Buying your first home

1. The first step is to find out how much you can afford or qualify for. Check your credit report to know your credit worthiness. Clear up problems if any before going to a lender. A good credit rating will result in you receiving lower interest rates.

2. Get pre-approved for a mortgage from a mortgage broker or lender, with a commitment to fund your mortgage in writing. Look out for frequent payment options and prepayment options, which would help knock off some years from your mortgage. And finally, settle for comfortable monthly payments. Once pre-approved for a loan, you will know your price range to begin shopping for real estate.

3. You should buy the real estate that is right for you. Make a wish list of all the specifications you want in your home. Prioritize them based on your wants and needs. Then mark out those aspects that you are willing to compromise on, in case you need to.

4. Get a good, reputable Real Estate Agent to assist you in locating a property in a desirable location. Your Real Estate Agent will know where to help you look for properties, while keeping your preferences and price range in mind.

5. Once your agent provides you with a list of properties that are affordable, you can drive by to check the neighborhood. Look for a house in a location that has good potential for future appreciation. Consider factors like safety, school districts, freeway access, recreational options, work commute time, shopping facilities etc.

6. Check out a sufficient amount of real estate until you develop a sense of comparative value of each neighborhood. Your real estate agent can help you with the valuation. Visiting the localities at different points in time during the day is ideal. This will help narrow down the list. You might want to check during the morning commute, or after dark to verify that the neighborhood suits you.

7. When you have found a house of your choice, compare its price with other houses in the area. Get your real estate agent to assess the value of the home. If all looks good, write an offer!

8. Lastly, consult your real estate agent to be sure that you obtain any professional inspections necessary to answer any questions you may have about the property. Some concerns may include: the condition of the roof, foundation, walls, plumbing, electrical, windows, etc.

Other concerns may be: Is the property in a flood zone, or wildfire area? Are there CC& Rs? Are there any easements on the property, etc. Your professional Real Estate Agent will assist you in answering these and other questions you may have prior to closing escrow on a property.


For the last five or six years, the real estate market has favored home sellers. Buyers were rushed to make offers and bidding wars were held. Some buyers lost as many as five houses before contracts could be signed. Much of this had to do with the interest rates.

As you know, interest rates have been at a historic low. The ability to borrow money cheaply added a lot of liquidity to the home market. With all that readily available cash, home buyers were plentiful. They wanted to purchase and they had the cash to do it. For the sellers, it was a golden opportunity. They could ask for outrageous prices and get numerous offers in a week. The buyers were paying outrageous premiums.

As the market has shifted, buyers need to account for this. With mortgage reform taking place, this has created more supply then demand and dropping prices in the market. This means the market now favors property buyers. Homes are not appreciating at the moment. Buyers will quickly notice a downward trend in prices and should be able to find a great deal.

However, the jumbo loan market is now beginning to settle, and FHA insured loans are helping fill the subprime vacuum. The volume of existing home sales this year will be better then 2002 the second year of the housing boom. A sharp production pullback of homebuilders will help trim down the housing inventory. The mortgage markets will calm further in the months ahead. It is expected that the Fed will at least cut the interest rate at least one more time before the end of 2007.

Buyers in most areas who do their homework will recognize that housing remains a good long term investment.

Jean M. Ferrara

Nationwide Houses