12 Tips for Buying a Home

Here are 12 tips to help you become your own landlord.

1. Hire a real estate professional.
   The first step is to select a professional to help you find your dream home and fine-tune your financial expectations. Working with a buyer agent is worth consideration since he or she is legally responsible for representing the buyer's interest in a real estate transaction. Before making a decision, however, have a REALTOR  explain the pros and cons of using a buyer agent versus a sales or dual agent. Your RE/MAX Associate can guide you through every step to buying a home.
    
2. Shop for mortgage types, rates, and terms.
   Choose a mortgage that's right for you. Shop first and compare. A difference of even half a percentage point can make a huge difference in how much you pay over the life of a loan.
   
   Example: The difference in the monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent is about $35 per month. Over 30 years, that's $12,600.
   
   Make sure your lender gives you a "Truth In Lending Disclosure." This statement provides information about the proposed loan, such as annual percentage rate (APR), total payments, late payment charges, prepayment penalty, and assumption options.
   
   Also obtain a "good faith estimate" of closing costs. This estimate gives you a rough idea of the fees the lender will charge you when you apply for a loan.
   
   To help home buyers better understand their loan terms and reduce consumer settlement costs, HUD has introduced a proposed rule to the Real Estate Settlement Procedures Act  (RESPA). (Brian Sullivan, March 14, 2008, HUD)
    
3. Pre-qualify for a loan.
   Your third step should be to get pre-qualified, which determines how much you can afford. It allows you to move swiftly when you find the right home, especially when there are other interested buyers. It also indicates to the seller that you are serious and really can afford to buy the property.
    
4. Define what you want. Your home search.
   The next step is to create a realistic idea of the property you'd like to buy. What features are most important to you? Make two lists: one of the items you can't live without and one of the features you would enjoy. Refine the lists as you house hunt. It is also helpful to search online to see what is currently available on the market. Your real estate professional can then show you homes that meet your expectations.
   
   Your RE/MAX Valley professional can show you how to receive daily updates of all homes meeting your criteria that are added to the Multiple Listing Service.
    
5. Visit properties.
   Now you're ready to visit houses. Call your RE/MAX Associate to arrange showings, and keep track of the properties you've seen.
    
6. Know the features that help or hurt resale.
   In some areas, a swimming pool actually detracts from a home's value and makes it harder to sell. In neighborhoods with two-car, attached garages, a single-car or detached garage may impact the home sale and future value. Your RE/MAX professional can point out features that hurt, and those that help, resale value.
    
7. Rate the houses you tour.
   After touring each home, write down what you liked and didn't like. Develop a rating system that will help narrow the field down. For example, pick the house you like best on day one and compare all other houses to it. When you find a better one, use the new favorite as the standard. (Here's a sample chart to print out.)
    
8. Make an offer.
   Once you've pinpointed your dream house, it's time to get serious about the financial and contractual side of the purchase. Your RE/MAX Associate will be a strong advantage since you and the seller have different goals. He or she can advise you as to offering price, earnest money, contingencies,  fixtures to be included in the sale, as well as other special conditions of the sale.
   
   The purchase offer typically includes contingencies. Contingencies are conditions that must be satisfied for the transaction to move forward and are included to protect you. Common contingencies are for mortgage approval, appraised value, home inspection, or the sale of another property.

   See also: 

   1. Buying Your Home - Making an Offer
   2. Buying Your Home - What's the difference between furnishings and fixtures.
      
       
9. Arrange for a home inspection.
   After your offer is accepted, its time to get professional certified opinions as to the value (appraisal) and condition (inspection) of the home.
   
   Your lender will usually arrange for the appraisal; while you should set up a home inspection. It's common to find problems, including leaky roofs, cracked walls, insect infestations and foundation problems. Your real estate professional can help find a reputable inspector, and will negotiate to get you the most for your money once the inspector's report is final. If you negotiate repairs as part of the purchase, ask for a "walk through" before finalizing the paperwork.
   
   Other inspections to consider are tests for radon gas, toxic mold, and lead-base paint, as well as a termite inspection.
   
   You can also protect yourself with a homeowner's warranty. A homeowner's warranty is especially useful when buying an older home or one that has been vacant for some time. Ask your real estate expert about home warranty plans, which may save you money in the near future.
    
10. Close.
    Before your closing date, make sure you've made all necessary deposits and completed the paperwork - including mortgage, title, homeowners insurance and any other paperwork required by local or state governments. The date to close as specified in the contract is important. Your contract with the sellers expires on that date and should you not close, the seller could walk away from the sale.
    
    A second date that often gives buyers, sellers, and agents alike more fits than any other is the date of possession. Remember that what is written into agreed upon contract is the law. It cannot be changed without the written permission of both sides. A seller, especially one that was hit hard during the home inspection and had to pay for many repairs, may not be willing to change that date no matter how important it is to you.
    
    The day the seller gives you the keys should be uniquely specified if it is important that you have possession on or before that date. A  date specified as '30 days after closing' may ultimately fall outside of your time schedule.
    
    In the end, most of this work will be done for you by your real estate agent, lender, and escrow officer all working together to bring your new home to a successful close.
     
11. Prepare for life in your new home.
    Before rolling out the welcome mat, consider some moving basics: arranging for an alarm company, turning on electricity, water and gas, cleaning or replacing the carpet, and notifying your local post office of your new address. The best time for renovations is often before you move in.
     
12. Real Estate Terms you should know.
    Here are 21 terms you should know as a home buyer.

See Also:

• First Time Buyers Start Here
• RE/MAX Valley Real Estate Offers Tips For Buyers & Investors
• High Tech Online House-Hunting Cuts Time and Effort
• Review Documents; Protect Yourself from Excess Charges
• Securing a Mortgage; Don't Bite Off More Than You Can Chew
• Real Estate Guide: Home Buyers