First home, first remodel

Our guide to buying and fixing up a starter house

The four cornerstones of a successfulfirst-home quest are working with a trustworthy agent, securing your financing, setting realistic goals, and becoming very detail oriented. That last point is especially important, and so is plain old patience. As the photographs on these pages show, it all begins at the Sunday open house.

1 Find the right agent
Many of the buyers we interviewed found their real estate agents by getting recommendations from friends. But if you don't know whom to consult for a referral, experts suggest the following strategies.

INTERVIEW AT OPEN HOUSES. Steve Goddard, a longtime broker at RE/MAX Beach Cities Realty in Manhattan Beach, California, says going to open houses gives you a chance to informally interview agents. "You will be able to meet agents face-to-face and set up a meeting if you like them," Goddard says. His key advice: "Make sure they are good listeners. If they don't listen to you, they won't be able to determine what kind of house you want."

SURF THE WEB. "Almost half of the first-time home buyers I get come to me after checking out my site on the Internet," Goddard says. The website for the National Association of Realtors (www.realtor.org) can help you start the search.

GO WITH SOMEONE YOU TRUST. Paul Calver, an associate broker with Seattle's Lake & Company Real Estate, says an agent's trustworthiness is as important as years of experience. "When you sit down with potential agents and ask questions, determine whether you feel comfortable with them," Calver says. "This is a person who is going to be privy to your financial information and helping you find the place you will live. If you can't trust them, it's going to be a long, hard process."

2 Secure financing
Once you locate a suitable agent, line up your financing. Your agent should be able to direct you to a lender who can preapprove a loan. "You want to know how much you can afford," Goddard says. "And once you start looking at houses, you will want a prequalification letter. That way, the seller's agent will know you are serious buyers and that you (probably) will be approved for a loan."

There are several steps to take when getting ready to apply for a loan.

PAY OFF AS MUCH DEBT AS POSSIBLE. When your loan application is being evaluated, your income is weighed against your debt. In general, less debt equals a larger loan.

GET RID OF SOME CREDIT CARDS. "A lot of people have credit cards open at department stores that they don't need," says real estate broker Alanna Kimmel of Kimmel & Company in Denver. "This can have a negative impact on your credit rating."

GATHER PAY STUBS, BANK STATEMENTS, AND TAX FORMS. You will need documentation of income, savings, and work history.

CREATE A CREDIT HISTORY. If you've never had a credit card, pull together items that show a history of consistent payment for rent or utilities.

 

3 Set realistic goals
The first hurdle first-time home buyers encounter is often in their own heads: unrealistic expectations. "They come in with a list of everything they want and communities where they want to live. Then they come up against money limitations," says Gail Lyons, a broker with Boulder Real Estate Services/Realty Executives in Colorado.

MAKE LISTS. To help his new clients thin housing prospects, Calver advises them to make two lists: what they must have and what they'd like to have (but can live without). From these lists, he helps clients establish priorities. "At any given time, there are thousands of houses on the market," Calver says. "But when you look at amenities and location and compare that to how much you have to spend, that narrows the field considerably."

DECIDE HOW MUCH REMODEL AND REPAIR WORK YOU ARE WILLING TO DO. "A lot of first-timers tell me they want a 'fixer' home because they think those will cost less," Goddard says. "But a lot of young working people don't have the time, experience, or money to take on a major renovation. What they mean is something that needs new paint or carpet."

TAKE COMMUNITIES FOR A TEST-DRIVE. Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, California, advises his first-time clients to research communities on the Internet by looking up school and crime statistics (see page 163), but cautions that there's no substitute for firsthand experience. "I tell them to go to communities they are interested in and walk around and have dinner," he says. "Pick up a community paper and go to a few of the events they list and talk to people in the area."

4 Sweat the details
Before Calver got into selling real estate, he worked in construction. When advising clients, he draws from this experience. He says buyers should carefully read the seller's disclosure packet and use it as a guideline for inspection. It is important that buyers evaluate potential homes with the eyes of an inspector.

CHECK FOR A FIRM FOUNDATION. "The foundation might not be visible to the naked eye," Calver says. "Look at the doorways. Is the door square with the jamb?" If it isn't, there could be foundation problems ― or it could simply be an older house showing its age. A sloping floor might also indicate trouble.

LOOK AT ROOF AND CEILING. Wavy, cupped shingles can indicate a roof whose life is almost over. Calver also explains that a house with a roof that has missing shingles or a lot of moss growing on it can be a red flag and cause for a careful inspection. "If you look at the ceiling and see water stains, you know there's been a problem with leaking in the past," Calver says. "You want to make sure that's fixed."

HIRE AN INSPECTOR BEFORE YOU BUY. "You want to go into a purchase with your eyes wide-open, knowing exactly what's going to have to be done to the house," says Calver.

Hot communities for the first-time home buyer
We asked real estate agents in the West to identify areas where affordable homes and good quality of life still go hand in hand

STARTER PRICES BY CITY
Cheyenne, WY $90,000
Mesa, AZ $95,000-$140,000
Albuquerque $100,000-$150,000
Billings, MT $110,000-$125,000
Boise $110,000-$140,000
Beaverton, OR $150,000
Longmont, CO $150,000
Henderson, NV $150,000-$160,000
West Jordan, UT $160,000
Edmonds, WA low $200,000s