Dale Robyn SeigelThe deals are enticing for first-time home buyers and glimpses of recovery add a dose of urgency, but now may not be the right time for newbies to get into the market, according to attorney and real estate broker Dale Robyn Siegel.

Siegel, whose new book, The New Rules for Mortgages, expands on this premise, warned that the burst real estate bubble has left more than wet suds in its wake. Home buyers with limited credit will find their interest and down payments higher and their access to second loans to help with the down payment virtually nil.

To complicate matters, changes are being contemplated in FHA assistance, she said, including a possible increase in required down payment to 5% and a decrease in the allowed seller concession to the buyer from 6% to 3%.

"There are some great deals out there, if the time is right for you personally to buy a house, then it's a great time for you to buy one," Siegel told WalletPop. "if you're pushing it, saying I'm really not financially ready, should you jump in now just because you can get a discount? The answer is: you'd better think about it."

Research on comparable prices is more important than ever because appraisals are coming in low in many regions of the country, she said. (It's also easier than ever because of Internet access to the MLS.)

With home prices fluctuating greatly, Siegel advises house shoppers to look not just at what has sold recently, but what has been taken off the market because it did not sell. If you do make an offer, make sure the contract allows you to get out of the deal, or negotiate to pay less, if the appraisal does not match your offer.

Siegel's top advice to first-time buyers is to take a deep breath and consider some basics:

  • Price out the future cost of your home, adding 5% a year. Can you still afford it?
  • Be careful where you get your funding, mindful of recent history. Read a book, take a class, then ask a lot of questions before you sign.
  • Don't just pre-qualify for a loan, but also line up an insurance agent and home inspector so that once you find a home, you can continue to focus on the home purchase details.
  • Think of a mortgage broker as your Sherpa, she said, but not your clone.
"First-time home buyers need a lot of hand-holding, but they can't just say, 'I'm busy at work; you handle it," she said. "That time is gone."


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