First Time Buyers Guide

Buying your first home can be an exciting and also somewhat daunting experience.  Finding the right Realtor to help guide you along the process is an important first step.  The agents at Ski Home Realty are experienced, qualified and ready to work for you.

Below are some key points the Ski Home Team suggests you think about as you begin your journey to home ownership.

Search Parameters

When contacting your Ski Home Realty Realtor to set up property showings, it is good to have a list of important criteria to help narrow the search to properties that might interest you.  It helps to begin by making a list of search parameters that are important to you (and your family) in the home that you intend to purchase. 

 A good starting point is to define:

  • Price range (getting a preapproval letter from a bank or local mortgage broker is helpful to determine what you can afford)
  • Location (ie. town, neighborhood, development)
  • Size (minimum and maximum number of bedrooms & bathrooms)
  • Condition (new, updated, fixer-upper, etc.)
  • any additional criteria ie: garage, acreage, views etc. that are important to you.

Showings

Your Realtor can send you email listings to consider.  Take a good look at the pictures, note taxes and association fees (if  any), and ask your Realtor any questions that you might have as you examine each listing.  Its a good idea to limit the amount of homes you see on any given day to 4-6 at a maximum. If you see too many at one time, it is easy to get overwhelmed and hard to remember the details of any particular property. You might want to jot down notes, and if the Realtor gives permission to take some photos to help you remember each house. 

Making an Offer

Once you've found the home that's right for you, the next step is making an offer.  Some offers are made verbally and some in writing with a contract deposit.  In today's market, there may be some room to negotiate from the listing price.  When presenting an offer its important to list the contingencies that are going to be part of any written contract.  We strongly recommend a Home Inspection of the property is done by a qualified Home Inspector.  Often, a financing contingency will also be included in an offer to purchase.  When purchasing a condominium or townhome or a property managed by an association, you'll also have a Common Interest Addendum, which requires disclosure of all things related to common property managed by the association.  Discuss with your Realtor a reasonable timeframe to complete the purchase process, which may take up to 60 days if financing is involved.  You'll need to have a local (VT) attorney for the closing, and some purchasers ask their attorneys to review the purchase and sale contract before the written offer is made to the sellers.

Vermont Transfer Tax

Purchasers pay a Vermont Transfer Tax of 1.25% of the sale price of the real estate. There are 2 instances where the transfer tax can be less:

  1. When the property that is purchased will be used by the purchaser as a primary residence, the transfer tax is .5% on the first $100,000.  The higher rate applies for the portion of the purchase price above $100,000.
  2. When the property that is purchased is enrolled in the state's current use program (agriculture, forest land or a working farm).  For more information on the current use program click here Vermont's Current Use Program:   

Exemptions to the transfer tax include, but are not limited to a transfer directly to a creditor to secure a debt; a transfer without payment between a husband and wife, parent and child, grandparent and grandchild, or partners in a civil union; and transfers to a corporation, partnership or LLC at the time of formation, if no gain or loss is recognized under the the federal tax.

First Time Homebuyer Credit

Currently there is a lot of press, with good reason, on the First Time Homebuyer Credit.

  • Homebuyers who purchased a home in 2010 may be able to take advantage of the first-time homebuyer credit. The credit applies to eligible first time homebuyer  (buyer who has not owned a primary residence during the three years up to the date of purchase) taxpayers who buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010
  • The maximum credit amount remains at $8,000 for a first-time homebuyer.
  • Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.
  • Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
  • For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns.
  • The full credit will be available to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.
  • Dependents are not eligible to claim the credit.
  • No credit is available if the purchase price of a home is more than $800,000. 
  • A purchaser must be at least 18 years of age on the date of purchase.
  • Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit. An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and settle on the purchase by June 30, 2011.

There are many facets to the homebuying process and questions will arise throughout each step.  Your Ski Home Realty Agent can help answer your questions and guide you smootly through the selection and purchasing process.  We're here to make your first real estate transaction a successful and rewarding one.  For more valuable information, give us a call today!