How do First-time Homebuyers Succeed in this Market?

Question: How are first-time homebuyers successfully entering our competitive market with low inventory?

Answer: The keyword from that question is successfully. Now more than ever, first-time buyers need to engage with a comprehensive and experienced team of experts to successfully access the D.C. area’s competitive real estate market. It is only a comprehensive approach that will ultimately leave the buyer (now homeowner!) pleased with their acquisition.

When working with first-time buyers I always quantify the subjective and objective aspects of the home buying process. Going to open houses (remember those?) and previewing homes in person or online is the “fun” and subjective part of this process — dreaming of hosting dinner parties with friends, backyard BBQs, the wall placement of a cherished piece of artwork, walking the dog to the dog park just around the corner, or strolling on a crisp fall morning to pick-up vegetables from a farmer’s market. That’s the fun stuff!

The objective nuts and bolts of the transaction — the contract strategy and negotiation, home inspections, mortgage application and underwriting processes — are far less glamorous but equally important to a successful acquisition. The subjective choices may rest primarily with the buyers, but the majority of the objective expertise will come from the experience of the real estate expert.

Our real estate market consists not only of the homes available for purchase, but also the lenders, settlement agents, home inspectors and real estate professionals that make acquisitions possible. When working with first-time buyers, it is imperative that I help them navigate the process by pointing out the potential issues, situations and problems they may encounter. The potential issues are numerous.

Our mortgage lending guidelines change every day and our buyers not only need to be aware of these changes but also need to be working with a trusted experienced lender. Appraisal guidelines are not the same as they were four months ago and are almost certain to change again before summer is over. Additionally, understanding a home inspection might be a hurdle for a first-time buyer. Home inspections often identify issues with properties that are unforeseen, but almost never unique.

Helping buyers understand that what they perceive as a problem in the inspection report, is oftentimes a situation that I have experienced and successfully navigated many times in the past, giving buyers a high level of confidence and comfort. And while it would be impossible to predict every possible issue, discussing in advance the potential or likely situations that may arise leads to fewer surprises and less stress in the transaction.

But before any of this can happen, the buyers must actually be under contract to purchase a home! How do first-time buyers differentiate their offer to purchase from all the other offers when the seller is going to receive multiple offers? Crafting a contract offer that both recognizes the needs and preferences of the seller and the uniqueness of the property and its value will help the offer rise to the top.

This is where most first-time buyers, who assume the contract negotiating process is primarily about the sales price, need the most guidance. The phrase that “the devil is in the details” is very applicable — more contract offers are dismissed by sellers because of the smaller, perhaps less-significant terms in the contract than on the sales price offered on the front page of the contract itself.

The single best piece of advice I can offer a first-time buyer is to find an experienced, local real estate agent with whom they are comfortable, sit down with them for an hour over a cup of coffee and discuss the entire acquisition process. Address the objective nature of the process and then move on to the fun.

George Myers is a lifelong Alexandria native and a licensed real estate agent with McEnearney Associates, Inc. in Old Town Alexandria, VA. George is a calm, low-pressure agent who listens and keenly observes in order to confidently navigate each clients’ uniquely personal decision to buy or sell. Contact George at 703-585-8301 or GMyers@McEnearney.com to learn more.