Shante Thompson had a heck of a time trying to buy a house. The Randallstown native spent 18 months talking to real estate agents, shoring up her financial profile, touring neighborhoods and making offers.
By the time Thompson, 32, settled on a three-bedroom townhouse for $185,000 in Windsor Mill in August, she was just as relieved as she was excited to be buying her first home.
The homebuying process drained her - and taught her a few lessons.
By the end of it, "I had to be more aggressive," she said. And "I lowered my expectations in what I was looking for."
Like Thompson, many would-be homeowners feel under-prepared, under-financed and overwhelmed. With housing prices in the Baltimore area rising at a double-digit pace (the average now exceeds $300,000), many are struggling to find houses they can afford.
But even in the hot seller's market, experts say, many first-time buyers can find a suitable home if they are persistent, organized and patient, and take advantage of programs available to help them.
"There's a lot of people around that don't realize they can own a house," said Irene Mabry-Moses, of Faith Realty in Parkville. To get one, "buyers should be careful and they should take their time."
Exercising caution and patience are paramount, but that can be particularly hard for first-time buyers, who often find the quest for a home to be an emotional roller coaster.
On top of that, they face major hurdles, according to many experts - coming up with enough money up front and figuring out which mortgage loans would be most beneficial for them.
"The affordability of housing in this area is not so great," said Jason Abell, a local lender with Wells Fargo & Co. And, in general, "with first-time buyers, there is some hand-holding that needs to go on that doesn't happen with other buyers."
Joe and Sally Maybury learned that firsthand when they set out to buy in Howard County after she switched jobs in July. With the average sale price more than $400,000, the county is particularly challenging.
The Mayburys signed up for a county class for first-time homebuyers, where they met their future Realtor and lender. The class also helped them to find a financing option that enabled them to buy a single-family home in Elkridge for $362,000 - a step up from the townhouse they initially thought would be all they could afford.
"We were unsure of what we could or couldn't do," Joe Maybury said, "so we took the mortgage seminar."
A conventional 20 percent down payment would have meant $72,400 in cash, and a low down payment usually requires costly private mortgage insurance. The solution for the Mayburys was a conventional fixed-rate mortgage that covered 80 percent of the house's cost coupled with a "piggyback" 10-year adjustable-rate loan to cover the remainder. That meant they didn't have to come up with any cash for a down payment or buy mortgage insurance, though they did pay about $10,000 in closing costs.
"We had money down that we could have thrown out there but because we took the mortgage class, we were told upfront it's not always wise to put money down," said Joe Maybury, a 28-year-old financial analyst. "We're young people. We don't have a lot of money. We didn't want to put all of our money up right away."
They were immediately glad they hung on to their cash because they ended up replacing the heating system and several appliances in the seven-year-old home.
The lesson for Joe Maybury was "not to throw all of your eggs down on the first shot. You've got to save money for the unknown, at least for the first year."
Research and patience were keys for Stephen Brvenik, 22, who scoured the Internet to learn about home prices, Realtors, lenders and mortgages.
Brvenik then targeted his search to specific areas of Baltimore and determined how much money he'd need.
"A big part of the homebuying process is looking online, first of all," said Brvenik, who recently bought a two-bedroom townhouse near Patterson Park for $235,000.
Brvenik, a leasing agent for Prime Retail Inc. in Baltimore, also relied on an experienced real estate agent and had his parents recommend a lender, which expedited the process, he said.
Brvenik also invested time and shoe leather. He spent about a month looking at dozens of houses, touring many of them with Kevin Willner, a Long & Foster Realtor, nearly every day after work and on weekends.
Brvenik eventually zeroed in on the Patterson Park area in part because he believes values there will keep rising. That's important, he said, because that first house will eventually provide the equity for moving up.
"You should be very cautious about where you're buying," Brvenik said. "It's a huge investment. It's a lot of money,"
Indeed, those six-digit price tags can be intimidating to young people, whose largest costs are often triple-digit student and car loan payments. Figuring out how much you can afford ahead of time can be key to not getting thrown off course by prices that seem to vault upward overnight.
That's what Ryan Warfel and his fiancee, Angela Speck, did before settling on a three-bedroom Middle River townhouse.
Warfel and Speck heard about the Miramar Landing development being built there and contacted the builder, Ryland Homes. Before they decided to purchase one of the Miramar homes, they thoroughly reviewed their finances.
"It just made things much easier because we knew what we could budget," said Warfel, a 24-year-old Baltimore County teacher.
It also helped settle Warfel's nerves when he signed the contract for the $270,000 home.
"We knew, 'OK, we're going to be able to afford this home because we did our research,'" he said.
The Warfels ended up with the first home they saw - unusual for first-time buyers, who often find themselves outbid by better-heeled investors and homeowners with a stash of equity. Thompson, for example, lost out on several homes and changed her strategy as a result.
"I was conservative at first," Thompson said. "But when it got down the line, I went over and beyond the asking price."
Thompson regrets her initial stubbornness. She ended up paying more for the same-caliber house because prices surged during the 18 months she was looking.
She also had to temper her expectations regarding the condition of the house she wanted.
"I was trying to look for a house that you would have to do nothing to," she said. "But I settled for something that you would need minor adjustments to."
Finally, after looking at more than 70 houses, Thompson got a call from her Realtor, Joe Deaner of the Pat Hiban Group, one night after work in late July. The Windsor Mill townhouse was hers, at a cost of $185,000, Deaner said.
Thompson, a correctional programs specialist, was thrilled.
"I was screaming," said Thompson, who moved in in September. "I didn't believe it."
Help for first-time buyers: Classes and seminars
Live Baltimore plans to offer classes in the spring. Also check the Incentive Programs link on its Web site. Visit www.livebaltimore.com or call 410-637-3750 for more information.
Tri-Churches Housing Inc. offers comprehensive three-class homebuying seminars. The next series of classes is scheduled for Nov. 3, 10 and 17. Call 410-385-1463 or e-mail email@example.com for more information.
The Baltimore Urban League offers classes on the third Wednesday of every month at 6 p.m. Call 410-523-8150 or log on to firstname.lastname@example.org for more information.
Garwyn Oaks Housing Resource Center sponsors periodic workshops. The next is scheduled for Nov. 12. Call 410-947-0084.
Several programs are available to help first-time buyers get a house, from federal, state and Baltimore sources. They include:
The state's Downpayment and Settlement Expense Loan Program, which helps cover settlement expenses. Contact the state's Department of Housing and Community Development at 410-514- 7530 or visit www.dhcd.state.md.us.
City Employee Homeownership Program (Baltimore), which helps city employees buy homes in Baltimore. Call 410-396-3124 for more information.
American Dream Downpayment Initiative, which provides $3,000 to help cover the closing costs and down payment. Call 410-396- 4160 for an application or more information.
The Department of Housing and Urban Development (HUD) offers grants for first-time buyers through such initiatives as the Officer and Teacher Next Door programs.
HUD also offers the FHA's 203(b) Mortgage Insurance program, which provides mortgage insurance for buyers who meet certain FHA qualifications.
Fannie Mae and Freddie Mac offer extensive information on their Web sites, www.fha.com and www. Freddiemac.com. The Fannie Mae Foundation provides four homebuying guides online at www.homebuyingguide.org.
The Office of Federal Housing Enterprise Oversight's House Price Calculator is available at www.ofheo.gov/Landing.asp.
RealEstate.com (www.realestate.com) offers a Home Price Check, along with other resources helpful for first-time buyers.
Many banks and mortgage companies such as National City, Wells Fargo and Quicken Loans have extensive information and calculators on their Web sites.