Even if it's not your first time buying a home, you should
familiarize yourself with the whole process. Unless you are an investor,
you probably don't do it to often.
Some things to consider when buying a home:
- Time
It can take time to find a great home. If you've only begun your
search today, don't expect to find a home tomorrow. Buying a home is
like working on a large project. You'll need plenty of time. But if you
feel that you've gathered enough information and resources within your
available time frame, so be it.
- Money
Consider your financial status, before deciding to buy a home. You
should check your credit situation by getting a copy of your most recent
credit report. You are entitled to one free credit report a year. You
should also know exactly how much money you have available and how much
you can afford to spend on a home. Most mortgage lenders will help you
in this process. At the very least you should ask a mortgage lender or
broker to pre-qualify you, but being pre-approved for a mortgage is even
better. A pre-qualification will be based only upon what you tell the
lender is your financial situation, nothing will be double-checked. A
pre-approval will actually start the loan approval process and will tell
you exactly how much you can borrow. If you have been pre-approved, it
will also speed up the loan process and you will be able to close on the
loan earlier. Your mortgage qualifications may also be a factor in your
negotiations with a home owner. Being pre-approved is a strong point for
you. The seller won't have to worry about your mortgage being approved
and about having to show the home all over again.
You should have a good real estate lawyer working for you. The few
hundred dollars you spend may save you thousands in the long run. Don't
just take the advice of your real estate agent, remember he is looking
for the best deal for the seller, not for you. Also, don't just hire any
lawyer. You want an experienced real estate attorney, not just someone
you know who is a divorce or a personal injury lawyer. They won't know
the in and outs of real estate contracts and you don't want to be billed
more just so that they can learn them.
To locate a reliable agent and one that you trust and get along with,
you will need to be able to compare experiences, backgrounds and
referrals from people that you trust and get along with. In most areas
of the country any agent can sell any property that is available in the
area. Don't settle for an agent that you just don't like. Drop him and
find another one.
- Needs vs. Wants
Unless you will be building a new home, it is much easier to decide
what you want based upon the features that are in the homes are
available for purchase in your area.
You don't want to forget even a single detail about the homes you've
been looking at. If you have a digital camera take lots of pictures of
the properties you've been looking at. You should also carry a small
note pad with you in which you write down what you liked and didn't like
about the property and the surrounding area.
- Words and Terms Confusion
You should familiarize your self with the terms and words used during
the dealing and negotiating with your agent and contractor. Also, try to
keep a list of the questions you have that need further clarification.
You should also familiarize yourself with the common abbreviations used
in property listings and ads and there local meaning. A half bath isn't
always what you may think it is. Sometimes it means a toilet and only a
shower, sometimes it's just a toilet.
- Points and Plus
You should learn how to bargain and deal to get the best possible
terms for your purchase. Don't feel pressured by your agent, remember he
probably is working on the best possible deal for the seller, not you
and there are always other houses available.
- Insurance
If you will be taking out a mortgage to finance the purchase of the
home you will need a homeowner's insurance policy. In addition if the
property is in a flood plain, you will be required to get flood
insurance too. In some areas of the country common perils may not be
covered by the standard homeowners insurance policy or if they are
covered there will be a large deductible, for example in Florida,
damaged caused by hurricanes will not be fully covered and as another
example, in California damage caused by earthquakes may not be covered.
To get more extensive coverage for excluded perils maybe cost
prohibitive. Also note many policies no longer cover mold infestation.
If you won't be financing the house, it is still wise to get at least a
basic policy to cover any damage to the home. You can also lower the
cost of insurance by getting a policy with a larger deductible, a$1000
or more.
- Final Walk Through
Before you sign the papers to finalize the purchase of the home, you
should do a final inspection or walk-through of the house. Make sure the
house is clean and that everything that you agreed to in the contract is
still present in the home and to make sure that nothing you don't want
is still there. Remember once the contracts are signed, the home is
yours anything still there becomes your responsibility.
Remember to plan ahead and avoid the common mistakes that most home
buyers make and you might actually enjoy the experience.
Matthew McDonough is a real estate investor and former real estate
agent in New York. He owns property throughout the USA. He wants to
share is knowledge and operates the website
Inside Real
Estate Info
