Just click on the section
How often do you shop for clothing, then purchase the first item you see? Would you purchase a computer without first comparing the hard drive capacity, the megabytes of RAM, or the display size? Would you agree it's wise to make comparisons before you buy?
The same logic applies to home buying. There are many variables to consider such as age of the home, size, features, amenities, and condition of the property. No two homes are alike.
Begin by sharing your objectives with the real estate agent who will be showing you homes. Explain your requirements, as well as the features and amenities you hope to find. Tell it all. Only then will the agent be able to research the market for the perfect home.
Expect to see three to six homes initially. These will become a benchmark for comparing other homes seen later. Let the agent know what you like and dislike about each home so the search can be narrowed to only the best homes. You may want to return to one of the favorites for further inspection and comparison.
It may also help to see homes priced slightly above and below your preferred range for comparison's sake. Although you have a favorite style, don't rule out variations until you've seen them. In short, take time to shop – then enjoy your choice in a new home!
So – you're buying a home? When can you move in?
That's a matter you'll need to decide before you sign your offer to purchase the home. Actually, it is one of numerous items to be negotiated with the sellers.
The optimum possession date is often thought to be the day you acquire title to your home, the “closing” date. If so, your purchase offer should specify “possession to be at closing” in the appropriate blank. If the sellers accept your offer, you may expect possession on that date.
Occasionally, buyers and sellers agree on another possession date, before or after the closing. Because such an arrangement can create unusual circumstances, a limited or “temporary” possession agreement should be signed by both sellers and buyers. This protects both parties in the event of a delayed closing date, a declined loan application, or unexpected repairs.
This agreement states the possession date, any rent to be paid by the occupying parties, and who is responsible for repairs, insurance, etc. It should also state the circumstances under which the occupying parties must vacate the home (i.e. failure of the buyers to complete the purchase after they have moved in).
When purchasing your home, ask the agent to explain local customs for possession and move-in. This can alleviate anxiety and provide a “no surprises” move to your new home.
You've laid the groundwork for buying a home. You've contacted an agent, explained your objectives, been pre-approved by a mortgage lender, and you're ready for a grand tour of available homes. Are there any special tips which might help you make your decision?
Yes. Because you are likely to see a number of homes, comparing them as you go, bring along a few “memory” tools. First, be sure you have a pen and pad to make hand-written notes about each home. Bring a tape measure to check room sizes too.
One technique often used is to rate each home from 1 to 10 as you leave it, with 10 being the highest score. Rate each home individually, without comparing the score to the previous home. Refer back to the entire score sheet at day's end to see how the scores match your notes on the properties.
Have a video or digital camera? These handy tools allow you to do an instant review of homes you've seen, even in the car as you drive from one to another. Later, you can compare your photos/videos against your notes and the individual scores.
Finally, ask the agent to provide brochures on each property with details on the size, features and price offered. The brochures can help bring the day into perspective, especially if you've visited six to ten homes.
When buying a home, how can you be certain it is fairly priced? Consider the following scenario and the answer will become evident.
Say your family has outgrown the capacity of your refrigerator. You've decided to buy a new one, however it's been ten years since you've shopped for such an appliance. You're not locked into any particular brand, and prefer a model with about 24 cubic feet of storage space.
You visit several appliance dealers and learn their refrigerators range in price from $975 up to $1,600. Some offer larger meat drawers while others have “in-the-door” ice and water. You first decide which features are most important, then compare similar models against each other for price and value. Having made your comparisons, you make your purchase with confidence.
Buying a home and feeling good about the price you pay is a similar experience. Since no two homes are alike, you first choose a price range which offers the size home you expect to find. You then compare the features, age, condition, location, and amenities against the price asked.
Quickly, you learn to differentiate between homes which are priced “above the market” and those which are fairly priced. If you finance the home, your mortgage lender will have the home appraised, adding credibility that the price you have agreed to pay is indeed a fair one.
Imagine choosing your next home, then offering to pay cash. Think you would get the sellers' attention? Would paying cash strengthen your value as a buyer? Whether or not you have the financial strength to pay cash, you can still gain the advantage of cash with very little effort.
To sellers, receiving cash simply means getting all of their equity from the house, without selling financing. The source of the final settlement check is of no consequence to them. It doesn't matter if the bulk of it comes from a mortgage lender.
The real benefit of a true cash offer is that sellers need not worry the buyers will not qualify for a loan. There are no last minute surprises where cash is involved – no unexpected mortgage rejections.
So – what if the buyers were approved for their mortgage before even approaching the sellers? They inspect the sellers' home, make a firm offer, and present a mortgage approval letter from the lender. Viola!
The first step in any home purchase today should be a visit to the mortgage company. By providing the required financial information upfront, before even looking for a home, buyers can gain the advantage of making a “cash” offer.
Planning to buy a home? Want the sellers to take you seriously? Obtain your mortgage approval first for a very satisfying home purchase experience!
Schools, churches, shopping, employment, and community services are all factors to consider when deciding on the right location for your next home. Once you've chosen favorite areas in which to make a purchase, how will you locate the perfect property?
Whether you're already familiar with the community, or relocating from out-of-state, you'll need up-to-date information to make your decision. The real estate agent you choose can provide that information, as well as answers to your questions about choosing a home.
From maps, school profiles, and employers to moving day jitters, the agent's role is to make your home choice simple and rewarding. The services provided will not only help narrow your home search to a few favorite neighborhoods, but will also help identify suitable homes within those locations.
Today's computer technology allows the agent to research each neighborhood for homes in excellent condition which are priced fairly, and to eliminate those which do not meet your criteria. The savings to you in time and effort are immeasurable.
Once you've made your decision, the agent offers continuing services to assure that financing is obtained, inspections are completed satisfactorily, and the transaction is closed successfully.
Access to complex, accurate sources of current information is the real estate agent's stock-in-trade. Use it wisely for an informed decision, and you will enjoy a rewarding home purchase.
Ready to buy your next home? Although many activities are involved in a home purchase, there are only two major steps to owning a home – the contract and the closing.
First comes the contract. Once you have selected a real estate agent, been pre-qualified for a mortgage, and seen a selection of suitable homes, the time comes to make a purchase decision. Your formal decision to make the purchase is expressed as a written Offer To Purchase.
This Offer, when accepted by the sellers, becomes the contract which governs your real estate transaction. It contains the purchase price, financing terms, any special conditions, and a final closing date – the date on which the final settlement takes place and possession is delivered.
Once signed, all further activities are carried out in accordance with the terms of the contract. Those activities may include an appraisal of the home's value, a survey, inspections, a title search, required repairs, final loan approval, and a pre-settlement walk-through inspection of the home.
The second and final step is the closing or settlement. Once all the terms and conditions of the contract have been met, buyers and sellers conclude the transaction. The buyers provide the purchase funds, while the sellers sign and deliver the deed to the property. Possession is most often delivered at the closing.
Have you ever served on a committee? How they work is interesting. Place any ten decisive leaders into a committee structure, and quite often no decision can be reached at all. It's also been said that “a camel is a horse created by a committee.”
What do committees have to do with home buying? Plenty. Say a young family decides to buy a home. The husband and wife work well together and can easily reach a joint decision. They decide, however, to include their parents, an uncle, and a friend in their home search, even though they will not occupy the home.
The committee has been formed. Each member approaches the various homes from a different perspective – forming value judgments – and expressing them. Soon – there is no hope of reaching a consensus and the entire home purchase scenario is “tabled” for lack of a decision. The committee has performed well.
What went wrong? The two decision makers who are ultimately responsible have ceded their authority to others who have no interest in the final outcome. The purchasers are left with confusion, indecision, and no new home.
When buying your next home, include in your search only those who will occupy the home. Leave young children out of the loop, initially at least. Tell relatives after the deal is done. Your leadership will provide a rewarding home buying experience.
Wondering if interest rates will go back down before buying your next home? They've inched up, yet seem to be easing off ever so slightly. Meanwhile, the average home is appreciating at about 3-5% per year.
If you've put off buying a home in hopes that you might save a little more monthly interest, consider some statistics. On a $130,000 mortgage at 8.25% for 30 years, the principal and interest payments will be $976.64 per month.
If rates go down to 7 3/4%, you would save $45.31 per month in interest – not too bad for waiting an extra month or two to buy. If homes are appreciating at 4% per year, however, a $160,000 home would be appreciating $528 every month.
What happens if you wait – and interest rates go up? Well – you know the answer. You'll have higher payments, and pay more for a home to boot.
The housing climate right now is the most pleasant in years. Home price increases have moderated over the past few years, and interest rates are still close to the bottom of their cycle.
If a home purchase is in your immediate future, contact an agent to get started. Share your housing objectives, then ask to be “prequalified” for a mortgage loan.
When you're ready to buy – that's the right time. Don't wait another day.
Want to buy a home? What if you had to make 50, 100 or even 200 phone calls to find the perfect home? Are you prepared to visit and sort through 75, 100 or 125 homes before finding just the right one? That could happen if you try to buy a home without the services of a real estate agent.
Just imagine beginning your search. Some homes will be too large, some too small. Others will be too old, or too new with prices too high, or questionably low. Some locations will be right, but the home won't.
Consider the alternative, a real estate agent. During a short initial interview, the agent will ask for information about the home you want, i.e. size, location, financing, etc. That information will then be used to do a computer market search for homes which meet your requirements. Those which don't will be eliminated, as will those which have already sold.
Next, the agent will preview the homes to determine their suitability based on your earlier interview. Finally, appointments will be set for you to see homes which clearly meet your requirements. You may only see six or eight homes, however each will offer most, or even all, the desired features and amenities you requested.
Which would you rather do? Spend endless days or weeks searching, or invest a few rewarding days making the right decision?
Think you've missed the boat on mortgage interest rates? With all the hype in the media about increasing interest rates last year, perhaps you put off buying that next home. If so, there's good news.
Over recent months, mortgage rates have been steadily decreasing. Nationally, the average is back under the 8% mark with some rates as low as 7 1/2%. If you waited to buy, your reward may be lower monthly payments.
How does the lower rate translate to monthly payments on the typical 30-year loan? For each $100,000 in mortgage amount at 8.5%, the monthly payments would be $768.91. During the 3rd quarter of 2000, 8 1/2% was the rate you would have paid. Borrow $100,000 today at the better 7 1/2% rate, and monthly payments would drop to $699.21.
So, why is it that just when we're hearing about high interest rates, you learn that it's a different story for home mortgages? Mortgage rates are based on “long-term” borrowing. The “prime” rate is based on the “short-term”. When you hear that the “Fed” is raising rates, as we have for the past year, it is the short-term rates to which they are referring.
If you have put off buying a home, wait no longer. Take advantage of excellent rates now, and your home investment will pay great dividends. Now is the right time to buy a home!
You've put aside an extra $125 to buy a new jacket you've seen advertised. You know how much you have to spend and it's in your pocket. Surprise! When you get to the store, you find that the jacket you expected to buy is priced at $175. Disappointment sets in, and you leave discouraged. You decide not to make a purchase after all.
Home buyers sometimes have the same experience – in reverse. They may know the price of homes which meet their requirements, but aren't sure how much they have to spend. That is to say, they aren't certain about the mortgage amount for which they qualify.
There's an easy solution which helps avoid discouragement and frustration. Most mortgage lenders will pre-qualify home buyers, even make a firm loan commitment, BEFORE their home search ever begins.
The lender simply takes an application, then verifies employment, credit information, and income. Using lending formulas, the mortgage company will issue a loan commitment up to the maximum mortgage amount for which the buyer qualifies.
With loan commitment in hand, buyers become a valuable commodity to sellers. What seller wouldn't want to know a prospective buyer had the funds to make a purchase? Being in a strong buying position, buyers gain greater strength in any negotiations which take place over price, terms, or other considerations. The result can be win-win for everyone.
Ever attempted to sell worn out furniture, an outdated computer, or a used vehicle? Imagine your reaction if a buyer made you a low offer, then asked you to refurbish and repaint the item, with no money down, and ten years of payments. Imagine further that the buyer wants you to hold the item for two months, while saving the money to make the purchase.
Home buyers sometimes make the mistake of proposing some convoluted variation of the offer mentioned above. They ask for the moon and stars, and receive a flat “NO!” from the sellers. By making their offer complicated, confusing, and sometimes downright offensive, these buyers make it difficult for sellers to reply with a simple “Yes!”
Planning to buy a home? Keep your purchase offer clean, simple, and pleasing to the eye. Leave out provisions which ask the seller to include personal property in the sale. Eliminate “subject to” provisions which leave doubts about the final outcome of the transaction. Keep price and terms easy to understand. Offer a substantial earnest money deposit to reinforce your commitment to completing the sale.
In short, make it easy for the property owners to understand your intentions. A clearly written offer to purchase is more likely to gain favor – and acceptance – from the sellers.
The result can be a satisfying, hassle-free, real estate transaction for everyone.
Is this the year you'll buy a home – or are you just dreaming? Although most home purchases begin as a dream, they actually occur as the result of a commitment – in fact, two commitments.
The dream phase is vital because it transforms the fantasies of the mind into a picture of reality. It allows a home to take shape in the imagination without cost, boundaries, or limitations. From the dream phase evolves the future home.
The commitment stage has two parts. First, a home purchase requires an emotional commitment. Those responsible must be confident that it is the right time to buy. They must have substantial reasons to begin the process, and they must be prepared to take the actions required to bring their dream to fruition.
The second commitment is financial. Buying a home requires cash for a down payment, creditworthiness to secure a mortgage, and the earning power to liquidate the debt. The confidence to make this commitment can be gained by visiting a mortgage lender. By analyzing your financial picture in advance, the lender can offer a loan commitment at a specific interest rate, giving you the buying power needed to make your purchase.
Make your dream a reality this year. Take the three steps: dream, commit, and commit. Before you know it, you'll be moving to a new reality. Really!
Imagine inviting your spouse on a long vacation. You take separate vehicles and meet at the travel agency to pay for tickets. On the way, you dream of lounging on the aft deck of a cruise ship. Your spouse's dream includes a mountain ski trip. You meet, credit card in hand, only to realize you should have talked it over first.
Homebuyers sometimes suggest a similar scenario. They call from a pay phone, and ask the real estate agent to meet them at an advertised home. Worse yet, they want to follow the agent from home to home in their own car. Few homebuyer dreams are ever realized in such a situation.
One essential detail in the home buying process is open communication – between the buyers and the agent. How else could the right home ever be identified in the maze of homes available.
Before the home search begins, it is vital that buyers and agent get together to discuss the range of possibilities, prices, styles, and locations. Without knowing the buyers' objectives, the agent could conduct a lifelong search for the right home – with no results.
Planning to buy a home soon? Start at the beginning – with a single phone call to the right agent. Share your plans, your financial qualifications, and your dreams – then be prepared to meet the perfect home for you!
Buy a home today and you may encounter several deadlines of importance. Included in any contract, the dates may or may not be critical to completion of your purchase.
Most offers to purchase (and contracts) require several dates to be added. For example, a closing date for completion of the transaction is a common one. There may also be a date by which loan application must be made, or a loan commitment obtained. To hasten sellers' response, you may add a clause which says “this offer to purchase will expire at midnight, three days from today's date.”
If a deadline is absolutely critical, the following phrase may follow the date: “time being of the essence”. Known also as a “drop-dead” date, it means what it says – the deadline MUST be met. While it seems like a great way to insure that deadlines are met, it can be a double-edged sword.
Consider that you ask for a closing on September 10th, “time being of the essence”. You will be flying in for the closing, but a hurricane closes the airport. Because you cannot make the closing, you are held in default, and may lose your deposit. Get the picture?
Dates should be kept, but often vary slightly from original intentions. Better to be flexible, than to box yourself into a date you cannot change.
In old movies and television shows, families are portrayed as having strong ties between parents, children, aunts, uncles and grandparents. Relatives seem to join together in close-knit unity, sharing their prosperity and giving each other emotional and financial support.
Today, there are still opportunities to return to the values shared in earlier times. Younger family members can be assisted with a down-payment on a first home. Others might benefit from “family financing” on their next home.
By making funds available to family members for down-payments and mortgages, parents, grandparents and other relatives can earn more favorable interest rates than their savings would normally earn. Such loans can be secured with a first mortgage providing financial protection for the lending family member.
If CDs are paying 3% and mortgage companies are charging home-buyers 7 1/2%, there is room for both the family borrower and family lender to benefit. By offering a 6% mortgage rate, the lending family member helps the borrower, while earning almost double the return available on savings.
Home ownership has historically provided a long-term increase in financial security. Secured loans from one family member to another can provide financial growth, strength and security, not to mention emotional satisfaction. Whether you are planning to buy, or have money to invest, talk to a family member first. Put your family ties to work for the good of the family.
Ever responded to an eye-catching ad for an attractive dress or suit? What if you drove to the store and found only one item in stock, in only one size? What if the price seemed high, yet you had no way to compare it with others? A ridiculous story? Of course, since most of us shop at stores with ample inventory in a variety of colors, sizes, styles and prices.
When buying a home, you could face that situation if you respond to a “by owner” advertisement. The owner has only one piece of inventory, a virtual “take it or leave it” situation making price comparisons difficult.
Look at home buying as a process, not a single act. It requires knowledge of your buying power, your ability to secure mortgage financing. You'll need a knowledge of the area, and your preferences as to size, style and features. Finally, you should be able to comparison shop, sizing up a number of fairly priced homes before making your decision.
To accomplish all steps in the home buying process, select a real estate agent to help locate the right home. The agent will lead you through the buying process, and locate a variety of suitable homes at fair prices. Because an agent can show you virtually any home being offered for sale, you only need the services of one.
What's the right price to pay for your next home? How can you be sure the price you are being asked to pay is fair? Who sets the price?
The asking price is set by the owners, and should be based on accurate information about other homes recently sold, as well as those for sale now. This information is helpful in establishing a price that is neither above nor below “fair market value”.
When priced at “fair market”, a home may sell quickly, and at full price. This occurs because buyers recognize the value offered by the home in relation to the price asked. There is often brisk competition among buyers for a home in excellent condition offered at a competitive price.
Buyers can determine whether a home is priced fairly using the same methods as an agent – by comparison. Establish criteria for your purchase, i.e. number of rooms, location, price range, square footage, etc. Once you know the parameters within which you will make your purchase, ask the agent to show you homes that match your list of features and amenities.
See a variety of homes, compare size, features and location vs. asking price. Certain homes will stand out because they offer added value for the price. Ask questions, compare, and your pricing concerns can disappear leading to the wise purchase of the right home.
Think back to the last time you purchased clothing. If you noticed a crooked seam sewn into a skirt or slacks, did you begin looking for other flaws? If a thread was hanging from a button, did you look at the other buttons too?
When buying a home, one small flaw may trigger suspicion that other unseen flaws exist. When the first impression is a silent doorbell, a smudged front door, and the odor of pets, buyers may suspect other parts of the home need attention too. Their inspection will be more meticulous, and the resulting offer (if there is one) may be well below the asking price.
When buyers see a home that reflects obvious â€˜pride of ownership', one that has no visible flaws, they are free to focus their attention on what it would be like to live there. They let their imagination run wild as they imagine the comfort the home will offer them.
It is not uncommon for buyers to offer two dollars less for every dollar in needed repairs. A $150 steam cleaning of carpets could easily eliminate the perception that carpet must be replaced at a cost of $2,200 (resulting in a $4,400 lower offer).
Give buyers every reason to pay full price for your home by taking “a stitch in time”. Then, enjoy an early sale at the best possible price.
What's so difficult about finding your next home? You look at 12 to 15 homes, make your choice, and you're finished. Right? Not so fast. Unless you have a photographic mind, it can be a nightmare trying to remember and compare all the different homes at day's end.
Before beginning, prepare a detailed list of features and amenities you hope to find. Make a checklist of those items down the left-hand margin of a legal pad. Across the top, write the addresses of the homes you will visit.
Simplify your search by taking along your digital camera. Take a complete set of photos – inside and out – of each home. Take notes too. For each home, place a checkmark next to the features you find and give each item a score from one to five. At the end of the day, do a quick visual check of your list and total the scores to see which home comes out on top.
With the list of properties narrowed to three or four, ask the agent to make appointments for a second visit. Prepare a list of questions for each home, and ask the agent to provide the answers.
After gathering the remaining information about each home, you will find yourself prepared to make an informed decision. That decision can result in a satisfying and rewarding home purchase.
Paying cash for your next home? If not, you'll be using “OPM” (other people's money), funds from a mortgage loan for a portion of the purchase price.
Until the 1940's, mortgages required a hefty down payment of fifty percent or more. Today, many different mortgage plans are available requiring little or no money down, and bearing interest at widely diverse levels.
Mortgages usually fall into two categories: “fixed” or “variable” rate. A fixed rate mortgage carries the same rate of interest; say for the entire payback period, often 30 years.
An adjustable rate mortgage has a lower rate initially, but can rise in later years based on certain money market factors. Adjustable rate mortgages (known as ARMs) may be adjusted up or down every one to three years throughout the life of the mortgage.
Most ARMs have a 2%/6% cap on the interest rate. This means that the rate can be increased only 2% during any one adjustment period, and no more than 6% over the life of the loan.
An ARM offers two primary benefits: 1) a lower initial interest rate with lower monthly payments, and 2) buyers often qualify for a larger mortgage because of the lower payments. A fixed rate mortgage offers a payment that remains constant over the life of the loan. Learn more about which mortgage would benefit you most.
Imagine walking into the darkened conference room of a real estate office and seeing a crystal ball in the center of the table. The agent's hands pass quickly over the sphere. It mysteriously lights up and there is the home of your dreams!
It's time for a reality check! There is no magic to finding your next home. It will take a lot of work and time by a dedicated agent to locate just the right home.
The first step is to pour out your heart to the agent you've chosen. Share every aspect of the home you want – the desired location, style, size, price, and more. Share every last detail of that special home as you have imagined it.
By sharing your objectives, you help the agent begin a comprehensive search among the many available homes, eliminating those that don't fit, while identifying those that do. The result can be a great selection from which to choose.
One way to narrow the search is by comparing each home with the one just before it, choosing just one or the other. In that way, you are comparing only two homes at a time, and mentally choosing one of them. Chances are good that when you've seen all available homes, your choice will be clear. There is no magic involved, just a sincere effort to turn your dreams into reality!