- The Washington Times - Friday, March 9, 2001

Henry Brooks Adam said, "All experience is an arch to build upon." First-time home buyers lack experience in building or buying a home and so tend to make more mistakes than do homeowners making an offer on their next home.

Realtors agree that first-time buyers often lack education about the entire home-buying process and often are unwilling to trust their agent to lead them in the right direction. It's a common first mistake.

"First-time buyers have a tendency not to believe what their agents are telling them," says John Halpin, a Realtor with RE/MAX Realty Center in Olney. "Buyers are sometimes skeptical of Realtors, so they try to gather information without professional help. They need to interview at least three agents before they do anything else so they can pick an agent they're comfortable with."

Realtor Carol Temple of Coldwell Banker Stevens in Arlington recommends that buyers rely on recommendations from friends along with personal interviews when choosing a Realtor.

"Buyers should schedule a purely informational meeting with several agents without the expectation of looking at homes and then choose a full-time agent. Once they've chosen that agent, they should be prepared to follow the agent's lead," she says.

One common misperception among buyers is that they do not need an agent.

"Buyers often think if they are buying a new home that they don't need a real estate agent to represent them," says Bonnie Kyte, a Realtor with RE/MAX Choice in Fairfax. "They don't understand that whoever's on site works for the builder. Buyers don't realize sometimes that they don't have to pay the Realtor's commission, that either the seller or the builder will pay their fees. So a buyer can gain the Realtor's experience for free."

Elaine Murray, a Realtor with Weichert Realtors in Fairfax, says she thinks first-time buyers too often decide to start looking at homes as their first step.

"Lots of people get excited, but they are not educated enough to know whether or not they can afford to buy a house. They should start by attending home-buying seminars and meeting with a Realtor," she says.

First-time buyers must start by talking with a Realtor who can recommend a lender or by talking with a lender themselves to obtain preapproval for a loan.

"A major mistake people make is that they don't know how much they can afford to spend, and they have no idea where they stand financially," says Realtor Jim Anzalone, who works with his wife, Chris Cormack of the "CC Sells" team at Keller Williams Realty in Ashburn.

"Buyers should use all the available resources they can find, including places such as the FannieMae.com Web site, which even has calculators to help determine how much home you can afford. Because of the nature of the market we're in, most first-time buyers do know that they need to be pre-approved for a loan before they can make an offer on a house."

Many potential buyers feel they must save more money or straighten out their credit problems before applying for a loan and do not realize the potential assistance available from lenders.

"People are afraid if they have had credit problems they can't buy a house, but bad credit can be fixed," Miss Kyte says. "It may take time, but there are usually ways to get people into a house. Some people think they haven't saved enough and need to wait, but there are even 103 percent loans available. These loans may not be at the best rate, but they offer people a chance to own a home. Sometimes we can get a seller to put up some cash or bump up the price a bit to accommodate that extra cash for closing. The main thing is for people to work with a Realtor and work with a lender so we can see where they stand."

Choosing the wrong lender or the wrong loan also is a common mistake made by first-time buyers, Realtors say.

"People often think they can go through the Internet and find a loan, but they don't understand the hidden costs of a loan," Miss Murray says. "Some of the junk fees thrown in by these companies can be high, and I've seen problems crop up at settlement when buyers choose the wrong loan company. Buyers don't understand that even if they are saving one-fourth of a percent in interest rates, they may be paying higher costs some other way."

Once first-time buyers understand that they cannot make an offer on a home without loan approval, the next step is to begin looking for a home. Pitfalls during this portion of the home-buying process also exist, including looking at too many or too few homes, relying too heavily on the Internet and having expectations that are too high.

"Before going out with a Realtor to look for a home, buyers should list in rank order what their priorities are," Mr. Anzalone says. "If having a short commute is of primary importance, then they might need to choose a smaller home closer to their work. If they can only afford to spend a certain amount of money and they find a home they like and a community they like, it might be on the wrong end of the commuting pattern. People need to think clearly about these issues before they shop for a house. A big mistake buyers make is not narrowing their search to a couple of communities before they start to look at homes."

Though it's always a good idea for people to rely on their Realtors, first-time buyers often don't understand that because of fair-housing laws, Realtors cannot steer their clients to a particular neighborhood or give them information about the schools in any district. A Realtor can't even tell a client with children that they'll like a particular street because there are lots of children on it even if the clients tell their Realtor they are looking for a cul-de-sac neighborhood full of youngsters.

"What I suggest to buyers is that when they have found a neighborhood or a house that they might like, they should drive [there on] their own on Saturday at 11 a.m., Tuesday at 8 a.m. and Thursday at 6 p.m., all to see who's around and to test out the commuting pattern. To get information about schools, buyers should look on the Web, and they should make sure to look at the elementary, middle and high school levels," Mr. Anzalone says.

Miss Kyte points up another potential trouble spot. "Some younger buyers in particular want everything their folks have in a home, and they don't realize how expensive homes are in this area," she says. "They need to be prepared to make some lifestyle changes, such as living farther away from the city or living in a smaller, older home if they want to be near their jobs."

Although using the Internet as a research tool can be helpful, Realtors also see pitfalls involved.

"I find that all buyers, but especially first-time buyers, are relying way too heavily on the Internet. When we put listings into the [multiple listing service] they are available within minutes on our local system, but it can take up to 10 days to see those listings on Realtor.com," says Charlene Wyman, a Realtor with Long and Foster Real Estate in the Tysons Corner Central office.

"That's way too much of a lag time in this market, and most of the homes are already sold by the time buyers see them on line. Buyers should be using the Internet for fact-gathering and general information, but they need to rely on [a] buyer's agent to help them find a home quickly."

Once buyers have found the home of their dreams, or at least one that meets their minimum qualifications, a new area for potential mistakes comes into play: making an offer.

"First-time buyers learn by experience about making an offer in this seller's market," Mr. Halpin says. "Usually they don't make an offer quick enough until they've lost a house or two that they wanted."

Mrs. Temple adds: "The greatest mistake buyers make is clinging to the idea that they have to see more houses. They don't realize that if they're working with a seasoned agent who really listens to them and knows what they want, that agent will show them the best that is out there in their price range. If they continue to look at more properties, then they decide they want the first house they saw, [it might not] be available anymore. Their fear of missing out on some other house gets in the way of making a good decision."

Mr. Anzalone agrees that the right Realtor, one who listens well to his clients, often needs to show just six or seven houses to that client before the right one is found.

"One of the mistakes first-time buyers make is falling in love with a house and becoming so nervous about losing that house that they decide to forgo a home inspection," Mr. Anzalone says. "Allowing emotions to overrule the common-sense practice of hiring a home inspector could be the worst mistake a buyer could make."

On a positive note, Mrs. Temple says, "There are more protections out there for buyers than they realize, and everyone needs to make the best decisions they can with the ingredients at hand. Nothing is forever, and people can always sell their home later if they've made a bad choice."

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