You may be a first time home buyer or you could have bought and sold many homes throughout your lifetime. Regardless of your experience as a homebuyer, you need to be aware of the top 10 essential tips when you’re buying a property.
1. Buyer’s Agent – Find an agent that is experienced in working with buyers like you. If you’re a first time home buyer there are loan programs and tax incentives that the agent can introduce to you. Also you may not understand the nuances of buying a home and will require additional explanation of the process and “hand holding”. Investors will need a buyer’s agent that is familiar with real estate trends and income potential.
2. Lender – Find a loan officer and lender you are comfortable with and you can trust. Be aware that if it sounds too good to be true than read the fine print. If you are comfortable working with a lender but you find a better rate elsewhere, give the lender the opportunity to match the best terms and rate. Make sure your lender gives you a good faith estimate or GFE that includes factors such as property taxes, local area assessments, home owner association fees and community fees if they apply. If a rate is substantially lower than the competition, the lender is most likely charging you points or additional fees to lower the rate.
3. Location – You can change a home but you can’t change it’s location. First time home buyers are often enticed to buy a larger nicer home in a less desirable location. Take into consideration your lifestyle and the benefits of being close to amenities. An hour commute may not be worth it to have a granite countertop.
4. Trust your gut – If you walk into a home and it doesn’t feel right there’s a reason, it’s not the right home for you. Make sure your house or condo feels like home.
5. Disclosures – You must read all of the disclosures that are provided by the seller. If you don’t understand something or it’s ambiguous, than get an explanation. Disclosures are not be taken lightly, they are the number one reason for real estate related law suites.
6. Understand your market – Like any big purchase you need to do your research. Knowledge is power in real estate, and each local market can be very different. If you’re relocating in to a different market than have an understanding what your purchasing power is. Your dollar will go a lot further in purchasing a home in Fort Knox, Kentucky than in San Francisco, California.
7. Due diligence – This simply means you must investigate every aspect of the property that is of importance to you now and down the road. A seller is obligated to disclose everything that they know, but what about the issues they aren’t aware of. For example, if the crime rate is important to you than contact local law enforcement to get crime stats. If you’re concerned about the schools, than research the specific schools in the neighborhoods you’re interested in. Use your buyer’s agent to help facilitate this process. You may want to also check with your insurance agency to make sure your prospective home is insurable before you close. There are reports you can order called CLUE reports (Comprehensive Loss Underwriting Exchange) at a minimal cost that will show all insurance claims over a specified period of time.
8. Negotiate intelligently – When you understand your market it helps you significantly in the negotiation process. Ask your agent for comparable sales in the area so you have a reference point for what a good deal is. If you get 10 percent off a home that is 20 percent over priced it’s not a very good deal, but if you pay list on a home that is priced 10% under market value than you’ve done well.
9. Home inspection – Always get a home inspection by a reputable professional. No exceptions! It doesn’t matter if it’s a bank owned home, short sale, new construction or resale. Get a home inspection. Once you have had an inspection than evaluate whether you are willing to do the repairs, you want the seller to do the repairs or if it is beyond repair and you need to look for a new home.
10. Home warranty – People tend to associate home warranties with new homes. You can get a home warranty for practically any home. They are well worth the small investment and you may be able to negotiate this item in your offer so you can have the seller to pay for it. There’s nothing like having peace of mind when you move into a new home.
Most importantly you want to make sure that you are working with services that have your best interest in mind. That way your agent, your loan officer, your title officer, your inspector, and escrow officer (depending on your state) are all working for you to make sure you make a sound purchase that you are happy with. Buying a home needs to be an exciting and positive experience so make sure you have the right team working for you so you can minimize the headaches.
