First Time Buyers’ Resources

What Kind of Agent Should I Look For?

This one is easy – look for a full service Realtor® who represents exclusively you, the buyer. If you approach the listing agent, they may be only too happy to sign you up as a client, but if they sell you one of their listings, they will be put into a position called “dual agency” where they must simultaneously represent both you and the seller of the property at the same time. There is nothing illegal about such a situation, and while you can still do a transaction under these circumstances, we far prefer to represent only one side of a transaction at a time, so there are not even any questions about a possible conflict of interest. This is important not only when negotiating the purchase price, but on other issues such as the decision whether to use a home inspector recommended by your agent – can they be trusted to do a thorough job? Or are they just there to avoid messing up a deal? These questions are a lot easier to answer when the agent is representing exclusively you.

The Inspection and Financing Contingencies

As a first-time homebuyer, you should NEVER sign a purchase offer without these two contingencies in place in the contract. Then write the dates on a calendar and make sure you have your inspections and financing lined up well before the contingency periods lapse. These contingencies allow you, in effect, a “free look” at the property. In other words, during the contingency period, you will be allowed to make your inspection, get your loan, and to decide whether to continue with the purchase of the property. While we don’t advocate making an offer on a property that you don’t intend to follow through with, many things can happen between the offer and the end of the contingency period: you need to know that you can “exercise” the contingency and pull out of the deal without losing your “earnest money” deposit. Read your contract carefully to find out – if there is any doubt in your mind, ask your agent and/or your attorney for clarification.

Down Payments

How much cold, hard cash do you have? Did you know that there are FHA loans available where your down payment is as little as 3.5%? While the “traditional” down payment is 20% (which will usually qualify for the lowest interest rates), you may choose to go with a lower down payment in order to keep as much cash in your pocket as possible – cash you might need down the road to fix the property, or to weather a personal financial crisis.

General First Time Buyers’ Resources

Top Ten Mistakes First Time Homebuyers Make (SmartMoney)
Top Things to Know [For First Time Homebuyers] (CNNMoney)
Homebuying Assistance Programs (Southland Regional Association of Realtors)

Government Assistance (Mostly For Low or Moderate Income Buyers)

Federal: There is a first-time homebuyer tax credit available that, depending on your circumstances, may be worth up to $8,000 if you qualify.

California: You may be able to get a loan of up to 3% of the property cost under the CalHFA program.

City of Los Angeles. Check their website for the latest on city programs for low income buyers. Remember that the City of Los Angeles is huge – and covers most of the San Fernando Valley.