The buying of a new home takes a bit of time to accomplish, and is not a decision that can be made on the spur of the moment.
The decision to buy or build is a weighty decision at best, and will be among the more important ones you will ever make.
Decide before you do purchase your home to spend some time looking at multiple houses and homes before you decide which one is right for you.
Don’t choose on the spur of the moment. As the old adage goes, haste makes waste and that is one thing that you don’t have time for when you buy a new place to live.
The investment in money alone requires that you take your time and not rush into the purchase before you ware sure that this is where you want to live.
How Do You plan to purchase... Decide what steps you can take to find the home of your dreams. Searching Realtors online, or for sale by owner advertisements on sites that list homes. Perhaps a friend of neighbor might know of homes for sale in your area., or out of it if that’s what you plan to do.
Check incessantly on line and in the local paper. Peruse real estate agencies.
Choose a prebuilt homes contractor and speak with him to find out what kinds of home communities or prebuilt homes are available in your area.
Check with condo resellers or with retailers of building products you know, who may also be in the know about new homes going up in your area.
Get a buyers agent if you still can’t find what you are searching for. A buyers agent is someone who is willing to look around the Realtors and the community and find a house for you based on your specifications of price, bedroom space, bathroom numbers and even such things as school system .
She will know if there are community builds going on now that could benefit you, or if a condo is being prebuilt somewhere, or even if there is a gated community in the works in your area. A buyers agent will help to save you vast sums in terms of time and total sheer frustration because they know of methods that we don’t to track down your perfect community and your perfect house.
He or she has many years at this type of searching and can usually find several homes that they think you might be interested in viewing, so that your time is spent looking at the homes with a view to purchasing one, rather than just wasting your time trying to find something to look at.
http://ezinearticles.com/?What-Steps-to-Take-to-Prepare-for-Purchasing-a-Home&id=706371
Thursday, August 30, 2007
New Homes and Builders
There are many reasons to purchase a new home as opposed to a used one, which has been around possibly for nearly a century.
The very least of which will be the ability to find exactly what you want because you will be the one designing it.
There are some wonderful plans on the market that permit you to choose from them, so long as you stay within certain guidelines.
They are purchased predrawn and certain types of homes are built from them.
The home plans come at a nominal cost in comparison to the hiring or an architect to draw custom plans for a new home.
Builders often purchase the rights to certain home plans to build them in numbers prior to selling them .
Communities are built prior to sale or even being ordered by a client, and when the homes are built they are put on the market at the current market value.
Often these homes are not sold in a timely way, and in some cases the homes will go down markedly in price prior to being purchased.
A good method for a new home owner to find a reasonable price for a new home.
Should you choose instead to build a new home using your own plans, hire a competent architect to design what it is that you want and to offer his or her best guess on how long the completion of the building will take.
Builders are plentiful today as the market for homes is on a marked upsurge.
When you look for a builder find others for whom he has built homes and ask them for their experiences with your builder, in order to prevent problems before they occur.
Many builders will be reputable and work well with the prospective home owner but nightmare stories exist of coming in as much as 30 thousand dollars over budget and taking excessive amounts of time to complete the project at hand, which leaves the home owner effectively homeless should their home have been sold in the interim.
When planning a new home purchase, always check the area in which you plan to build to be certain whether there has existed any problems with the water or sewage, or if in fact flooding is a regular occurrence there.
Working now to prevent future problems will pay off in your ability to enjoy your new home.
For further details, please visit First Release Homes
http://ezinearticles.com/?New-Homes-and-Builders&id=707116
The very least of which will be the ability to find exactly what you want because you will be the one designing it.
There are some wonderful plans on the market that permit you to choose from them, so long as you stay within certain guidelines.
They are purchased predrawn and certain types of homes are built from them.
The home plans come at a nominal cost in comparison to the hiring or an architect to draw custom plans for a new home.
Builders often purchase the rights to certain home plans to build them in numbers prior to selling them .
Communities are built prior to sale or even being ordered by a client, and when the homes are built they are put on the market at the current market value.
Often these homes are not sold in a timely way, and in some cases the homes will go down markedly in price prior to being purchased.
A good method for a new home owner to find a reasonable price for a new home.
Should you choose instead to build a new home using your own plans, hire a competent architect to design what it is that you want and to offer his or her best guess on how long the completion of the building will take.
Builders are plentiful today as the market for homes is on a marked upsurge.
When you look for a builder find others for whom he has built homes and ask them for their experiences with your builder, in order to prevent problems before they occur.
Many builders will be reputable and work well with the prospective home owner but nightmare stories exist of coming in as much as 30 thousand dollars over budget and taking excessive amounts of time to complete the project at hand, which leaves the home owner effectively homeless should their home have been sold in the interim.
When planning a new home purchase, always check the area in which you plan to build to be certain whether there has existed any problems with the water or sewage, or if in fact flooding is a regular occurrence there.
Working now to prevent future problems will pay off in your ability to enjoy your new home.
For further details, please visit First Release Homes
http://ezinearticles.com/?New-Homes-and-Builders&id=707116
How to Find the Perfect Home
Your home is so much more than a building of brick and stone. It is a huge investment not only financially but emotionally and time wise as well.
To assure that your purchase is a match to what you have dreamed of, there are certain steps that you can take. Sit down and make a list for yourself of what you are thinking of when you see your home in your minds eye.
Is it a pre-built condo, or a pre existing house that your are thinking of.
Do you want a gated community, where security and other benefits are added for your convenience? Preexisting homes are for sale in community builds all the time.
Know in your mind what your perfect home really is where would it be, and what would it look like. Is it a condominium, or is it a two story farm house.
When you can answer all those questions to yourself then you will know what kind of house you are looking for to call home.
How much is too much?
Another consideration will be how much you can legitimately afford to pay for your new home, and how much can you pay each month to provide that home to your family. If you don’t know for certain what kind of payment. You can afford then speak to an expert at the mortgage lenders agency and find out exactly what they believe you can afford based on your paycheck and those homes which are available in your area.
Make certain that your payments leave you something to come and go on. Living your life on a paycheck to paycheck basis isn’t much fun.
Get all your finances in a row before you begin to shop for a home.
Some of the more upscale communities of pre-built homes will be a bargain for you, because you purchase a new home, at the rock bottom price if you get in on the ground floor.
Make an offer on one of these because if you do, then the price is locked in for your new home and can’t be raised even if the contractor spends a bit more to build the home.
Invest your time wisely and seek out more than one home. Check out the pre-built homes, modular homes and pre-constructed ones.
Some buyers of homes will look at only one or two properties before they make a choice and it sometimes turns out to be the wrong choice.
For further details, please visit First Release Homes
http://ezinearticles.com/?How-to-Find-the-Perfect-Home&id=707139
To assure that your purchase is a match to what you have dreamed of, there are certain steps that you can take. Sit down and make a list for yourself of what you are thinking of when you see your home in your minds eye.
Is it a pre-built condo, or a pre existing house that your are thinking of.
Do you want a gated community, where security and other benefits are added for your convenience? Preexisting homes are for sale in community builds all the time.
Know in your mind what your perfect home really is where would it be, and what would it look like. Is it a condominium, or is it a two story farm house.
When you can answer all those questions to yourself then you will know what kind of house you are looking for to call home.
How much is too much?
Another consideration will be how much you can legitimately afford to pay for your new home, and how much can you pay each month to provide that home to your family. If you don’t know for certain what kind of payment. You can afford then speak to an expert at the mortgage lenders agency and find out exactly what they believe you can afford based on your paycheck and those homes which are available in your area.
Make certain that your payments leave you something to come and go on. Living your life on a paycheck to paycheck basis isn’t much fun.
Get all your finances in a row before you begin to shop for a home.
Some of the more upscale communities of pre-built homes will be a bargain for you, because you purchase a new home, at the rock bottom price if you get in on the ground floor.
Make an offer on one of these because if you do, then the price is locked in for your new home and can’t be raised even if the contractor spends a bit more to build the home.
Invest your time wisely and seek out more than one home. Check out the pre-built homes, modular homes and pre-constructed ones.
Some buyers of homes will look at only one or two properties before they make a choice and it sometimes turns out to be the wrong choice.
For further details, please visit First Release Homes
http://ezinearticles.com/?How-to-Find-the-Perfect-Home&id=707139
New Home Communities
A new home community is a neighborhood where the homes are all pre-built to certain specifications.
Each home is probably built to the same floor-plan, and will cost approximately the same amount to purchase.. The neighborhood consists of all new housing so there is not the concern for the neighbors care of their aging home lowering real estate valuations in the area.
New Home communities ar increasingly popular in the United States as home values continue to rise and homes become harder to find for prospective buyers.
One such company in the US which operates new home communities nationally are Anderson homes. Floor plans in these homes will feature a great deal of open floor space, larger areas to help you in entertaining, and most models will feature full basements which remain unfinished until the purchaser finishes them.
These homes are usually pre inspected prior to being put on the market for sale, however they do not have to be so availing yourself of the services of a building inspector might be worth your while.
While most new home communities are respectable places to live which are well built and well warranted, in some cases contractors have used substandard materials with which to build them. This results in a less than perfect new home, which may have problems in many areas after purchase, among them heating, air conditioning or roofing issues.
Take care no matter what type home you purchase to ask the neighbors in the area of new home communities what their experiences have been with their new home, particularly if they’ve lived in the area for any number of months.
Most will be glad to talk with you about their homes if they have had any issues with them and if they are particularly pleased again, they will be pleased to let you know that.
People enjoy discussing the problems that they have in various areas and if they are happy with the house, they will be only too glad to tell you so and tell you what the reasons are they are pleased. While you are discussing their home, a few questions might be in order.
Ask them about plumbing problems and heating or air conditioning issues specifically as well as water pipes and dampness in the basement.
. Find out if they have had problems and if so, did the contractor stand behind his building and make the repairs for the new home owner.
For further details, please visit First Release Homes
http://ezinearticles.com/?New-Home-Communities&id=707126
Each home is probably built to the same floor-plan, and will cost approximately the same amount to purchase.. The neighborhood consists of all new housing so there is not the concern for the neighbors care of their aging home lowering real estate valuations in the area.
New Home communities ar increasingly popular in the United States as home values continue to rise and homes become harder to find for prospective buyers.
One such company in the US which operates new home communities nationally are Anderson homes. Floor plans in these homes will feature a great deal of open floor space, larger areas to help you in entertaining, and most models will feature full basements which remain unfinished until the purchaser finishes them.
These homes are usually pre inspected prior to being put on the market for sale, however they do not have to be so availing yourself of the services of a building inspector might be worth your while.
While most new home communities are respectable places to live which are well built and well warranted, in some cases contractors have used substandard materials with which to build them. This results in a less than perfect new home, which may have problems in many areas after purchase, among them heating, air conditioning or roofing issues.
Take care no matter what type home you purchase to ask the neighbors in the area of new home communities what their experiences have been with their new home, particularly if they’ve lived in the area for any number of months.
Most will be glad to talk with you about their homes if they have had any issues with them and if they are particularly pleased again, they will be pleased to let you know that.
People enjoy discussing the problems that they have in various areas and if they are happy with the house, they will be only too glad to tell you so and tell you what the reasons are they are pleased. While you are discussing their home, a few questions might be in order.
Ask them about plumbing problems and heating or air conditioning issues specifically as well as water pipes and dampness in the basement.
. Find out if they have had problems and if so, did the contractor stand behind his building and make the repairs for the new home owner.
For further details, please visit First Release Homes
http://ezinearticles.com/?New-Home-Communities&id=707126
Viewing Your Prospective Home
When you plan to purchase a home, whether it be a prebuilt one, or a modular home, you will want to inspect it carefully to be certain it is the right home for you and your family.
In consideration of the importance of the decision that you are about to make, nothing is so important as research when choosing to purchase a new home of any kind.
Condos, to modulars to preconstructed gated communities, the home you purchase is a big investment in your lifestyle and your future.
Going to view the home with the right tools is necessary in order to check it thoroughly prior to making an offer on the home.
Be certain you are armed with the right equipment when you go to view homes.Go to see as many as you possibly can in any given weekend so that you can make an informed choice about what you want from a home.
Take a few things with you. Be sure to wear comfy clothing so that climbing about and measuring and checking certain aspects of your newly built or used home is easier than if you were not dressed casually.
Come with your tool kit in tow. Be certain to bring along with you a flashlight: for lighting up a darkened hallway or closet a digital or instant camera for taking those necessary photos to compare later.
A notebook for jotting down your thoughts on the home, or measurements of windows and doorways, to ascertain whether some of yoru furniture will have problems being put inside.
A level, to be certain that floors and ceilings are level and square, to avoid issues with decorating or furniture placement.
A measuring tape so that you can measure windows, doors, room sizes, and other aspects of the home.
When you view the home be certain to open a few cabinet doors, (with permission if the home owner still lives in the home)
Check every possible nook and cranny to be sure that some damage is not hidden, such as water damage in a closet or attic roof.
When you find a home that seems as if it might be for you, be certain to have a contractor, or other home inspector take a hard look at it for you.
Checking the roof, plumbing fixtures and furnaces as well as ductwork may save you a great deal of money at a time in the future.
Most home owners and contractors are honest people with a high level of integrity, but unfortunately some are not.
It is necessary to protect your own interests with regard to a new home purchase.
For further details, please visit First Release Homes
In consideration of the importance of the decision that you are about to make, nothing is so important as research when choosing to purchase a new home of any kind.
Condos, to modulars to preconstructed gated communities, the home you purchase is a big investment in your lifestyle and your future.
Going to view the home with the right tools is necessary in order to check it thoroughly prior to making an offer on the home.
Be certain you are armed with the right equipment when you go to view homes.Go to see as many as you possibly can in any given weekend so that you can make an informed choice about what you want from a home.
Take a few things with you. Be sure to wear comfy clothing so that climbing about and measuring and checking certain aspects of your newly built or used home is easier than if you were not dressed casually.
Come with your tool kit in tow. Be certain to bring along with you a flashlight: for lighting up a darkened hallway or closet a digital or instant camera for taking those necessary photos to compare later.
A notebook for jotting down your thoughts on the home, or measurements of windows and doorways, to ascertain whether some of yoru furniture will have problems being put inside.
A level, to be certain that floors and ceilings are level and square, to avoid issues with decorating or furniture placement.
A measuring tape so that you can measure windows, doors, room sizes, and other aspects of the home.
When you view the home be certain to open a few cabinet doors, (with permission if the home owner still lives in the home)
Check every possible nook and cranny to be sure that some damage is not hidden, such as water damage in a closet or attic roof.
When you find a home that seems as if it might be for you, be certain to have a contractor, or other home inspector take a hard look at it for you.
Checking the roof, plumbing fixtures and furnaces as well as ductwork may save you a great deal of money at a time in the future.
Most home owners and contractors are honest people with a high level of integrity, but unfortunately some are not.
It is necessary to protect your own interests with regard to a new home purchase.
For further details, please visit First Release Homes
Article Source: http://EzineArticles.com/?expert=Hayi_Mansoor
First Time Buyer - Remember These Things
There are a huge number of concerns when you buy a home. If it is the first time you have purchased a property, much of the process will be pretty confusing. In fact, the process does not really get any less confusing with the ever-changing nature of the real estate industry. This is one of the reasons that it is essential to work with a realtor who stays on top of what is happening in this dynamic industry. Only realtors are constantly educating themselves on the evolving realities of the current real estate market. Sellers and buyers only have so much access to information regarding market trends and changes and indeed this info usually comes from a real estate professional.
One thing that most first time buyers are unsure of is the necessary amount for a down payment. Now, depending on the financing options you are considering down payments can be as little as nothing at all or as high as the entire purchase price of the home. However, the latter is hardly ever the case in a world where homes cost a fair bit. Nothing down! Careful, home financing plans where no down payment is required can be chancy. It's better to to go down with between 5 and 10% of the purchase price. Some lender will accept 3% as well. Remember that the lower your down payment amount, the higher your monthly payments are likely to be.
Credit scores are also an important part of this process as your score will dictate the financing options available to you. It is possible to purchase a home with damaged credit. If this applies to you then you may want to consider seeking out a lender that will help you repair your credit before you arrange the actual financing of the home. As stated before, the higher your score, the better the loan programs that will be available to you. Make sure that you take note of every aspect of your home loan. Be sure that you know every clause and aspect of your loan before you sign it, it is your responsibility to be "in the know" about your home loan.
John Mejia is a real estate agent specializing in Birmingham real estate. If you are looking for a new home in Alabama, contact John today or visit the Mejia Group online at http://www.themejiagroup.com.
Article Source: http://EzineArticles.com/?expert=John_Mejia
One thing that most first time buyers are unsure of is the necessary amount for a down payment. Now, depending on the financing options you are considering down payments can be as little as nothing at all or as high as the entire purchase price of the home. However, the latter is hardly ever the case in a world where homes cost a fair bit. Nothing down! Careful, home financing plans where no down payment is required can be chancy. It's better to to go down with between 5 and 10% of the purchase price. Some lender will accept 3% as well. Remember that the lower your down payment amount, the higher your monthly payments are likely to be.
Credit scores are also an important part of this process as your score will dictate the financing options available to you. It is possible to purchase a home with damaged credit. If this applies to you then you may want to consider seeking out a lender that will help you repair your credit before you arrange the actual financing of the home. As stated before, the higher your score, the better the loan programs that will be available to you. Make sure that you take note of every aspect of your home loan. Be sure that you know every clause and aspect of your loan before you sign it, it is your responsibility to be "in the know" about your home loan.
John Mejia is a real estate agent specializing in Birmingham real estate. If you are looking for a new home in Alabama, contact John today or visit the Mejia Group online at http://www.themejiagroup.com.
Article Source: http://EzineArticles.com/?expert=John_Mejia
House Hunting Tips
So you are thinking about buying a home huh? If you are a first-time home buyer, there are some important issues to take into consideration when beginning the journey of house-hunting. It is very easy to be bamboozled if you are someone that is young and single or even a married couple buying that first home if you don’t have someone that is very knowledgeable of homes and the pitfalls to avoid when buying. All too often people buy into a situation where a home has many problems that were unseen or don’t reveal themselves until well after the home is purchased. Unless maybe you are having a new home built, when you are house hunting, definitely go in with a “buyer beware” attitude with each and every home. If you are using a buyer’s agent, don’t count on them to weed out the pitfall homes for you. Buyer’s agents may appear to be on your side, but all they really want to do is get you to buy a home as quickly as possible so they can get that commission check and move on. About the only thing they are really good for is to use as a mediator between the buyer and seller when making an offer on buying a home. They will draft up the paperwork and do the talking for you. So here are some important suggestions to consider when buying a home:
1. The first thing you want to do is get a mortgage pre-approval letter from a mortgage lender. Find one with a good interest rate that you might use if taking out a mortgage. Just because they provide you with a pre-approval letter doesn’t mean you have to use them as a lender. But what it does mean, is that you are good for that loan amount and they will be ready right away to provide you with at a moments notice. In fact, most realestate agents won’t work with you if you don’t have a mortgage pre-approval. All too many times, people put offers on homes, but in the end are denied a mortgage anyhow. This wastes everyone’s time.
2. Get a buyer’s agent from a reputable realestate company. They are there to search out homes for you and then arrange for you to look at the home. They can arrange for the seller to vacate the home while you look through it. They will also mediate between you and the seller when it comes time to put down an offer. Most likely, the seller will have a seller’s agent.
3. This is a very important thing to remember: If you are buying a home that is not new, then about 85% of the time, the people that are selling it are definitely moving out for a reason. The other 15% are people that are either retirement age that are scaling down, people that have had their jobs relocated, or people who like the house but have come into some money and are simply moving “up”. From what I have found, the usual case is people put their homes up for sale because there is something that they don’t like about the home. The home might back up to a very busy street. I saw lots of those types of homes when I was home shopping. There could be major foundation problems. Heating and cooling problems. A bad home layout. A neighborhood with bad neighbors. Water issues around the foundation. The list goes on and on. It is issues like this that turn house hunting into a 3,4,5, or 6 month journey. You might look at 50 homes before you buy one.
4. Do not ever buy the first home you see. You have definitely got to have your agent show you at least several more homes if the situation arises where the first home you see is the one you want.
5. If you see a home you like that is within your price range, while you are looking through the home, definitely be looking for any problems as well. It is too easy to be distracted away from any problems or potential problems if you are too pre-occupied with looking at the home’s amenities. I will explain what problems to look for further down the page.
6. Because of the issues I mentioned above, such as the “85%” issue, defines a situation that I call a “hot house”. A “hot house” is a house that falls into the “15%” category of home sellers. These are homes that are priced reasonably, are in a good location, have a good layout, have been kept up very well, and are just a great buy. These are the types of homes that are put up on the market on a Friday, and sell by Saturday. Homes like this are not only nice to live in and easy to maintain, but are easy to sell if the time comes where you might want to move into another home one day. Typically, the selling agent of these types of homes already knows it is a “hot house”. Seller’s agent are also “buyer’s agents” as well. Being that they know it is a “hot house”, they will go find their own buyer for it and ignore your own buyer’s agent even if you want to make an offer on the house. They do this because if they can find their own buyer, they get all of the commission on the home. Typically, if a buyer’s agent is mediating with a seller’s agent, the buyer’s agent will get 2%-3% commission and the seller’s agent will get the other 2%-3% commission. The commission is based on the final selling price of the home. A selling agent that finds a buyer on his own will act as both the selling and buying agent. Therefore, he or she will get all of the 4%-7% commission of the home. So there is some conflict of interest when it comes to buying a home. Hopefully, maybe, the buyer’s agent that you hire is a seller’s agent as well. He or she might have a “hot house” they can sell you that you will get “first dibs” on.
7. Now, let’s say you find a home that you like. Check to make sure all the interior doors of the home close without rubbing on the door frames. This is an indication of foundation issues. Sometimes people will get deceptive and “sand down” the top portion of the door that rubs on the frame. So just because doors might close ok, there could still be foundation issues. Definitely go and look in the basement. Look for cracks in the wall. Look for signs of water leakage. Look for major cracking of the basement floor. Any of these issues could mean bad news. If the basement has a “dingey” feel or a moldy smell to it, stay away from the house.
8. Take note if the home’s interior is “up to date” and that the owners keep it cleaned and well maintained. If it appears like the owners have neglected the home’s maintenance, then that always means that they’ve neglected everything in the home. Problems that won’t present themselves until later.
9. Definitely take a look at the home’s exterior. Check to make sure none of the window sills are rotted. Check for any wood rot around the exterior of the home. Also find out how old the roof is.
10. Do not make an offer on a home without a seller’s disclosure. By law, the sellers are to fill out a form called a disclosure to answer questions about the home and leave this in plain view of the buyer when they are looking at the home. Read the disclosure. It will give answers to questions such as how old the roof is, whether or not they have foundation issues, termite issues, rodents, or any other problems with the house that even might affect the home insurance premiums. For instance, a home that I had bought had two layers of roofing on it. The first layer was never removed when the second new roof was put on. It was done this way because it was “cheaper”, but insurance companies will charge a slightly higher premium because it will cost more to replace the roof if the roof is ever damaged. It takes more labor to remove two roof layers than one.
11. Only take seller’s disclosures with a grain of salt. People do lie, or sugar-coat things to try and sell the house. Once you’ve decided to make an offer on the house, have a home inspection done. Make the offer on the house contingent upon that the home inspection comes out clean. You will have to hire a home inspector to do this. They typically charge $250 - $450 for an inspection. Do not ever use an inspector that the realestate agent recommends. These inspectors will be working for the interest of the agent, and not yours. However, that doesn’t mean that the inspector that you found on your own still won’t be working for the interest of the realestate agent anyways. He might want to have that realestate agent use his name for recommendations. Home inspectors are like everyone else. They are in the business to make money and get their name out there.
12. If you are able, walk around with the inspector while he is inspecting the home. He will point things out to you. Do NOT let the realestate agent distract you during this time. The agent will be present also while the inspector is performing the inspection. After the inspection, review the report. If something minor needs fixing, then have a new contract offer written up to have whatever issues were found corrected. If any major issues were found, such as foundation issues, termites, etc., then avoid the house. Better to have paid an inspector $ if it means saving you from buying a money-pit house.
13. Lastly, if you had an inspection, and something major turns up, but you still really really like the house and you don’t want to walk away from it, then just about anything can be fixed these days. Even major foundation issues can be fixed in this day and age. You can re-adjust your offer to include in the price that the seller pay for those issues to be fixed. Or, either reduce your offer drastically and then have extra money escrowed or take out a home equity line of credit and have the issue repaired. Also, upon putting down an offer, ask your realestate agent for a market comp. A market comp is a report of final selling prices of homes in the area that you are buying. You can compare the prices with the home’s price that you are looking at. It will give you an idea if the home is being priced appropriately. And do check out the county’s appraisal of the home as well. If a house is in tip-top shape and has had some remodeling and updating done over the years, then typically it might go for $15K - $20K over county appraisal. All too many times home owners will try and get dollar for dollar return on their improvements. This is a no-no. Home owners should not expect dollar for dollar return on improvements. At most, maybe a 60% return. But usually only about a 25% return. Depends on how hot the market is. The situation you do not want to walk into is to pay full price for a home, (county appraisal and above), and then find out that you have to shell out more $ to make repairs. The most important thing, is to educate yourself on homes or to at least have someone that you know such as a parent, friend, or relative that is knowledgeable about homes go home-shopping with you. You can’t fully count on the realestate agent nor the inspector to ensure that what you buy is within your best interest. I urge everyone to go buy a good book on home buying and read it before buying that first home. Or even second home for that matter. Too much “bamboozling” going on these days.
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1. The first thing you want to do is get a mortgage pre-approval letter from a mortgage lender. Find one with a good interest rate that you might use if taking out a mortgage. Just because they provide you with a pre-approval letter doesn’t mean you have to use them as a lender. But what it does mean, is that you are good for that loan amount and they will be ready right away to provide you with at a moments notice. In fact, most realestate agents won’t work with you if you don’t have a mortgage pre-approval. All too many times, people put offers on homes, but in the end are denied a mortgage anyhow. This wastes everyone’s time.
2. Get a buyer’s agent from a reputable realestate company. They are there to search out homes for you and then arrange for you to look at the home. They can arrange for the seller to vacate the home while you look through it. They will also mediate between you and the seller when it comes time to put down an offer. Most likely, the seller will have a seller’s agent.
3. This is a very important thing to remember: If you are buying a home that is not new, then about 85% of the time, the people that are selling it are definitely moving out for a reason. The other 15% are people that are either retirement age that are scaling down, people that have had their jobs relocated, or people who like the house but have come into some money and are simply moving “up”. From what I have found, the usual case is people put their homes up for sale because there is something that they don’t like about the home. The home might back up to a very busy street. I saw lots of those types of homes when I was home shopping. There could be major foundation problems. Heating and cooling problems. A bad home layout. A neighborhood with bad neighbors. Water issues around the foundation. The list goes on and on. It is issues like this that turn house hunting into a 3,4,5, or 6 month journey. You might look at 50 homes before you buy one.
4. Do not ever buy the first home you see. You have definitely got to have your agent show you at least several more homes if the situation arises where the first home you see is the one you want.
5. If you see a home you like that is within your price range, while you are looking through the home, definitely be looking for any problems as well. It is too easy to be distracted away from any problems or potential problems if you are too pre-occupied with looking at the home’s amenities. I will explain what problems to look for further down the page.
6. Because of the issues I mentioned above, such as the “85%” issue, defines a situation that I call a “hot house”. A “hot house” is a house that falls into the “15%” category of home sellers. These are homes that are priced reasonably, are in a good location, have a good layout, have been kept up very well, and are just a great buy. These are the types of homes that are put up on the market on a Friday, and sell by Saturday. Homes like this are not only nice to live in and easy to maintain, but are easy to sell if the time comes where you might want to move into another home one day. Typically, the selling agent of these types of homes already knows it is a “hot house”. Seller’s agent are also “buyer’s agents” as well. Being that they know it is a “hot house”, they will go find their own buyer for it and ignore your own buyer’s agent even if you want to make an offer on the house. They do this because if they can find their own buyer, they get all of the commission on the home. Typically, if a buyer’s agent is mediating with a seller’s agent, the buyer’s agent will get 2%-3% commission and the seller’s agent will get the other 2%-3% commission. The commission is based on the final selling price of the home. A selling agent that finds a buyer on his own will act as both the selling and buying agent. Therefore, he or she will get all of the 4%-7% commission of the home. So there is some conflict of interest when it comes to buying a home. Hopefully, maybe, the buyer’s agent that you hire is a seller’s agent as well. He or she might have a “hot house” they can sell you that you will get “first dibs” on.
7. Now, let’s say you find a home that you like. Check to make sure all the interior doors of the home close without rubbing on the door frames. This is an indication of foundation issues. Sometimes people will get deceptive and “sand down” the top portion of the door that rubs on the frame. So just because doors might close ok, there could still be foundation issues. Definitely go and look in the basement. Look for cracks in the wall. Look for signs of water leakage. Look for major cracking of the basement floor. Any of these issues could mean bad news. If the basement has a “dingey” feel or a moldy smell to it, stay away from the house.
8. Take note if the home’s interior is “up to date” and that the owners keep it cleaned and well maintained. If it appears like the owners have neglected the home’s maintenance, then that always means that they’ve neglected everything in the home. Problems that won’t present themselves until later.
9. Definitely take a look at the home’s exterior. Check to make sure none of the window sills are rotted. Check for any wood rot around the exterior of the home. Also find out how old the roof is.
10. Do not make an offer on a home without a seller’s disclosure. By law, the sellers are to fill out a form called a disclosure to answer questions about the home and leave this in plain view of the buyer when they are looking at the home. Read the disclosure. It will give answers to questions such as how old the roof is, whether or not they have foundation issues, termite issues, rodents, or any other problems with the house that even might affect the home insurance premiums. For instance, a home that I had bought had two layers of roofing on it. The first layer was never removed when the second new roof was put on. It was done this way because it was “cheaper”, but insurance companies will charge a slightly higher premium because it will cost more to replace the roof if the roof is ever damaged. It takes more labor to remove two roof layers than one.
11. Only take seller’s disclosures with a grain of salt. People do lie, or sugar-coat things to try and sell the house. Once you’ve decided to make an offer on the house, have a home inspection done. Make the offer on the house contingent upon that the home inspection comes out clean. You will have to hire a home inspector to do this. They typically charge $250 - $450 for an inspection. Do not ever use an inspector that the realestate agent recommends. These inspectors will be working for the interest of the agent, and not yours. However, that doesn’t mean that the inspector that you found on your own still won’t be working for the interest of the realestate agent anyways. He might want to have that realestate agent use his name for recommendations. Home inspectors are like everyone else. They are in the business to make money and get their name out there.
12. If you are able, walk around with the inspector while he is inspecting the home. He will point things out to you. Do NOT let the realestate agent distract you during this time. The agent will be present also while the inspector is performing the inspection. After the inspection, review the report. If something minor needs fixing, then have a new contract offer written up to have whatever issues were found corrected. If any major issues were found, such as foundation issues, termites, etc., then avoid the house. Better to have paid an inspector $ if it means saving you from buying a money-pit house.
13. Lastly, if you had an inspection, and something major turns up, but you still really really like the house and you don’t want to walk away from it, then just about anything can be fixed these days. Even major foundation issues can be fixed in this day and age. You can re-adjust your offer to include in the price that the seller pay for those issues to be fixed. Or, either reduce your offer drastically and then have extra money escrowed or take out a home equity line of credit and have the issue repaired. Also, upon putting down an offer, ask your realestate agent for a market comp. A market comp is a report of final selling prices of homes in the area that you are buying. You can compare the prices with the home’s price that you are looking at. It will give you an idea if the home is being priced appropriately. And do check out the county’s appraisal of the home as well. If a house is in tip-top shape and has had some remodeling and updating done over the years, then typically it might go for $15K - $20K over county appraisal. All too many times home owners will try and get dollar for dollar return on their improvements. This is a no-no. Home owners should not expect dollar for dollar return on improvements. At most, maybe a 60% return. But usually only about a 25% return. Depends on how hot the market is. The situation you do not want to walk into is to pay full price for a home, (county appraisal and above), and then find out that you have to shell out more $ to make repairs. The most important thing, is to educate yourself on homes or to at least have someone that you know such as a parent, friend, or relative that is knowledgeable about homes go home-shopping with you. You can’t fully count on the realestate agent nor the inspector to ensure that what you buy is within your best interest. I urge everyone to go buy a good book on home buying and read it before buying that first home. Or even second home for that matter. Too much “bamboozling” going on these days.
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