Advice for First Time Home Buyers, part II.

February 5, 8:29 PMBoston Residential Real Estate ExaminerArthur Kotsifas

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This is the second in a series for first-time buyers.

You've found the right house. Now, the hard part.

Congratulations first time buyer. You've finally found the house you really want to buy. You did your research, and picked your neighborhood. You've considered your time horizon, how much you can really afford, how big a home you want (vs what you need), and, you've worked out the numbers. Hopefully, you've had a Realtor working with you who has taken you to quite a few   homes before suggesting that you go forward.

Now, the hard part. The offer.

If you're like most people, negotiating for things, especially when big numbers are involved, is unnerving to say the least. In a case where you've found the "right" home, it's even worse, because you have an emotional attachment right out of the gate. Your spouse has already started thinking about the drapes, and that room you're looking at will fit your big-screen tv beautifully.

If you're working with a buyer agent, here's where he earns his money, and good move for choosing one. If nothing else, it can take a lot of the stress out of the negotiating process. If you aren't working with a buyer agent, any Realtor that you're working with has now become your adversary. The odds are pretty good now that the person who has been showing you homes, listening to your needs and wants, and making suggestions really does want to make you happy. However, this person is representing the seller of the home you're now ready to offer a large amount of money on. His job: get you to spend as much as possible, starting with as big an offer as possible. You're now quite possibly up against a professional negotiator. Here's some advice from someone who has been there quite a few times.

Remember: This home is an asset (although we can argue that another time, because assets should really make you money instead of costing you money). It's an item that has a certain value, determined by forces outside of your control. And although you may have decided that this is the right one for you, it doesn't make sense to overpay for it. If you allow yourself to spend more than you need to, it's your choice. But please, keep in mind these two rules:

1) There's always another house.
2) You have choices, and you can walk away.

How much is the house worth? That's an easy one. The house is worth whatever the market says it's worth. The value of the home isn't based on what the owner payed for it, what he still owes on it, or even what homes in the area are selling for (although this is one of the best possible indicators). The house is worth whatever someone will actually spend for it, and that depends on many factors, all of which you have really no control over.

You don't have to make an "aggressive" offer on a house if it doesn't make sense to you. You don't have to get into a bidding war with someone else who for some reason is also bidding "aggressively" on the same house. And, you can always, always, walk away. As hard as it is to believe it, there really is always another house.

I can talk on this for a long time, but if you can take the above to heart, you're in a much better place to make a smart decision. Take your time, get the numbers together, do your homework, and then act. It's your money.

Have a question on real estate? Ask the Realtor at Realtor1@MAresource.com