Special to South Valley Newspapers
For Realtor Mickey Satterwhite, working with
first-time home buyers means lower commissions but higher satisfaction.
"I don't worry a lot about the money I earn on a transaction," Satterwhite said. "I'm trying to build a long-term business."
Satterwhite is a real estate agent with Intero Real Estate Services in Gilroy who conducts frequent home buying seminars for renters who want to become homeowners.
"What I do in the home buying seminar is try to educate them, especially from a financial standpoint, so they don't get in over their heads," Satterwhite said.
Satterwhite, who sells homes throughout Santa Clara and San Benito counties, also tries to destroy myths that scare many renters away from trying to buy their first home.
"Typical misconceptions include fear of the process and fear of making a financial commitment," Satterwhite said.
First-time home buyer Heather Alesworth, of Morgan Hill, who bought her first home in December with her husband, Ron, said fear of the unknown kept them renters longer than necessary.
"We talked about buying a house but hesitated, probably a year longer than we needed to because of fear," Alesworth said. "Not knowing anything about real estate is very scary."
During his seminars, Satterwhite helps home buyers weigh the advantages of home ownership (tax deductions, building wealth, control over your home, security) against the ease of moving that renters enjoy.
Alesworth actually is looking forward to tax filing season because of the tax benefits home ownership offers.
"We're definitely looking forward to the tax break," Alesworth said. "We'll see a significant tax deduction and a large refund next year."
During his seminars, Satterwhite also spells out the multi-step process of buying a home and gives an overview of the many ways available to finance a home.
When working with first-time home buyers one-on-one, Satterwhite follows a four-step plan.
First, he talks with new clients to find out what they need in a home and how long they plan to stay.
Then he asks all the adults and teenagers in the family to complete a checklist of typical home features, ranking them from one (most important) to 10 (least important). Items of the checklist include commute time, schools, condition, number of bedrooms, closet space and more.
It can be an eye-opening experience for many families.
"A lot of times, they haven't even talked about it," Satterwhite said, noting that some clients find they're so far apart on what kind of home they need that they stop the process for a while.
Once the clients have narrowed their checklist, Satterwhite refers them to a loan agent to get prequalified for a mortgage. This lets clients know what price range of homes they should visit and allows them to act quickly when they find the right house.
Typically, South Valley first-time home buyers are looking for a house in the $350,000 to $400,000 range, Satterwhite said. In this area, that often means purchasing a condominium or a townhome, he said.
Getting pre-qualified for a mortgage is a smart strategy for first-time home buyers, said Rose Martinez, a home mortgage consultant with Wells Fargo Home Mortgage in Morgan Hill.
"It's important, if you're in that price range, to get pre-approved because those houses are going to go fast," Martinez advised. "They're not going to wait."
"Getting pre-qualified is an excellent idea," Alesworth said. "It gives you an idea of what you can afford so you're not out window shopping for homes you can't afford."
The last step is the most fun – usually – looking for a home.
"Everyone wants the big house on top of hill, but no one can buy that just breaking into the real estate market," Satterwhite said. "I tell them to buy something more modest, let it appreciate and trade up."
The Alesworths agreed on a list of must-haves: a single-family home with a yard and a garage in move-in condition.
"It's important to determine what are factors you have to have," she said. "We had to have a yard because we have two dogs. We had to have a garage."
They were able to purchase a single-family home in Morgan Hill that met their requirements, for now. However, with a baby on the way, they know that depending on the ultimate size of their family, they may need to find a bigger home in the next five to 10 years.
When Satterwhite works with clients who eventually want to purchase a fancier home, he looks for properties that will help them achieve that goal.
"I keep an eye on where they need to go," Satterwhite said. "You look for properties that will give good resale value."
Satterwhite also looks at the houses he shows first-time home buyers from a different perspective than they usually do.
"I look at it from a technical standpoint – cracks in the walls, for example – while they look at it for livability," Satterwhite said.
Alesworth advises first-time home buyers to assemble a real estate and loan agent team in which they have confidence.
"Definitely find people you are comfortable with and who take the time to answer all your questions," she said.
Although the houses cost less and his commissions are lower, Satterwhite takes special satisfaction from helping renters become buyers.
"There's an energy with a first-time home buyer. There's an excitement," he said. "If I do it right, I've got a loyal client who will hopefully refer me to friends."