Tips for Buying a Home
Buying a home is one of the largest purchases a person will make in their lifetime. Therefore being properly educated is key when making your decision. Here are some tips to help you make and informed decision.
- Paying too much for you home
- Finding and Purchasing the Right Home
- Making House Hunting Fun
- Wrong type of neighborhood
- Too much of a fixer-upper
- Buying outside of your Budget
- Over or Underestimating Your Housing Needs
- Overlooking Schools and Children
- Municipal By-Law Restrictions
- Looking for Structural Defects
- Closing Your Transaction
- Home Buyers Wish List
Without the aid and assistance of a professional Real Estate Agent, purchasers often pay far more than fair market value. It is not uncommon to hear horror stories where thousands of dollars were wasted because the market was unknown.
Market areas differ - what you sold your last home for does not necessarily equate to equal pricing structures in your new neighborhood. Your Real Estate Agent will know what is locally considered good value for investment dollar. If you are relocating to a new city, engage the services of a local Real Estate Agent who intimately understands the fluctuating market trends and will provide a comparative market analysis on the home you wish to purchase.
Finding and Purchasing the Right Home
Once you've decided to make a move, how do you go about it?
When it comes to the largest purchase in one's life, the key phrase is "you'd better shop around". Don't settle on the first home you see. We as Real Estate Agents have honesty, integrity, market knowledge and experience, and our expertise will be a tremendous help as you consider your home purchase.
Some of the things you need to consider when buying a home. The neighborhood and the market values. The schools, transportation and shopping available. Specific home features you may require. Local traffic and commuter patterns for work.
There's no shortage of information available to help you make an informed purchase decision. Take the guesswork out of shopping for a home by taking advantage of all the professional resources available to guide you through the many choices available when purchasing your first home. We will be able to find listings for you, based on your wishlist. But don't stop there! You can do your own looking, and then ask us to show you the house. Start with our Property Search. Pick up real estate flyers at local grocery stores and convenience stores. Read the real estate sections of your local newspaper. Drive around neighborhoods that interest you and write down addresses where there are "for sale" signs. Go to open houses. Try everything!
Buying a home? look at the neighborhood
Once you locate a home that appears to fit everyone's needs, take a second look! If you originally viewed the property on a weekend, drive by during weekday rush hour. Check with the local municipal authorities to see if a major highway plan is in the works - one that will produce a backyard oasis of incessant noise. Investigate airport extensions and shopping center improvements. Heavy traffic blaring into your quiet serenity can destroy your solitude.
Consider your outdoor lifestyle. Do you hold family barbecues, enjoy sitting outside, or invite family and friends to vacation with their recreational vehicles in your backyard? In many cases, excessive traffic noise can hamper a quiet conversation by the creek. You many also find out for the first time just how lightly you sleep. There are also the potential toxic fumes leaking from vehicle exhaust. Do you want your children and yourselves breathing this in? It may take only a month or two to realize the grave mistakes you've made.
Buying a home that is too much of a fixer-upper is a common mistake. You've heard the stories or maybe even made the comments yourself, "It's only superficial, and It won't take too much money to fix that, we can renovate on the weekends, or I didn't realize it would consist of hiring a structural repair artist." Nightmares happen when you take on more than you can handle.
Purchasing a fixer-upper can equate to replacing everything and still ending up with a very expensive brand new old car! Understanding what types of repairs a home needs and the potential cost and time required for each of these repairs is essential for making an educated purchase.
We are all familiar with more funds going out than what is coming in. Kids these days always want the best regardless of whether they can really afford it or not. It is easy for a Real Estate Agent to nod their head and make the quick commission, fully realizing that one-year later when the marriage is on the rocks that they will be earning another commission as the property is on the market again.
Careful budgeting is the order of the day! First time purchasers be warned that it is very easy to buy beyond your means, as you count on dual incomes until the new baby arrives. It is better to buy the home you need and con comfortably afford than experience being forced to sell and buy down. House rich and cash poor is not the way to experience life!
On the opposite end of the scale is purchasing a home that offers less function and feature than what you really need. Inevitably, you will end up purchasing the right home and have to bear the cost of reselling and moving again.
Over or Underestimating Your Housing Needs
A $10,000+ mistake can occur when you purchase with only the immediate timeframe in mind. You opted for no family room, and three months later are delighted to learn your first child is on its way. Or your children all leave home in the same year and now you find yourself rambling around in empty rooms! On the other hand, when parents downsize too early, they find their adult children have rebounded with a few extra additions! Consider all your options carefully. Saving your hard earned money is a definite plan!
Try using our wish list to help you identify the features you need.
Overlooking Schools and Children
A critical error you can make it to forget about the needs of your children. Is your new home close enough for the children to walk to their new school, is there bus service just down the street, does the school offer academics suitable to your children's needs, or is it right next door and you've reached a point in your life where you would prefer quiet solitude?
Caught up in the passion of your new home, it is easy to overlook and undermine these questions. After six months of taxiing your children to and from school, you may find yourself experiencing the need for more freedom. By graduation, your children may find that had they attended another secondary school, the university prerequisites would have been fulfilled. You may thoroughly enjoy sitting alone in your private backyard only to find recess noise and the school's outdoor gym activities hamper your need for solitude. Determine the answers with your Real Estate Agent before signing on the dotted line!
Educate yourself! Consult with your Real Estate Agent and local municipal authorities to learn of any abnormalities and restrictions that apply to the property. Do you intend on converting the basement into an in-law suite? Can you run your commercial business from home? Is there a senior's residence next door that prohibits noise after 9:00 p.m.? Can you park your recreational vehicle in that three-car driveway?
Looking for Structural Defects
Consider an independent home inspection. Careful examination by a professional will remove all doubt! Is that tiny crack in the foundation a repair nightmare or merely settlement? Are the walls infested with termites? Does your budget have room for thousands of dollars in reconstruction costs? For a few hundred dollars you can obtain an extensive inspection report that will point you to any structural defects in the building. Ascertain the cost of repairs prior to entering into a binding contract. Write your purchase contract subject to a satisfactory home inspection so you can renegotiate if the repairs are beyond your current budget. Or opt for another home more suitable to your needs.
Closing Your Real Estate Transaction
Occasionally the closing date will be jeopardized just days prior to settlement. Arrange a 60-day locked-in interest rate at application time. Homeownership is the largest single investment you will most likely make during your life. It's in your best interest to be educated. Pay close attention to every detail and you will win at the real estate game. Your Real Estate Agent's responsibility is to make sure you succeed by avoiding the top sixteen errors purchasers most commonly fall prey to. After all, your Real Estate Agent's reputation depends on referrals generated from 100% client satisfaction!
Mortgage fees
Administrative fees
Application fees
Appraisal fees
Survey fees
Loan origination fees
PMI
Points
Title Insurance
Credit report cost
Future interest payments, depending on the loan terms
Title fees
Title transfer fees
Recording fees
Additional state or local taxes (could include property taxes)
Insurance
Homeowner's insurance
Flood insurance, if required by law
Other professional fees
Attorney fees
Escrow company fees
Closing company fees
Key Closing Documents You'll Receive
HUD-1 Settlement Sheet
This itemizes the services provided and the charges to the buyer and the seller. You should be allowed to review this form shortly before your closing meeting so you know your closing costs in advance.
Truth-in-Lending (TIL) Disclosure
You should be mailed your initial TIL disclosure within three business days of applying for a home loan. It outlines the costs of your loan and discloses the annual percentage rate (APR) and other terms of the loan, including the finance charge, the amount financed, the payment amount and the total payments required. Since it's possible that the APR calculated at the time of your loan application will change a little before closing, your lender is required to give you the final version of your TIL disclosure at or prior to the closing meeting.
Deed of Trust or Mortgage (also known as the Security Instrument)
These documents convey a lien in your property as security for repayment of your home loan. (This means that if you default on your loan, your lender has the right to foreclose your ownership interest and take possession of the property.)
The Note
The mortgage (or promissory) note represents your promise to pay the lender according to the agreed terms. It includes the dates on which your home loan payments must be made and the location to which payments must be sent.
Home Buyer's Wish List
Location
- What part of town (or country) do you want to live in? ______________________________
- Do you want to live in an area with a Community Association? yes___ no____
- Community Amenities:
- Shopping near by
- Fitness Center / Gym
- Community swimming pool
- Golf course
- Basketball court
- Tennis courts
- Clubhouse/activities
- Gated community
- Do you need access to schools? yes___ no____
- Do you have to be close to public transportation? yes___ no____
General Home Features
- What price range: Min:_________ Max:________
- Type of House?
- One story
- 2 story
- Townhouse
- condo
- mobile home
- What age range are you looking for ? _______
- What style house appeals to you most?
- Contemporary
- traditional
- southwestern
- colonial
- no preference
- How much renovation would you be willing to do? ______________________
- Do you have any animals that will require special facilities? yes___ no____
- If so, what? __________________________________
- The Lot
- Large yard (1 acre or more)
- Small yard (less than 1 acre)
- Fenced yard
- Garage Carport
- Patio/deck
- Pool
- Outdoor spa
- Extra parking
- Other buildings (barn, shed, etc.) ______________________________
- Special view of what? ____________________________________
The Interior
- How many bedrooms: must have?____ like to have? ____
- How many bathrooms?_____
- How many square feet? Min:_______ Max:______
- Features of the House?
- Eat-in kitchen
- Separate dining room
- Formal living room
- Family room
- Separate den or library
- Full Basement
- Laundry room
- Workshop
- “In-law” apartment
- Spa in bathroom
- Air conditioning
- Fireplace
- Floors:
- Wall-to-wall carpet
- Ceramic tile
- Hardwood floors
- No interior steps _____
- Lots of windows (light) _________
- Special Features? ___________