Diary of a Realtor Helping First Time Home Buyers, Part 1

I have a very nice young couple who called me about one of my ActiveRain posts on First Time Home Buyers. We talked a bit about their circumstances and decided that we felt comfortable enough for them to talk with a lender about getting prequalified to purchase. After completing the process with the lender, we know that we can qualify for an FHA loan and that we will be asking the seller for concessions for closing costs. We know our range and the "hunt" has begun. They are a lovely couple with a six month old daughter.

We saved a MLS search for them in their price range of all listings on the market in their area. I like my first time home buyers to get famiiar with the market as a whole. They need to understand the compelling market value of the 3/2/2, central air and heat and having a good roof.

Many times, first time home buyers will look at buying anything. They will also think they can do a fixer. If we get to know the market well enough then they become knowledgeable about the market and what a "good buy" is. They also learn that sometimes you can find that "good buy" without it having to be the dreaded "fixer". It costs money to do the fixers and most people underestimate what that cost will be. I like to actually set down and go over the numbers that will include "sweat equity hours" and the costs associated with that time. I see it over and over, where people have remodeled and spent money they will never recoup.

We met for the first time yesterday afternoon. We went over all the listings that were possibilities.

We discussed foreclosures and short sales and how they may not work for us. However, there might be something in those two categories that could. It would be my job to figure that part our with the discovery of the history and current situation of the property; talking with the listing agent; and doing a CMA to determine investment opportunity.

We picked four houses to go see out of twenty. Three short sales and 1 foreclosure.

The first short sale home (3/1/1) had a black substance in the back bath and we felt that we could not take the baby into the back part of the home. It was painted a not very attractive green throughout....very roughly painted. The kitchen had been remodeled at some point but now worn, dirty and in need of another remodel. The roof looked newer but may have been a roof installed over another roof....never the best. All in all if it had not had the black substance, functionally we could have considered the home....although I pointed out that when we get current with the market and know the market.....we will find a good value....we must be ready to move and getting them to that level of confidence would be the goal. We could do better.

The second house (3/1/1) was much better. The roof looked good. The kitchen and bathroom were original and there was wall paper that would have to go throughout most of the home. The back yard was knee high in weeds. Functionally speaking this home looked much better.

The third home was an REO and in a slightly worse location. It look good from the outside and the roof looked new. We walked in and about died. The smell was so bad that it hit us like a wall. We got in to the kitchen area....the garage had been converted (which we talked about is never the best investment.....the standard 3/2/2 is the best conventional invsestment) and the kitchen was a black hole.....we turned and left without even looking at the rest of the house. It was way overpriced.

The last home was a short sale (3/1/1) with a good roof, pergo floor and very neutral in all ways. Very functional with a new deck on the back. It had a note on the door of a Trustee Sale scheduled for 9/25/08.

My clients are not ready to make a decision yet....we don't know the market well enough and so this might have worked, but I personally know we can do better. We are going to have to be at the right place at the right time....my job and respsonsibility is to make sure that opportunity comes around and that we are where we can make it happen.

We've scheduled another evening of seeing 1,2 or 3 more homes in town. We are headed to Lake California on Saturday to look at homes there.

We have begun and we will be successful in finding this nice couple a new home. They have lots going for them. He's in construction and can update the home. She works with interior design and will be updating the look of the home. We've talked about doing these activities with seconds and discontinued products at Loews or Home Depot. Doing it on the "dime" is the only way to go!

I'll keep you posted on our progress. What was that REO agent thinking on that smelly house?

I am Jeanean Gendron and you can reach me at 530 276-7417. I answer my phone. Visit our websites to learn more about Redding and Shasta County Real Estate.