15 Tips To Help You Buy Your Home
Thinking of buying another home or your first home? Here are some tips for maximizing the home buying experience. Detailed coverage of the topics below is provided in his website:
1. DON'T WAIT TO BUY
Prices are only going to go up. Don't be a victim of it. Better to have the escalator go up with you on it.
2. BE REALISTIC
If you were a seller, would you take a lot less for your home than it was worth? Unless there is some highly unusual circumstance, the seller's not going to either. Don’t waste your time making unrealistic offers and risk losing the property in the meantime.
3. ALWAYS BUY NEIGHBORHOOD
Property in good, quiet neighborhoods with solid school systems always appreciates well. Avoid proximity to business establishments, factories, areas with odors, railroad tracks, heavily traveled streets, noise, nearness to police and fire stations and being too close to schools. (Within walking distance of a school can be a plus.)
4. AVOID PROPERTY DETRIMENTS
Factors in the property itself can be problems later. Always buy as if you have to sell. Someday you'll have to -- often sooner than you think. Decreased demand due to any of these and other "turn offs" can mean a lower price when you sell: - small backyards - inadequate closet space - poor floor plan - tiny or outdated kitchen - fewer than three bedrooms or more than four (except for condominiums and retirement communities where two bedrooms are common) - inadequate number of bathrooms for the size of the home
5. USE A REAL ESTATE AGENT
Save time and avoid losing the best homes. Get recommendations and work only with one agent. When you "work with" a number of agents, you have "everyone" working with you (not in reality), but nobody working for you. The very best deals often go to an agent's best prospects. You'll be the first to know about fresh listings. When you call on an ad, the cream has often been skimmed already.
Work only with an experienced agent who qualifies you on the basis of your income and credit history. Avoid any agent who just pops you in a car and starts driving you around.
You should also feel a sense of progress. If what you're being shown is only what the agent wants to sell, instead of what you need, find another agent.
6. INSPECT THE PROPERTY
Look at properties during the day, and when "the neighborhood is at home", to observe any annoying situations: noisy or pesky neighbors, loud music playing, cars racing up and down the street and the like, and to be able to tactfully solicit information from neighbors about the property and the neighborhood. Make multiple visits to the area,in addition to touring the inside of the property several times. Take someone else with you on subsequent visits to get additional points of view, particularly those with real estate construction, electrical and plumbing experience. Don't waste time between visits. The clock is ticking. If you're interested,other buyers are probably going to be too.
Have a professional property inspection done by a certified property inspector. Get recommendations. Be very careful of any properties with environmental problems, particularly any involving underground oil tanks. The cost of environmental cleanups can be huge. Just because you are told that the property has a "tank policy" should not give you a false sense of security.
The purpose of a home inspection is to detect major problems, not to expect the seller to fix everything noted. Keep your eye on the ball. Staying reasonable facilitates matters all the way around.
Be sure to have the property under contract, making the sale contingent upon a satisfactory inspection. You don't want to lose a property while waiting for an inspection.
Always conduct a "walk through" or pre-settlement inspection of the property, personally, on the day of closing. The utilities must be left on to do it properly. Make sure the basement is dry, turn on both the heating and air conditioning no matter what time of year it is, open and close all windows and doors, check all stove burners, make sure all keys work and that there are keys for all doors, and ensure that the premises are reasonably clean and free of all the seller's personal effects. The time to discover problems is before closing or escrow, not afterwards. While it should not and may not happen this way, cooperation will very likely wane when sellers and agents have their money.
7. BEWARE OF HIDDEN DEFECTS
All sellers, and real estate licensees, are duty bound to reveal any hidden or latent defects in a property not observable by a reasonable inspection. Agents are required to conduct a visual inspection of the entire property when taking the listing. Dealing with agents gives you some added protection. Dealing directly with the owners doesn't.
8. CONSIDER A HOMEOWNER'S WARRANTY
The cost is modest, many items are covered (after a small deductible) and they usually provide one year coverage. Your agent can advise you how to obtain one.
9. NEGOTIATE TO WIN -- FOR REAL
When you find the home that ideally meets your needs, buy it. Even if you think it is slightly overpriced, pounce on it anyway before someone else does. In some areas, such as parts of Northern New Jersey, paying in excess of the listing price is often virtually standard procedure.
Don't let pride or ego get in the way of taking the long view. If the property is well located, you'll make up the "overpayment" quickly. Remember the "97% Rule". If you think a property is worth enough to pay 97% of the listing price, how can it be worth it to lose it for the last 3%?. Winning doesn't mean winning a negotiating battle of wits with the seller, it means getting the property that meet your needs that will provide you with a satisfying home and a solid profit later.
Time is always critical. There used to be a television show in the 1950's called "Dollar A Second". Host comedian Jan Murray would have a contestant perform stunts. As long as they did so successfully, they kept earning a dollar a second. But an outside event was always brewing, such as a staffer standing in Times Square until he saw ten Tennessee license plates or some similar gimmick. If the outside event siren blew before the contestant decided to quit, he lost everything. Some contestants did. Trying to get it all, they wound up with nothing. Similarly, other buyers can “come out of nowhere” anytime to make a property you have your heart set on disappear for good, even if there have been no offers yet, or for months. Ask any active agent.
When you find the right property, take immediate action or someone else may leave you empty-handed. If the home is desirable to you, it's going to be equally desirable to others. It should be your goal to have the seller execute a contract of sale as soon as possible, so you can be assured that the property is tied up. If another buyer comes to terms with the seller ("the outside event") before you do, you lose. Be flexible and get there first with the most.
10. DON'T GET COLD FEET
Buyers sometimes get "terminal terror" after they have made an offer to buy. Don't cancel out just because you're apprehensive. You'll only wind up paying more for less later. Get a hold of yourself and hang in there. Remember John Wayne's definition of courage: "Being afraid, but doing it anyway". If you've done your homework and are buying in a good area, you are very likely doing the right thing.
11. SHOP AROUND FOR FINANCING
Check your own bank, the Internet and the real estate agency's contacts. An experienced mortgage representative will help you find the right loan. Rates and terms vary, so look around. Always lock in a good interest rate.
Always tell the truth on the mortgage application. All relevant matters are verified. It's a violation of the law to lie on a mortgage application and it can foul up getting the loan as well.
12. BUY WHAT YOU CAN AFFORD
Your agent and mortgage representative will guide you. Don't underestimate what you can buy. Lenders aren't usually going to let you bite off more than you can chew. Relatively few loans go to foreclosure. Yours probably isn't going to be one of them.
13. CONSIDER FINANCING AS MUCH AS YOU CAN
If you're in a position to make a substantial down payment on a home, you may wonder whether to make a big down payment to keep your monthly payments smaller or to make a smaller down payment and finance more with resultant larger payments. Strictly from an investment point of view, you're probably better off most of the time financing as much as you can.
A smaller down payment allows you to control the same asset that a larger one would, so why put out more money than you have to? You also maximize your leverage, increasing your rate of return on your invested dollars. Over time, you are going to be paying the lender back in cheaper, inflation eroded dollars, while the asset you're holding will probably continue to increase in value, if you were careful about what and where you bought. Finally, you still have those excess uninvested dollars that you didn't tie up in your home for other investments, which could potentially yield higher rates of return and which would also be available for emergencies.
14. GET AN ATTORNEY
Obviously any inexperienced buyer should have one. Experienced ones should too. It is easy to delude yourself because you have some knowledge and experience, thinking you know all you need to know to protect yourself. As Thoreau noted: "I count some parts and say I know". Well you don't. Neither do I. Real estate transactions are far more complex than they used to be for a variety of reasons, and they are only going to get more involved. Look upon getting an experienced real estate attorney as an insurance policy to protect you.
15. WHAT ABOUT PROBLEMS?
Be guided by your attorney. A first step in resolving problems would be to contact your real estate agent, the office manager and the broker of record of the firm in that order. If the firm is a member of the Board of Realtors, they have arbitration panels that can help settle unresolved disputes. A written complaint can also be filed with your state's real estate commission or department if all else fails, or at any time. With your attorney’s direction, the same goes for filing a lawsuit in state or federal court, depending on what the problem is.
Enjoy your home. It will provide you with much happiness and the opportunity to build a solid financial future.
For a more detailed presentation of the tips provided here,and access to many home buying and home mortgage resources, visit:
Larry Danks is a Licensed Real Estate Broker and state approved Real Estate School Director and Instructor.
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