54 LONGISLANDPRESS.COM • JULY 2021
PRESS HOME
TIPS FOR FIRST-TIME HOME BUYERS
2. Get a thorough preapproval.
In such a hot market, it’s more essential
than ever to get preapproved for a mortgage
for the highest amount possible
by a bank, credit union, or mortgage
company. “Keep in mind that not all
preapprovals are equal,” said Kristel
Weidenman, a licensed real estate
salesperson with Signature Premier
Properties in Northport. If the lender
rubber stamps you after simply asking
you a few questions, you will likely be
passed over in a multiple-bid situation
for a buyer whose lender did the proper
due diligence. “Some lenders go the
extra mile – running credit reports,
asking for paystubs, W-2s and tax
returns, and even passing it through
their underwriting department to issue
a precommitment letter,” Weidenman
said. “Their preapprovals are almost
like a guarantee.” In addition to the
mortgage preapproval, have proof
readily available that you are able to
put down the amount of cash you are
offering.
3. Figure out the maximum you can
afford.
The preapproval process can help you
figure out the maximum home price
you can afford. “In this market, it’s
crucial that you know what you can
stretch to,” Fox said. You may have a
ceiling in mind, but running the numbers
may help you realize that a price
tag that you thought was out of reach
would only amount to $20 or $30 more
a month, he added.
Beside the mortgage, you will need
to factor in utilities, real estate taxes,
insurance and other expenses. “The
biggest surprise for first-time buyers is
the expense of homeowners’ insurance
and, for those who need it, flood insurance,”
Fox said. “You may be surprised
by which homes do and do not require
flood insurance.”
4. Make as attractive an offer as
possible.
In this market, you need to put your
best offer forward. If you and your real
estate agent have done your homework
on home values, you should
have a good idea of how much you
need to offer in relation to the asking
price. “Some buyers are at the point
of exhaustion and will say outright, ‘I
know I’m overbidding for this house,
but I’m tired of putting in offers and
not getting them accepted,’” Weidenman
said. In many cases, going above
the asking price is necessary to get the
house. “But we don’t want our buyers
to overbid crazily,” she said. “You
want the comps (recent sale prices of
comparable properties) to support the
offer.”
Buyers who are financing must realize
that if their offer is accepted, their
lender will do an appraisal, and if the
appraisal is lower than the sale price,
the lender may only give a mortgage
based on the appraised price. “If your
offer is for $900,000, and the house
appraises at $850,000, where will
the additional funds come from?”
Weidenman said. “The buyer may
need to come up with the additional
cash to make up the difference, or if
the buyer doesn›t have the extra cash,
the seller may have to renegotiate the
price down to meet them.” However,
in this hot market, many sellers will
not want to renegotiate and lower the
price. In order to make their offers
more attractive, some buyers have
been waiving the appraisal contingency
– that is, agreeing to pay the
contracted price even if the appraisal
comes in low. “Personally, as a buyer’s
agent, I do not recommend this approach
to my buyers as it can make
for a tricky situation,” Weidenman
said.
5. Have your other pros lined up.
Besides a lender, you need to have your
attorney and engineering inspector
on speed dial. “I call it assembling the
A-team,” Governale said. “Interview
attorneys and choose one who specializes
in real estate in the local market
– not your Uncle Bob who doesn’t do
much real estate work.” Interview a
couple of engineering firms, too, Cardinale
advised, “so you can tell them,
‘I’m bidding on a hot house, what’s
your availability next week?’ and
pencil them in. Engineers are busy
now, so you should have a backup in
case the other’s busy.”
A seller that chooses your offer from
multiple bids will be breathing down
your real estate agent’s neck, making
sure the contract is signed without
delay.
“In this market, you want to be able to
go from an accepted offer to a signed
contract in about a week,” Governale
said.
continued from page 53
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