technology Advancement
First-time buyers are using websites and mobile apps at an increasing rate to find potential homes.
According to real estate expert and agent Michael Serkedakis, although Realtors hold the key to listed homes, potential first-time buyers use the Internet to rid agents of the preliminary process of finding homes. This is different as opposed to 20 years ago, when buyers would bring in listings to show agents what homes they want to look at.
“They see a lot of photos on the Internet, even virtual tours,” Serkedakis said. “How many bedrooms, what part of town, the buyers have already seen this on the Internet.”
According to Perez, 94 percent of first-time buyers are looking online first. With her 10 years of being in the real estate field, she found that Realtor.com was the most common. Today buyers and agents like Zillow and Trulia.
Perez says the existence of online searching eliminates the connection with the buyer and the agent. She also warns about the distortion of photos that are made to appeal to the buyers.
“There are glamour shots online, and it is not what you anticipated at all,” Perez said. “Also, you miss the one-on-one connection, especially for a first-time home buyer, I can bring to your attention that you will not be on the lookout for.”
Perez said whether buyers choose to rely on the Internet or more one-on-one communication, the end process of home ownership should be a happy occasion for both the buyer and the seller.
Wissing said her closing was full of laughs and made comfortable by the agents.