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Home Buying Information - Tips and Suggestions
 
Ready to Buy? A Few Suggestions:

Buyer Advisory Document - You gotta read it.

It can save you time, money, and spare you of needless frustration when buying a home. (You'll need Adobe Acrobat Reader to view the document - available as a free download on the page linked above)

Think About What You Want (and Need!) in a House
Before you even talk to a real estate professional it is best to make a short list of what you definitely need in a home, what you would like, as well as what you don't want. It may seem unnecessary, but write these things down. Psychologists will tell you that anything written becomes more powerful and easier to remember. It will also help you to think past the basics like number of bedrooms, baths, what size of yard, and whether you would be willing to buy a fixer-upper. Write down everything that is important to you, a good place to start is by listing the things that you like and dislike about where you are currently living.

This will help you in a couple of ways. First, if you are working with a real estate agent, it will help him or her find houses to show you which more closely match your wishes which saves you time. Secondly, it will help you prioritize what is most important to you. If you rank closet space as an absolute must have, making a mental note of that before looking at houses might help keep you from getting carried away and making an offer on a cute home with minimal space in that area. While it may not seem important while you gaze at your cozy cottage, within a few months you may regret your decision.

When making your wish list, remember that compromise may be inevitable. You may find that some of your home wants and needs have to be negotiable based on what is available in your area and price range, but setting priorities will help you find the right house to suit your needs down the line. Keep in mind what you can live with and without, as well as what can easily be modified. It is easy to add a fresh coat of paint or new carpet to your home but much more difficult and costly to add a second bathroom, make changes to the floor plan or modify other structural considerations.

Take Your Time
When looking for a home it is important to remember to allot enough time for your search. You are more likely to be able to find your perfect home if you do not wait until a month before you have to move. It is a big investment, and it needs and deserves time.

Would you buy a new car without comparing similarly priced models? Probably not, therefore, it is a good idea to look at several houses in your prospective area rather than rushing to make an offer (but if you are lucky enough to find the perfect home on your first or second try, don't ignore your good fortune). Not only will looking around help you know what to expect in your price range, it will also help you get better at gauging different homes' values. Don't just compare asking prices though, find out what the other homes actually sold for as this may be significantly lower or higher than the initial asking price.

Work With Professionals You Trust

Just as you don't want to let time constraints pressure you, you should work with a real estate agent with whom you feel comfortable. There are several things to look for in a good agent, including:
  • A Realtor who is knowledgeable about the area in which you want to purchase your home.
  • An agent who knows your timeline, isn't in too much of a hurry to get the deal done but is willing to devote the time to show you as many houses as you need to find the right one.
  • An agent who is good about showing you available homes within your stated price range. You may decide later to reconsider that price range based on what is available, but it should always be your decision.
  • A Realtor who shows you homes from a wide variety of sources, not limiting your search to just their listings.
  • An agent who is willing to offer you suggestions and referrals, but who encourages you to make your own choices. Most Realtors have people with whom they like to work and their recommendations can be valuable, but this is your home buying experience so listen to their advice but make the choices you are comfortable with.
To a great degree finding a Realtor with whom you feel confident will be a combination of many factors, many of which come down to personality. Buying a home is an important undertaking and finding the right Realtor is a great advantage.

Help Your Realtor Out

Realize that you will be the person most committed to finding your ideal home. For that reason, you may want to get more involved. Visit open houses, check out the classifieds, both off and on-line, on your own so that you can bring possible home suggestions to your real estate agent. Even if you don't find the perfect home this way, it will help them get a better idea of your tastes and needs.

Why Location Is So Important

Location is the one thing that you can never change about a house, and it has a great deal of impact on how much you will enjoy your home as well as future property and resale value. That is why, although overused, "location, location, location" is a catch phrase that you want to pay attention to. So what are some things that you might want to consider when judging a home's location value? Look for the obvious first, then do some extra checking.
  • How are the homes in the neighborhood kept up?
  • Are their lawns well taken care of?
  • Are there many rental homes in the neighborhood? Generally speaking a neighborhood with more owner-occupied homes will value higher than one with many rental homes.
  • How good is the school system? Even if you do not have children of your own, this may be an important factor should you choose to resell your home in the future.
  • Check out crime rates with the local police department or on the Internet.
  • Get listings of other homes for sale or recently sold in the neighborhood. Check out how long they were or have been on the market. This will give you an idea of how hot a neighborhood is compared with other areas or may alert you to an underlying problem.
  • Signs of restoration or remodeling are a good thing. This shows that the people living there like the area well enough to invest in staying, rather than moving away. It may also lead to increased home values for the neighborhood.
  • Visit areas that you are considering during different times of day. You will want to know if that quiet little neighborhood you love in the morning becomes party central on the weekend, whether your new neighbors have dogs which bark through the night, and what the area's traffic is like during rush hour.
  • If buying in a new subdivision, you should investigate what is being built around you in the future. Do not blindly trust what the builder's salespeople tell you. Instead find out from the city or county zoning and/or planning authorities.
  • Learn about any Home Owners Association governing the neighborhood. Ask about the dues as well as any covenants that you will be expected to follow.
Another factor to consider about location is how your home fits with the surrounding homes in the area, since they are going to most closely affect your home's value. If you buy the most expensive house on the block, your value is going to be lowered by the surrounding homes. Buying a lower valued home, or even a fixer-upper (as long as you are prepared for and know how much work and cost will be involved) in a higher priced neighborhood may be a better financial decision--as your home's value will be buoyed by the surrounding homes.

Knowing Your Market

Just as a home's value is going to be effected by its location, the price that it is actually going to be able to be bought and sold for will be, in part, determined by current market conditions. Therefore, it is important for you to understand what kind of a market you are in when it comes time to make an offer. There are two types of home markets, a sellers' market and a buyers' market. Which one is currently in force helps determine who has an advantage.

In a sellers' market, demand is outpacing supply and sellers may be receiving multiple offers on a limited number of listings. Houses sell very quickly, sometimes just days after listing in a really hot market or area, and most often sell for the list price or even more. In a buyers' market, houses stay listed longer before selling and you usually have more room to negotiate. There are, of course, different degrees of both and, often, seasonal shifts. Even a sellers' market slows down in the winter and a buyers' market picks up during the summer. During the off-season, there will be fewer available houses but less competition.

Even if you are in a sellers' market, know what the home is worth, what you are able and willing to pay, and try not to get caught up in a bidding war mentality which may leave you with an overpriced home or a mortgage payment which saps all of your extra cash. No matter how much you like a home, you will love it more if it is a wise and affordable investment.

A Home Inspection Is A Necessity

Just as you would not buy a new car without comparing different models, you would also want to test drive it before making a decision. But that is impossible to do with a new home, right? Well yes, but in the real estate market the next best thing is the home inspection.

A home inspection is probably the best investment you can make regarding a new home purchase. Do not pass it up, even if you are buying a newly built home. Make any offer contingent upon this home inspection. You should hire a home inspector who is experienced and knowledgeable about any special features the home may have, such as a swimming pool, security alarm system or state of the art wiring.

Your home inspector should be able to spot a home's problem areas before you buy. It is a good idea for you to be present during the home inspection, if possible, so the inspector can explain any problems and how serious they might be. This process may let you know whether you should buy the house, depending on how costly and expensive any necessary repairs might be, or more commonly they give you the chance to negotiate seller concessions, such as having a damaged roof fixed before the closing or giving you a repair allowance to take care of it after.

Don't Disclose Your Spending Cap

When you find the right house and are ready to make an offer, don't disclose how much you are willing to pay if offering less. The seller's agent, or listing agent, has a fiduciary responsibility to the seller, not to you, and must tell them--causing you to lose any bargaining power up front. Instead make your offer, but be quiet about how high you might go until the counteroffer negotiations are underway.

Get It In Writing

In real estate, there is an adage, "if it's not in writing, it wasn't said." It would be wonderful if we could trust everyone's word. But you don't want to find out after the sale that something was not fixed to specification or disclosed accurately. Having to hold a builder or previous owner to their verbal promise at that point can be very difficult and adds unneeded stress. Having all promises in writing is a necessary protection whether you are buying a new build or a resale home.

Conditional Loan Approval (CLA), Pre-Qualification or Pre-Approval

Another good item to have when you make an offer on a home is a CLA, pre-qualification or pre-approval for the mortgage, should your offer be accepted. Getting a pre-qualification is a shorter process which will let you know how much home you can afford and qualify for based on your income, credit history and current debts. Pre-approval is more extensive but is also a more effective bargaining tool. Letting the seller know that you already have your financing in place will almost always make your offer more attractive compared to one without ready financing, even if the other offer is higher. Seriously, have something ready when you make the offer or you may miss out on the home of your dreams!



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