We’ve been talking to Realtors across the United States to get an idea of what it’s like for first time home buyers in different regions. So far we’ve covered Nashville, St. Petersburg, Salt Lake City and Portland. We got a hold of Matt Preston who works with Twiddy to provide real estate services for the beautiful Outer Banks and Outer banks vacation rentals to answer our questions about buying a home in the gorgeous OBX
Q1. What’s the biggest fear you hear about from first time buyers about the process, and how do you respond to it?
Since I have become a Realtor, some of the first “clients” that I have approached would be my friends, who have never owned a home before.
The first thing that I hear most is “I can’t afford to buy a new home right now.” I always follow that question up by asking, “How do you know?”
People tend to believe that it is not the right time or that there will be something monumental in your life that you have to wait for. All that may be well and true, but you are doing yourself a disservice by not actually knowing what you can afford and where you stand financially. My first three steps with first time buyers are to meet, greet, and qualify. Getting a client to go to a lender and sit down to really understand the process is a big turning point from when potential buyers turn into buyers. Having that preapproval letter from the lender is your golden tickets to make an offer on a home and without most sellers won’t take you seriously.
Q2. When you bought your own first home, what did you learn about the process?
Be prepared to be disappointed at first, and then realize that patience and trust with your agent will be the key to finding your perfect home. Coming from a family of realtors(dad and grandpa), I learned early that every house had its flaw, and I have seen my dad talk many family members out of buying homes even though they seemed just right.
That brings me to my point of trusting your agent. You must put everything out there so that your agent can know every want, need, and concern that you might have so that they can guide you in making the best possible decision.
This process can take a while, and with the emergence of real estate apps now every buyer has the information right at their fingertips. After a while of looking for a home, buyers learn the market more and more every day and when that perfect house at a good price becomes available, you need to be ready to make that offer with your preapproval letter in hand. Once you find house that you believe is right and you get it under contract, you need to learn everything about that home from the inside out.
That brings me to my next point, do not be cheap during the due diligence period. The due diligence period is the time between going under contract and a week or two before closing, this is where you pay for services to find out more about the home. Most first time buyers may be strapped for cash, so the idea of paying for an appraisal, home inspection, survey, pest inspection, and other services can be overwhelming.
PAY FOR THEM! Everyone has a “buddy” that works on different parts of a house and won’t charge you anything to look them over, but that is not good enough. If you are making this 30 year commitment, take the extra money to get licensed professionals to do all of the services during due diligence.
Lastly, have all of your finances in order. With new lending regulations that have been implemented since the crash, banks and lenders may continue to ask for updated information until the loan is closed. Remember, once your attorney calls you and lets you know that the deed has been recorded at the courthouse, it’s your house and no one else is responsible for it, but you.
Q3. Is now a good time to be a first time buyer? Why or why not?
It is a great time to be a first time homebuyer! Interest rates are low and the market has seen a steady uptick. There have been more home sales and fewer foreclosures over the past couple of years to support that. People had a scare per usual being an election year, but things seem to be settling down now. I am speaking for my area when I say finding a nice affordable rental property on the Outer Banks can be tough. We are home to residents that love to live an “endless summer” lifestyle.
This means work pretty much every day from May to October and at first sight of cold weather, migrate somewhere warmer in search of tropical beaches and great waves. When spring comes around, it is time to come back and do it all over again. I did this myself, and every spring I found myself searching for a new place to rent for the summer season, and after a few years of doing that, I was over it. Would if I told you that you could have it both ways?
First time home buyers think that buying a house means that you have to give up certain parts of your past lifestyle. Why? Rental rates can be higher than your mortgage might be, and if you are used to having roommates, rent a room out in a house that you own. The last client that I sold a first home to closed one week and then was off to Mexico the next for a month. This all leads back to getting your finances in order and seeing what you can afford.
Q4. Is there anything special or unique about your city or state that first timers should know about?
The Outer Banks is very unique area to be a first time homebuyer in. It is important to have full knowledge and understanding of different parts of the Outer Banks. We are an area that has been greatly affected by storms that may have caused homes to have seen flooding at some point and time.
Looking strictly at what flood zone a house sits in would not do justice in my opinion. I like to be able to tell my clients exactly how much flooding a house can potentially have based on my knowledge of growing up in this area and seeing how different storms affect different areas. Being a seasonal vacation destination, choosing the right location can greatly help you financially.
A lot of residents have turned to companies such as AirBNB and VRBO in order to make some rental income during the busy months of the year. Some of my clients have been able to almost pay their entire year’s mortgage by renting out part of their home. If this is a route that you plan on going, it would be smart to mention it your lender, to get professional advice with how that extra income may affect you. Location is very important when buying your first home on the Outer Banks, so all of this needs to be considered when buying your first house.
I mentioned earlier this being a 30 year commitment, but in reality it rarely lasts that long. Marriage happens, kids are born and one day you realize that you have outgrown this dream home that you saw yourself living in for the next 30 years. Thinking of resale value is very important when you are buying your first home.
Think to yourself, what are the demographics of the people that might also be looking for this house? Being a coastal resort area, a lot of buyers may be look at the home as a second home or retirement home. Features such as having a the master bedroom on the lower floor can greatly help someone who might be elderly and not want to climb three flights of stairs to get to their room.