Some first-time homebuyers are so fearful of making a mistake that they'll reject a well-priced dream property for an unusual reason, says Ronald Woodall, who runs a real estate brokerage that does 80 percent of its business with first-timers.
"I've been in the business since 1999, and have heard some very strange excuses," Woodall says.
For instance, he recalls one buyer who backed out of a deal for a ranch-style house he loved after spotting a black snake in the backyard, which he took as a "bad omen." Another buyer rejected the townhouse he'd chosen after concluding that its dark-green front door would fade too quickly, thereby requiring repainting.
"I suspect it's often due to fear of commitment," Woodall says of such skittish behavior, adding that Buyers are "overwhelmed at the thought of making so big an investment."
He says an important initial step for first-time buyers involves selecting an agent with whom they feel comfortable.
"It's important to find an agent you really trust and believe to be knowledgeable, not just some cousin who happens to be in the business. To get a feel for the agent, sit down with the person over coffee or lunch. Watch out for anyone who dominates the conversation rather than listening," Woodall says.
Here are a few pointers for first-time buyers:
-- View mortgage pre-approval as a time-saver.
Although the mortgage market has loosened up slightly since the worst of the economic downturn, real estate specialists say it's still crucial that all homebuyers visit a lender's office before shopping for a home. There they can gain mortgage "pre-approval," meaning the lender will check their credit and give them a letter indicating the extent of their borrowing capacity.
"Lenders are more regulated now and you can expect more stringent standards," than during the anything-goes pre-bust years, says Merrill Ottwein, a real estate broker for more than 40 years.
Obtaining mortgage pre-approval also helps ensure that you won't waste precious time visiting properties that are above your price range, says Ottwein, a past president of the National Association of Exclusive Buyer Agents (www.naeba.org).
"People who know very specifically how much they can afford can focus their home shopping and avoid shooting too high. That way, they don't get their heart set on a house that's beyond their means," he says.
-- Look for the strongest neighborhood you can afford.
Nearly all young homebuyers face income limitations when it comes to purchasing property. Even so, Ottwein urges buyers to try for the most desirable neighborhood in their price range.
"It's trite but true that location still rules in terms of long-term property values. That's why it's so key to go on a quest for the best area you can afford," he says.
Even if you can capture a bargain price, buying a big house in a weak neighborhood is the equivalent of buying false gold, according to Ottwein.
"Though you may need to compete for property there, look for an area where homes sell quickly once they hit the market. Communities that are highly valued now should retain their popularity in the future," he says.
-- Look out for any "red flags" about the area's future.
There are several obvious indicators of a neighborhood with a bright future. These include strong public schools and attractive recreational amenities. Other, less apparent signs of strength include easy access to high-quality public transit and quiet streets without a lot of cut-through traffic.
"You never want to be too close to an interstate highway. And you never want to pick a house near a junkyard or a landfill," Woodall says.
Ottwein cautions against buying a place in a neighborhood framed by blighted buildings. For example, you wouldn't want to invest in a home near stores that have gone bankrupt and closed.
"You should also be careful to avoid any neighborhood near lots of vacant land with an uncertain future, unless you've investigated and determined that the land is slated for positive development," he says.
To help avoid a regrettable neighborhood choice, Ottwein suggests buyers explore any area they're considering on Google Maps.
-- Focus on selecting the best available home for the money.
Once you've chosen the most desirable neighborhood you can afford, it's time to search for the ideal home within that community.
Ottwein says your best bet isn't necessarily the largest home within your reach. In fact, you're probably better off buying a small to average-sized house in a sought-after community.
"Surprisingly, as time passes, the small houses on a block tend to increase in value faster than the biggest ones. This is a rule of thumb that nearly always applies," Ottwein says
Are you in the market for a detached, family-style house that should be easy to sell in the future? If so, make sure any property you pick meets certain basic requirements, regardless of its size. It should have an easy-to-navigate floor plan and an eat-in kitchen. Also, if possible, it should have at least three bedrooms and a garage suitable for one to two cars.
What features can you afford to trade off to stay within your budget? Ottwein says the house you choose needn't have a fourth bedroom, high-end "professional" kitchen appliances or an extra-large lot.
Although some first-time buyers are so reluctant to commit that they let the home-selection process drag on, Woodhall says others act too hastily.
"If you're moving from a small rental apartment unit to a house, almost any place you visit will seem impressive. This could cause you to fall in love before you've considered all your options," he says.
To avoid this outcome, Woodhall advises first-timers to visit at least seven to 10 properties in their neighborhood of choice before deciding what to buy. If you're in a hurry, this pre-purchase property tour can occur during a single Saturday.
"Take advantage of the power of comparison to confirm that you've made the best possible choice," he says.
(To contact Ellen James Martin, email her at email@example.com.)