Realtors share tips for buying your first home
By Carlo Wolff
Buying your first home is a big step. Family, friends and real estate agents can help you reach that decision. If you’re ready to act on it, engage a Realtor who can guide you through the process, from identifying the home you want to getting the keys. As Realtor Michael Cancelliere of Howard Hanna says, buying a home isn’t rocket science. But it’s more than common sense.
Cancelliere and Realtor Adam Zimmerman of Engel & Völkers Distinct Real Estate, both based in Pepper Pike, said first-time home buyers should engage with a licensed real estate agent to help them in their home-buying journey.
Making The Choice
Cancelliere offers key points to consider, in a kind of personal credo. Luxury real estate adviser Zimmerman goes by a “rule of three,” advising clients to vet three different lenders and three different home inspectors before settling on the ones who will steer them through the process.
“Just having a Realtor is paramount because we’re in tune with the community, with what’s out there,” Zimmerman says. “We’re even privy to what might not be out there in the public eye. So, it’s always important to have a licensed professional, especially somebody that’s doing it at a high level on a full-time basis.”
A Realtor can also help you answer important questions like whether you truly want to be a homeowner, and if you can you afford to be a homeowner. “It’s a big responsibility,” Cancelliere says. “Once you own a home, it’s on you.”
Don’t make this decision under pressure. Make it at the right time. “I don’t really subscribe to the dogma you have to buy as soon as you’re ready,” says Cancelliere, a renter in Shaker Heights. “I think if you’re in a stable position financially to buy and it’s something you want to buy in your price point you can afford, it’s a good time.”
A lender can help determine how much house you can afford based on your financial condition and prospects. And reducing or eliminating any high- interest debt, like credit card debt, helps a buyer qualify for a mortgage.
“Almost everyone has student loan debt, and that’s OK,” Cancelliere notes, “but a lot of people have high credit card debt.”
According to investopedia.com, the lower the debt-to-income ratio, the more likely “a borrower will be approved, or at least considered, for the credit application.” Lenders prefer a DTI lower than 36%, with no more than 28% to 35% going toward servicing a mortgage, the website says.
Neither Cancelliere nor Zimmerman advises overextending yourself. Just because a lending institution qualifies you for a $500,000 mortgage doesn’t mean you should buy a half-million-dollar home, Zimmerman says. Determine what level of loan you’re comfortable with, “and if (the lender) tells you it’s $2,000 a month, you really should be considering homes based on your down payment, based on where the rates are,” he says.
“… The last thing I want is for somebody to be beholden to their home, to not be able to experience life outside of those four walls.”
Shopping Around
Once you and your lender figure out what you can afford, shop around. Red flags to look for on house tours? Water in the basement, mold on walls and/or ceilings, condition of windows (are they the original wood and painted shut?) and, Cancelliere says, outdated knob-and-tube wiring common in a market where “almost all our housing stock was built before World War II.”
Zimmerman advises inspections no matter the age of the property, even ones still under construction.
“A lot of times, if you’re building new construction, doing a pre-drywall inspection is the best time because they can see what they’re doing before the drywall goes up,” Zimmerman says.
He notes that working with professionals is particularly important “now that the real estate climate has changed a bit, with some new rules and regulations.”
This past summer, Ohio Gov. Mike DeWine signed legislation designed to standardize real estate practices. According to ohiorealtors.org, House Bill 466 “sets a new standard for transparency and trust in real estate transactions across the state by requiring written agreements between real estate agents and their clients.” Those agreements must include expiration dates, fair housing information and relationship exclusivity. Before, no exclusivity was required.
“As of Aug. 17 of this year, in order to look at a home with a real estate professional, you need to have what’s called a buyer-exclusive agreement,” says Zimmerman. “It’s the same if you’re wanting to list your home for sale – you have an exclusive with that Realtor that goes on the buy side now.”
Implementation of the Ohio House bill follows a March 15 settlement of litigation against the National Association of Realtors brought on behalf of home sellers related to broker commissions.
Zimmerman, a property owner who lives in Orange, says real estate is always a good investment. Selecting the right partners in this complex, often-stressful process is critical, he suggests. If working with professionals is key to successful home buying, so is learning as much as possible about the condition of the home you’re considering, even a brand-new one.
Finding a Real Estate Agent
So how do you find a good Realtor?
“At Engel & Völkers, we rely on referrals and our sphere of influence,” Zimmerman says. “Generally speaking, a lot of people, especially first-time home buyers, will ask their friends, ask their parents, people that have more experience.”
But times have changed with the internet as people often look for homes on zillow.com and realtor.com. Some will also seek out real estate agents on social media.
“Having that social media presence is also paramount because that’s how a lot of people are seeking out homes,” Zimmerman says. “A lot of people, even within our own brokerage, are doing quite a bit of business based on that social media presence.”
If people “see you on social media, they really feel like they know you – even if they don’t actually know you,” he adds.
Scrolling through real estate websites and seeing a potential home on your computer or smartphone isn’t the same as walking through the real thing, however. There’s nothing quite like stepping into the actual home you’ve dreamed of. Zimmerman conjures that eureka moment.
“We can have our first meeting and you can tell me as a buyer, ‘This is the kind of house that I want,’” he says. “And you know what? By the second time we’re out looking at houses, what you thought you wanted might not be what you want. … As a first-time buyer, you might not know what you want.”