So, you are ready to buy your first home in Litchfield County, you have been approved for a mortgage, music to your ears! Because the amount is at the lower end of the scale it will take a bit more… fortitude… and patience.
If you are in the “upper tier” of the first time home buyer, you will have a much easier time to find a home. I always tell my first time home buyers that a wish list is wonderful, but reality is you probably will have to scale back on your must have list. Save up and renovate to your liking later if you must! There are some great resale homes on the market that are in good shape and are reasonably priced for those that can afford them.
It can take time to find the right house. It all has to fall into place. When finances are limited the homes available for you to buy can be limited also. And you don’t want to find yourself “house poor” right out of the starting gate!
Usually the lowest priced homes fall into 3 categories. Foreclosures, homes in estates (homes where the home owner has passed away), and lastly, some short sales. At least in the areas I cover these are the types of homes many of my first time home buyers are looking at because funds are limited. And yes, sometimes the perfect house at the perfect price is a straight resale, the current owner wants to sell and prices it accordingly. Will wonders never cease!
Foreclosures. Remember, most foreclosures that are at the lower end of the pricing scale probably need tons of work. And many are not mortgageable! Even though lenders own them, lenders are selling them, they won’t lend money to a buyer to purchase the house. Forget those homes, cross them right off your list! Most of the lowest priced foreclosures go to investors that pay cash for them. But there are those that work for a first time home buyer, some foreclosures qualify for incentive programs from the lenders.
In this area most homes have septic systems and wells, very few have public water and sewer available. And honestly, testing a septic system on a house that has been vacant for so long is about as useful as a screen door on a submarine! There are certain things that can be looked at by a professional, and should be, but the overall inspection may not reveal that the system has failed. This should be of grave concern to a first time home buyer. I have found that some (a few) lenders have realized that if the septic system failed, if the oil tank is still in the ground, they should address these issues. Some will, some won’t, it’s a toss up.
Estates. Many times homes that are in estates have their own sets of issues. If the home hasn’t been maintained and there is no money in the estate to repair any damages, they may issue credits for the issues. Usually you are dealing with family opinions about what the house is worth, and this can hinder the negotiating process somewhat. Again, the septic and well issue will come into play if the house has been vacant for an extended period of time.
Short Sales. As long as you have the time to wait for an answer from the lender short sales can be another alternative. So, if you have only 3 months to find a home and move in, this may not be the best option for you. Another important thing to remember is that if there are issues that arise from inspections the owner does not usually have the resources to address them. Sometimes the lender will kick in the money, if they understand this is as good as it gets. And one more time, some short sales are vacant, you must consider the septic and well issue. (Sorry to go on and on about that.)
My biggest concern for the first time home buyer is the condition of the septic and the well, you may have understood that already though. Septic and well repairs and or replacements can be very, very costly indeed.
When looking at homes in the lower price range you may want to check into what is known as a 203K Rehab loan. With these loans, your lender will loan you money to actually make the repairs. There is a catch, you cannot do the work yourself, it is not a sweat equity loan. You have to give estimates, you have to use licensed people, you have to provide proof the work was done, and most important, you have to make sure it was done! Ask your mortgage person about the options available to you with these types of loans and if they are a good fit for you.
There are many excellent mortgage programs out there for first time home buyers, just ask! There are programs for down payment assistance, programs for rehab, FHA loans, CHFA, USDA, Housing Development Fund, on and on. Sometimes the house will determine the mortgage you need. I do have names of excellent mortgage professionals, give me a call, send me an email and we can talk about it.
Patience and fortitude, that is what you need to have. If your offers are quite a bit lower than the asking price it can really take time. You can end up putting in quite a few offers before you find one that sticks!
Swiedler & Adams, we assist buyers and sellers in New Milford, Brookfield, Sherman, Roxbury, Bridgewater, Kent, Warren, Washington, Morris, Bethlehem, Litchfield, Goshen, Woodbury, Cornwall, West Cornwall, Cornwall Bridge, Connecticut.