10 Things to Take the Trauma Out of Homebuying
| 1. Find a real estate agent that's simpatico. Homebuying is not only a big financial commitment, but also an emotional one. It's critical that the agent you choose is both skilled and a good fit with your personality |
| 2. Remember, there's no "right" time to buy, any more than there's a right time to sell. If you find a home now, don't try to second-guess the interest rates or the housing market by waiting. Changes don't usually occur fast enough to make that much difference in price, and a good home won't stay on the market long. |
| 3. Don't ask for too many opinions. It's natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision. |
| 4. Accept that no house is ever perfect. Focus in on the things that are most important to you and let the minor ones go. |
| 5. Don't try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to "win" by getting an extra-low price may lose you the home you love. |
| 6. Remember your home doesn't exist in a vacuum. Don't get so caught up in the physical aspects of the house itself—room size, kitchen—that you forget such issues as amenities, noise level, etc., that have a big impact on what it's like to live in your new home. |
| 7. Don't wait until you've found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers. |
| 8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don't leave yourself short and let your home deteriorate. |
| 9. Accept that a little buyer's remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits. |
| 10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually over from 1998 to 2002, a home's most important role is as a comfortable, safe place to live. |
Searching for Just the Right Property
In this age of Buyers searching the Internet, here are some pointers to help you seach - and understand - some Real Estate web sites:
| 1. When searching on Realtor.com - keep in mind that some listed properties are actually in Binder - or Pending Continue to Show (or PCS). They are still technically allowed to be shown, but it means that there's an accepted offer in process and the seller may or may not want to entertain further offers. Your Realtor will know for sure! |
| 2. Once the contracts have been signed on a listed property, Realtor.com removes it from searches and the property will no longer come up. It will also be removed from IDX (Internet Data Exchange) searches, but may remain on individual real estate agency's web sites. |
| 3. When searching different real estate agencies on the web, keep in mind that each individual agency web site can control their own listings (by adding words such as "Pending" or "Sold") on the pictures of their own listings, but the IDX portion of their web site is controlled by the information on Realtor.com and not each office. Confusing? You bet! But real estate laws require that a seller is able to offer their property for sale up intil the time that the contracts are signed. Your Realtor will know for sure! |
| 4. When conducting your own searches, provide your real etsate agent with either MLS numbers or prices or street addresses of the listings that interest you so that they may find out the most up to date information on those properties. |
| 5. The only web sites that are bound by agreement to be adjusted on a daily or weekly basis are the ones associated with Realtor.com (such as any IDX site). Individual real estate agency web sites may or may not be updated in that same timely manner. In all cases, call your Realtor for the most current information. |
5 Property Tax Questions You Need to As
| What is the assessed value of the property? Note that assessed value is generally less than market value. Ask to see a recent copy of the seller's tax bill to help you determine this information. |
| How often are properties reassessed and when was the last reassessment done? Generally taxes jump most significantly when a property is reassessed. |
| Will the sale of the property trigger a tax increase? Often the assessed value of the property may increase based on the amount you pay for the property. And in some areas, such as California, taxes may be frozen until resale. |
| Is the amount of taxes paid comparable to other properties in the area? If not, it might be possible to appeal the tax assessment and lower the rate? |
| Does the current tax bill reflect any special exemptions that you might not qualify for? For example, many tax districts offer reductions to those 65 or over. |
6 Creative Ways to Afford a Home
If your income and savings are making homebuying a challenge, consider these options.
| 1. Investigate local, state, and national downpayment assistance programs. These programs give loans or grants to cover all or part of your required downpayment. National programs include the Nehemiah program,http://www.getdownpayment.com, and the American Dream downpayment fund from the Department of Housing and Urban Development. http://www.hud.gov/news/release.cfm?content=pr02-014.cfm |
| 2. Get the seller to provide financing. In some cases, sellers may be willing to finance all or part of the purchase price of the home and let you repay them gradually, just as you do with a mortgage. |
| 3. Consider a shared-appreciation, or shared equity, arrangement. Under this arrangement, your family, friends, or even an third-party may buy a portion of the home and thus share in any appreciation when the home is sold. The owner/occupant usually pays the mortgage, property taxes, and maintenance costs, but all the investors' names are usually on the mortgage. There are companies that can help you find such an investor if your family can't participate. |
| 4. Get help from your family. Perhaps a family member will loan you money for the downpayment and/or act as a cosigner for the mortgage. Lenders often like to have a cosigner if you have little credit history. |
| 5. Lease with the option to buy. Renting the home for a year or more will give you the chance to save more toward your downpayment. And in many cases, owners will apply some of the rental amount toward the purchase price. You usually have to pay a small, nonrefundable option fee to the owner. |
| 6. See if you can qualify for a short-term second mortgage to give you the money to make a higher downpayment. This may be possible if you have a good income and little other debt. |
Common Closing Costs For Buyers
The lender must disclose a good faith estimate of all settlement costs. A check to cover your closing costs will probably have to be a cashier's check. The title company or other entity conducting the closing will tell you the required amount for:
- Downpayment.
- Loan origination fees.
- Points, or loan discount fees you pay to receive a lower interest rate.
- Appraisal fee.
- Credit report.
- Private mortgage insurance premium.
- Insurance escrow for homeowners insurance, if being paid as part of the mortgage.
- Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
- Deed recording fees.
- Title insurance policy premiums.
- Survey.
- Inspection fees—building inspection, termites, etc.
- Notary fees.
- Prorations for your share of costs such as utility bills and property taxes.
- Contact White Fence - the leading online shopping comparison marketplace for consumers to compare and connect their essential home services, including phone, TV service, high-speed Internet, electricity, and more!
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What To Keep From Your Closing
- The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You'll need for income tax purposes and when you sell the home.
- The Truth in Lending Statement summarizes the terms of your mortgage loan.
- The mortgage and the note (two pieces of paper) spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
- The deed transfers ownership of the property to you.
- Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.
- Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association's rules and restrictions.
- Insurance policies provide a record and proof of your coverage.
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