Seven tips for first time home buyers

May 26, 2014

It can be discouraging for a first time home-buyer out there right now. High prices and a lot of cash buyers can make the process of finding and buying a new home for the first time fairly frustrating. Here are some tips from RealtyTrac’s Daren Blomquist.

1. Have your financing in place: be pre-qualified and pre-approved for a loan so you are ready to move quickly.

2. Don’t make your offer contingent on financing or inspection (even though you are getting financing). This is happening a lot in competitive markets like Seattle. It’s a bit risky though, because if for some reason the deal fell through, you could lose your earnest money.

3. Write a love letter! Seriously, write a letter to the seller of the house. Try to explain why you really need this house, connect with the seller on an emotional level.

4. Brace yourself. You’re not gonna get the first house you put an offer on. You’re going to be making many offers, and you should be prepared to for this. Fight buyer fatigue.

5. Go where the cash buyers aren’t. Co-ops in NYC, for example, or homes that need more rehab than usual.

6. Find sellers before the cash buyers do. Look at unlisted bank-owned homes, pre-foreclosures, or just knock on doors to find out who’s going to sell soon.

7. If you can’t beat them join them. Some people have found crowd-funding works, where they pool money with friends and family to purchase a home with cash. You can also use a self-directed IRA, a type of retirement account you can use to buy with cash.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.