While many of my Realtor colleagues are telling each other about the woes of losing in multiple offer situations on single family homes that are flying off the market in a matter of days, I have a few inspiring stories that might be of particular interest for first-time homebuyers.
I recently got two of my clients under contract on two separate one-bedroom condos, without having to drop home inspection contingencies. We were able to offer a reasonable period with which to settle (the standard 30-day close) as well as both of my clients received money back at the settlement table. There were various reasons for these situations – but mainly because they were new construction condos and were one of the last units in the project to be sold. In one case we got the sellers to offer 3% toward the buyers’ closing costs, which saved them cash to close. In another instance we were able to write the offer for a few thousand dollars more than the sale price of the condo, and then ask for that same amount of money back toward the buyer’s closing costs.
For first-time homebuyers who are renters right now, this is a very advantageous period to look for a loan, with historically low interest rates, which as of Wednesday April 7 the average APR on a conventional 30-year fixed-rate mortgage fell 1 basis point to 2.975% (Nerdwallet.com). Coupled with the programs offered by the various jurisdictions in the area, such as DC Opens Doors, HPAP, EAHP, and the various programs offered in PG County, Northern Virginia, and Montgomery County, some buyers may find that they don’t need as much cash to close on a condo as they think they might. One question I get at many of my homebuyer seminars is: “Do I really need 20% to put as a down payment on a home?” The answer is “No.” Many programs will allow you to put as little as 3%, 3.5%, 5% or 10% down toward the purchase price of a home.
It helps to have a trusted local lender to help you navigate your way through all the various options you have when you are a first-time borrower. They will run the numbers of various scenarios using the information you have provided to them with regard to your income, taxes, credit score, and debt to income ratio to help formulate the best loan program for you.
They will also ask you what monthly payment you are comfortable with, and that will also help inform the type of loan program and down payment amount, or various other credits you might be able to receive or ask for as a buyer in a given situation. It helps to understand that these situations mentioned in this article were unique to the circumstances related to these particular buyers and sellers. But a good agent will help find out if there are any circumstances that might be advantageous to both sides of the transaction, and try to facilitate the best deal, along with the lender and cooperating agent, that the buyers and sellers can get.
If all this sounds interesting, but you might want more information, don’t hesitate to attend my next virtual homebuyer seminar on April 20. For sign-up info go to dcrealestate.com/seminar. This will be hosted by me and an experienced local lender.