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Here are some helpful pointers to keep in mind when you buy your home.
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1. What are the advantages of using a REALTOR to help me
buy a home?
More than 2 million people in the United States have earned real estate licenses.
However, real estate is a tough business with a steep dropout rate, and the result
is that only a small percentage of those with licenses actively help buyers and
sellers.
The National Association of REALTORS® (NAR) includes 1 million brokers
and salespeople, individuals bound together with a strong Code of Ethics, extensive training opportunities and a wealth of community information.
Buying and selling real estate is a complex matter. At first it might seem that by
checking local picture books or online sites you could quickly find the right home
at the right price.
But a basic rule in real estate is that all properties are unique.
No two properties -- even two identical models on the same street -- are precisely
and exactly alike. Homes differ and so do contract terms, financing options,
inspection requirements and closing costs. Also, no two transactions are alike.
One clear advantage of enlisting the help of an agent is that you don't have to
"go it alone." A good agent has the training, the know-how, and the experience
to help you through each step of the process, and make the process of finding,
buying and moving into your new home as smooth, quick, and enjoyable as
possible. Another advantage is that an agent represents a valuable source of information about market trends, communities and neighborhoods, and especially, homes for sale throughout the area. Remember, not every home seller runs an
ad in the local paper or puts a sign up in the yard. In fact, many homes actually
sell before there is ever a need to advertise them. An agent offers you market expertise augmented by access to complete, regularly updated information
about every home listed by area agents through the Multiple Listing Service (MLS).
In this maze of forms, financing, inspections, marketing, pricing and negotiating,
it makes sense to work with professionals who know the community and much more. Those professionals are the local REALTORS® who serve your area.
2. Where do I begin the process of looking for a home?
The first thing you should do is focus on what you're looking for in a home.
You can start by establishing priorities in the following three areas:
Location
Are you relocating to a new town because of a new job, or to be closer to
your current job? How will the location of schools, shops, and transportation
affect your choice of neighborhoods?
Personal tastes
How large a home do you need? What style of architecture do you prefer?
On what kind of lot? Depending on where you live, you may have a choice
of homes in dozens of styles, sizes, and settings.
Budget
How much home is wise for you to own? As you consider these areas, do
a little research of your own. Look through magazines for ideas about home
styles and features. Drive through neighboroods that appeal to you to see
what's available. Read the real estate listings in the newspaper to learn
about current prices in the areas you're considering. Talk to friends about
the features that you'd really like to have in your home. The more
knowledgeable you become, the better your final decision is likely to be.
3. Get Pre-approval
REALTORS® routinely suggest that consumers start the mortgage process
well before bidding on a home. By meeting with lenders -- either online or face
to face -- and looking at loan options, you will find which programs best meet your
needs and how much you can afford.
REALTORS® also recommend pre-approvals
for another reason: Purchase forms often require buyers to apply for financing within
a given time period, in many cases, seven to 10 days. By meeting with loan officers
in advance and identifying mortgage programs, it won't be necessary to quickly find
a lender, check credit, and rush into a financing decision that may not be the
best option.
"Pre-approval" means you have met with a loan officer, your credit files have been
reviewed and the loan officer believes you can readily qualify for a given loan amount
with one or more specific mortgage programs. Based on this information, the lender
will provide a pre approval letter, which shows your borrowing power. You can visit
as many lenders as you like and get several pre-approvals, but keep in mind that
each one carries with it a new credit check, which will show up on future credit reports.
Although not a final loan commitment, the pre approval letter can be shown to listing brokers when bidding on a home.
It demonstrates your financial strength and shows that you have the ability to go through with a purchase.
This information is important to owners since they do not want to accept an offer that is likely to fail because financing
cannot be obtained.
4. How can I find out what homes are selling for in a given
neighborhood?
In most areas, home sales are a matter of public record -- you can get all the
information you want about recent sales, including prices and listing times, by
calling the county Recorder of Deeds.
An easier way is to ask your real estate agent. If you're interested in a particular
home, an agent may be able to provide you with a list of comparables -- sale prices
of homes in your area that are roughly the same size and age as the home you're considering. Although there will certainly be some differences between the homes
-- the house next door may have an extra bedroom, or the one down the block
may be older than the one you're looking at -- it's a good way to evaluate the
seller's asking price.
5. Real estate listings and ads seem to have a language all
their own. What do all these abbreviations mean?
Abbreviations are a necessity in real estate advertising because so much
information must be communicated in so little space. Here are some
common abbreviations and their meanings:
BA |
bath |
FSBO |
for sale by owner |
blt |
built-in |
gmt kitchen |
gourmet kitchen |
BR |
bedroom |
ingrd pool |
inground pool |
brk |
brick |
LR |
living room |
bkporch |
back porch |
mstr |
master bedroom/suite |
bldrs redo |
builder's renovation |
mtg |
mortgage |
CAC |
central air conditioning |
pvcy fence |
privacy fence |
DR |
dining room |
scc sys |
security system |
dk |
deck |
scrnd porch |
screened porch |
FHA/VA |
qualifies for FHA/VA financing |
TH |
townhouse |
fin ll |
finished lower level |
txs |
taxes |
fml |
formal |
wbfp |
wood burning fireplace |
fpl |
fireplace |
w/o |
walk-out |
FR |
family room |
u/g sprk |
underground sprinkler system |
FROG |
finished room over garage |
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6. How do I know I'm getting the best value for my money?
A professional appraisal is the best way to tell if a home is priced fairly.
A real estate appraisal is an unbiased opinion of a property's value based
on its style and appearance, construction quality, usefulness, and other
factors, including the value of comparable properties nearby. When you
apply for a mortgage, the lender will have a professional real estate
appraiser perform an appraisal of the property.
7. I'd like to have a professional look at the home before
I buy it. What does a home inspector do?
For your own safety, and to make sure you're getting your money's worth in the
home you choose, using a professional home inspector is highly recommended.
A home inspector will check a home's plumbing, heating and cooling, electrical
systems, and look for structural problems, like a damp or leaky basement.
Usually, you call an inspector immediately after you've made an offer on a
home. However, before you
sign any written offer, make sure, or have your
attorney make sure, that it includes an inspection clause or other language
which says that your purchase obligation is contingent on the findings of a professional home inspector.
Your home cannot "pass" or "fail" an inspection, and your inspector
will not tell you whether he or she thinks the home is worth the money you are offering. The inspector's job is to make you aware of repairs that are recommended or necessary. A seller may be willing to renegotiate a price to accommodate
needed repairs, or you may decide that the home will take too much work and money. A professional inspection will help you make a clear-headed decision.
In choosing a home inspector, consider one that has been certified as a qualified
and experienced member by a trade association. Your real estate agent may
refer you to qualified inspectors in your area.
8. How do I determine the amount of my initial offer?
There is really no rule to use in calculating a realistic offer. Naturally, the buyer
wants the best value and the seller wants the best price, but negotiations can be influenced by many factors, such as a seller who may be changing jobs and wants
to sell quickly, or a buyer who really wants a specific home.
After you've looked at the home's features, asked questions, checked comparable home prices, and talked about it with your agent, you should have a good idea of what the home's value is in the current market. Consider what you can afford, and make an offer that you consider to be fair.
Most buyers and sellers negotiate on price, with both sides "giving" a little until both agree.
9. What will happen on closing day?
- The lender's representative will ask for your paid home insurance policy.
- The agent will list the adjustments. These include the money you owe
the seller (the remainder of the down payment, prepaid taxes) and what
the seller owes you (unpaid taxes, prepaid rent).
- You will sign the mortgage. This gives the lender legal rights to the
property if you don't make your payments.
- You will sign the mortgage note which is the promise to repay the
loan in regular monthly payments.
- You will get title from the seller in the form of a signed deed.
- The lender's representative will collect the closing costs from you and
give you a settlement statement of all the items you have paid for.
- The deed and mortgage will be recorded in the town or county
Registry of Deeds.
10. Moving Tips
If you are like most people, you probably view moving as an unpleasant, stressful and time-consuming experience which often results in broken dishes and sore muscles. With a little care and planning, you and your belongings will both arrive at your new home in mint condition. The checklist below will help you prepare for your move.
- Purchase/Gather Packing Supplies. If you are a do-it-yourself mover, you
will need to gather packing materials including boxes, tape, scissors, bubble wrap, packing peanuts, newspapers and blankets. The produce department
at your local grocery store is a good source for large, sturdy boxes for your
non-fragile items. Your local beer store is also a good source for small boxes.
The boxes that wine bottles come in are great for packing glasses and stemware since they come with cardboard dividers. Suitcases and gym bags are also good options for packing clothes, shoes and other items.
- Discard, Sell or Donate Unwanted Items.
Go through each room of your
house and sort through your belongings. Place all of the unused items into
one of three piles - (1) Discard, (2) Sell, or (3) Donate. This will force you to
do the cleaning you’ve probably been putting off and will result in fewer items
to pack. Throw out the items in the “discard” pile. Hold a yard sale to get rid
of the items you want to sell. Another option is to post unwanted items on www.craigslist.com to sell. After the yard sale is over or a designated time
has passed when items do not sell online, gather the items that did not sell,
add it to the pile of items to “donate” and give it all to charity. Most donations
are tax-deductible.
- Begin Packing.
Many people wait until the last minute to start packing.
You can make packing easier by doing it a little at a time. Get a head start
by boxing items that are not frequently used such as books, linen, and
seasonal clothing. Pack one room at a time and try not to mix items from
different rooms in one box. Pack heavy items such as books in small boxes.
Pack clothes in wardrobe boxes to save ironing time later. Clearly label each
box, including the Room it goes in and a brief description of the contents.
- Change Your Address.
Contact the post office with your new address and
the date it becomes effective. Address changes can be done online simply
by going to the U.S. Postal Service website. Remember to contact your employer,
creditors, banks, insurance carriers, newspapers, magazines, physicians, and
schools with your address change. Do not forget to change your address with
the Motor Vehicle Administration.
- Notify Family and Friends.
Inform your family and friends of your new
address (and phone number, if applicable).
- Clean Your Old Residence.
Leave your old residence as you would like
to find it. Vacuum the carpet, sweep & mop
the floor, wipe off counters and
stoves, clean sinks, tubs and toilets, and wipe out
the refrigerator. Be sure
to double-check cabinets, drawers, closets, storage rooms,
the washer and
dryer, and the refrigerator to make sure nothing is left behind before
you leave
the house for the last time.
- Prepare Moving Day Kits.
Since the majority of your property will be in boxes,
it is important to remember
to set aside the items you will need on the day of
the move. This should include
a change of clothes, a towel, prescription drugs, toothbrush and toothpaste,
toilet paper, and your toiletries. You should also set aside moving-related
items such as tools, scissors/utility knife, tape, trash bags, paper towels,
a flashlight, a first aid kit, and aspirin. Other items to have handy
on moving
day include paper plates, plastic utensils and cups, snacks and beverages.
Tax-Deductible Moving Expenses
If your move is job related, many of the expenses connected with
moving \
may be tax deductible*. Some of these include:
- The cost of moving your household goods.
- Expenses incurred while house-hunting.
- Travel expenses during the move for you and your family.
- The cost of moving your household goods.
- The cost of meals and temporary lodging for up to 30 days after
you get the new job.
- The expenses, of selling your house and buying a new one.
To substantiate your claim, keep an accurate, detailed account of your
moving expenses, including all receipts.
* It is recommended that you consult with your own tax advisor or attorney
to determine what is currently allowable under IRS codes specific to your
individual circumstances.
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