Buyers - Updates
BUYING YOUR HOME
Buying a Home is a Serious Financial Commitment. The Information Here Will Help You With Purchasing Questions and Help "YOU" Make Sound Decisions!
When Thinking About Buying Your First or Next Home PRE-QUALIFY First and the Rest is Downhill
3 Factors That Reduce a Home's Value Buyers learn of unfortunate home defect from neighbors, Realtor should've known better Why home purchases fall apart at last minute
Don't Decide on Mortgage Until Knowing All Fees Home Buyers: There's More To Purchase Offer Than Price Home Inspectors Avoid Asbestos Like The Plague Most Buyers Better Off With Mortgage Insurance Top Home-Buying Mistakes Revealed Before You Start Looking For Your New Home Buying a home is an exciting time in one's life Closing Costs to Expect As Your Agent, I Will
3 Factors That Reduce a Home's Value (Part 1 of 2)
3 Factors That Reduce a Home's Value (Part 1 of 2)
By: Lisa Scherzer, www.smartmoney.com
Before plunking down your hard-earned life savings on a home, consider the fact that the current owners -- and perhaps even the home inspector -- probably can't tell you everything you need to know about the property. Issues such as nearby foreclosures, crime rates, and environmental threats can end up costing a lot more than mold in the basement. Living close to a landfill, for example, can knock up to 15% off a home's value.
While sellers in some states are legally obligated to disclose information they know that might affect a buyer's decision to purchase a home, they often won't be aware of the fact, say, that a registered sex offender moved in across the street last month.
Ultimately, it's up to buyers to look into factors that go beyond the front yard, says Leslie Sellers, vice president of the Appraisal Institute, a Chicago-based trade organization. "People will spend days and weeks researching a used car and kicking tires, but when it comes to a home, if the decor suits them, they're ready to buy right then," says Sellers.
"Before you make an offer, walk the neighborhood and talk to neighbors," advises Sid Davis, a Farmington, Utah-based real estate broker and author of "A Survival Guide for Buying a Home."
Here are three value-draining factors in real estate worth investigating:
Foreclosures
Just a few years ago, home buyers barely considered the impact of foreclosures on a home's value. But as the rate of foreclosures climbs ever higher -- the number of homes facing foreclosure in April rose 65% year over year, according to RealtyTrac -- it's now an undeniable part of the value equation.
A study co-authored by Geoff Smith, vice president at the Woodstock Institute, a policy group in Chicago, found that each foreclosure within an eighth of a mile of a single-family home results in a 0.9% decline in the home's value. Although the research only looked at data in Chicago between 1998 and 1999, the researchers contend that the overall findings still apply today. "If you were to replicate that study now, you'd probably find a bigger impact because there are currently more foreclosures, and they're bringing down the housing market overall," says Smith.
Foreclosed homes often fall victim to neglect and vandalism, explains Stephen Fuller, director of George Mason University's Center for Regional Analysis. A concentration of foreclosed homes only magnifies the effect and undermines nearby property values, he says. Depending on the scale and duration of the problem and the lack of countervailing forces such as good schools or park land, the damage to a home's resale price will likely be significant, says Fuller.
For nationwide listings of homes in foreclosures, you can visit web sites such as RealtyTrac.com, Foreclosures.com, and Foreclosure.com or check in your local Multiple Listings Service with your Realtor.
Also, scan the real estate listings to see if a large number of homes are for sale in the area or if rental properties are on the rise. It could signal a more transient -- and therefore troubled -- environment, Fuller says. Also, look for short sales – situations in which the asking price is actually less than the mortgage balance. "That's a sure next step to foreclosure," he says. Buyers can ask their Realtors to look up short sales in a particular ZIP code or area. (Realtors have access to the data, which is provided by the Multiple Listings Service that is usually not made public).
By: Lisa Scherzer, www.smartmoney.com
Buyers learn of unfortunate home defect from neighbors, Realtor should've known better
Realtor should've known better
Buyers learn of unfortunate home defect from neighbors
By Barry Stone, Tuesday, June 3, 2008.
Inman News
Dear Barry.
We bought a home from a family trust. The previous owners had died, and their adult children were selling the property. As trustees of the estate, they were not required to disclose any defects. But a major ground drainage problem was revealed after we moved in, and we've learned from the neighbors that the trustees and their Realtor were fully aware of it.
The main symptom has been water in the warm air ducts below the slab floor. This was discovered by the first termite inspector who checked the property; so the Realtor hired another termite inspector. The second inspector failed to disclose the water problem, and the agent gave us only the second report for disclosure. Unfortunately, our home inspector also missed the problem because he never looked into the floor registers. Now he tells us that removing the register grills is outside the scope of a home inspection. We're trying to sort out who is responsible for this mess and would like your opinion in the matter. --Lars
Dear Lars,
"This mess" involves two separate disclosure problems: willful concealment by the sellers and their agent and professional negligence on the part of the home inspector.
The trustee/sellers may be legally exempt from disclosure requirements because they were not the occupants of the property, but there is more to be considered than the letter of the law. The intent of the law is to require disclosure of known defects. If the sellers knew about the groundwater problem and its effect on the air ducts, disclosure should have been made on the basis of ethics and common decency, regardless of legal requirements.
The real estate agent is totally without excuse. The central point of ethics within the real estate profession is the requirement for full disclosure of all known defects. Exemptions for the sellers do not relieve their agent from this responsibility. If the agent was aware of a particular problem and failed to disclose it, that agent can be liable for damages and for legal sanctions by the state licensing authority. In this case, the agent is particularly culpable because the first termite report -- the one that revealed the water problem in the ducts -- was deliberately withheld from disclosure.
Finally, there is the matter of your home inspector. He maintains that he is not required to remove grills from heat registers. Strictly speaking, this assertion is correct. Dismantling of building components is not within the scope of a home inspection. However, a truly competent home inspector makes a reasonable effort to inspect areas of potential concern. Air ducts beneath a slab should always be viewed as a potential moisture problem because they may be exposed to wet soil. Heat registers can be inspected quite easily by opening the louvers and shining a flashlight through them. Removing the grills is not necessary in most cases. However, floor grills are usually not fastened and often can be lifted as easily as opening a cabinet door.
All parties who should have provided disclosure failed to perform. The sellers and home inspector may have talking points to the contrary, but no one, particularly the agent, can walk away clean from this situation.
To write to Barry Stone, please visit him on the Web at www.housedetective.com.
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Why home purchases fall apart at last minute
Why home purchases fall apart at last minute
As credit crunch intensifies, buyers use contingencies for backup
By Dian Hymer, Monday, June 2, 2008.
Inman News
Most buyers and sellers feel relieved when the negotiations are done and the purchase agreement has been signed by all parties. It's a milestone. But, you might want to hold off celebrating until the transaction closes.
Current market conditions have complicated the home sale industry. Lender requirements for mortgage qualification and the types of home loans available are changing daily. Before getting into contract to buy a home, make sure you double check with your lender or mortgage broker to confirm that the loan you were qualified for several weeks ago is still available.
For example, a week before closing, buyers who were purchasing their first home -- and who had been assured that their financing was in order -- were informed that their lender was no longer providing the type of loan they needed to complete the transaction.
These were well-qualified buyers who had enough cash for a 10 percent down payment and closing costs. They needed to borrow a first mortgage for 80 percent of the purchase price and a second mortgage for the remaining 10 percent. The lender who was providing the 10 percent second mortgage decided they would no longer provide 10 percent second loans to first-time buyers.
In a similar situation, buyers who had been approved for 80-10-10 financing were told by their lender at the last minute that their underwriting guidelines had changed. The lender would no longer provide a second mortgage for 10 percent of the purchase unless they were also providing the first mortgage.
A year ago, financing was readily available to just about anyone who wanted to buy a house. And, most of what sold appraised for the purchase price. It was rare to see a listing back on the market because the buyer couldn't get financing. If a deal fell apart, the most likely culprit was an irreconcilable difference over an inspection issue.
HOUSE HUNTING TIP: Due to the change in the credit markets, buyers are wise to include financing and appraisal contingencies in the purchase contract in addition to an inspection contingency. A contingency should give the buyers a period of time to satisfy the condition in question. If they act in good faith and attempt to satisfy the condition, but are unable to, they may have the right to withdraw from the contract without penalty, depending on how the contact is written.
When buyers find themselves in competition, it's tempting to waive contingencies. A year ago, many buyers felt comfortable waiving contingencies for financing and property appraisal. There was a loan product for everyone and appraisals weren't an issue.
This is no longer the case. Most lenders have stopped doing easy-qualifier, no-cash loans and pay-option mortgages, to name a few. Lenders have also tightened up on appraisals, credit score and verifiable income requirements.
Buyer's remorse is a more serious issue in a slow market where home prices are soft than it is in a market where prices are escalating. Sellers can help prevent buyer's remorse from sinking a deal by properly preparing their homes for sale. This includes pricing accurately for the current market so that the buyers don't feel they overpaid when they see the inspection reports.
Obtaining pre-sale home inspections will also help keep buyers from having second thoughts. The more buyers know about the condition of the property before they make an offer, the less chance they will back out due to inspections.
THE CLOSING: A soft market makes an offer that is made contingent on selling another property more risky. Even if your buyer has lined up a buyer for his house, if that deal falls apart so does yours.
Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
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Don't Decide on Mortgage Until Knowing All Fees
Don't Decide on Mortgage Until Knowing All Fees
Part 2: How to choose right loan, lender
By Ilyce Glink, Wednesday, May 7, 2008.
(This is Part 2 of a two-part series. Read Part 1, "Best loan in today's market: fixed or adjustable?")
A new study suggests that one of the reasons many subprime loans have failed is because of very weak underwriting.
"Underwriting" is the process by which a lender decides whether a borrower is a good risk. It involves looking carefully at the paperwork provided by the borrower, including a signed loan application, bank account statements, paycheck stubs, tax returns, profit and loss statements (if the borrower is self-employed), and a review of the appraisal of the property obtained by the bank.
The underwriting process also includes a process called "verifications." The loan officer is supposed to call your bank and verify how much cash you have in your account. He or she is also supposed to call your employer to verify your employment history and income information. If the facts you've put down in your application can't be verified, the loan officer is supposed to reject your loan application.
This isn't what happened in the subprime market meltdown. In some cases during the past several years, if a borrower's information couldn't be verified, the loan became a "stated-income" or "no-doc" loan. The borrower simply paid a higher interest rate and fees, and limited or no verifications were performed.
As a borrower, you want the lender to be sure you're qualified to borrow the amount you have in mind. You want to know exactly how much you'll owe each month, and for how long.
Underwriting the loan is arguably the most important thing a mortgage lender can do, and we've all seen the results of poor underwriting: a high rate of foreclosures and defaults.
When choosing a good mortgage lender, whether you choose a mortgage broker or a mortgage banker, you'll want someone who can do the job right. Finding a lender who will take the time to make sure you understand the different loan programs being offered, and will help you decide which loan best meets your needs is key to having a smooth closing.
How do you find a good lender? As with finding a good real estate agent, start by garnering recommendations from your friends, family and work colleagues. If you are working with a real estate attorney, he or she should have the names of loan officers who do a good job for their clients. Your real estate agent, if he or she is a pro, will have a list of names of mortgage lenders the company does business with.
Beware of real estate agents who only proffer the name of only one mortgage broker or lender, particularly if that lender is an in-house mortgage broker. The in-house lender may not be a bad lender, but you need to make sure you find the best lender for your circumstances and lending needs and not the lender that may yield the greatest benefit to the real estate agent's company.
You should also include a credit union, if you belong to one or can join one. Credit unions typically offer some of the least expensive loan programs, whether you're looking for a mortgage or a car loan.
Once you compile your list, you should do some basic due diligence to make sure that the loan officer and mortgage company is in good standing in your state, and that there are no outstanding complaints against them through the Better Business Bureau.
Next, start calling the loan officers to chat about their offices, how long they've been in the business, how many mortgages they're currently working on, and your own situation.
(By now you should have in hand a current copy of your credit history and credit score, which you can buy for $14.95 at MyFico.com or even less if you obtain a free copy of your credit history through www.annualcreditreport.com. Ask the loan officer to assume that you have this particular credit score for the purposes of your initial consultation, so your credit history isn't taped unnecessarily.)
You can ask each lender to give you a best price offer for the loan program in which you're interested. So, if you want a quote on a 30-year fixed-rate loan and you're putting down 10 percent, ask for that price quote. If you haven't quite decided between a 30-year fixed-rate mortgage and a 5/1 adjustable-rate mortgage (ARM), then ask for both. Be sure to ask for a detailed list of fees that will be charged for the loan.
These "other" fees can differ greatly between lenders. While some fees may be the same from one lender to the other, some lenders add additional fees to their services. Whereas one lender may have $800 of additional fees going to the lender, another may have fees that may be double that for the same loan and the same interest rate.
At the end of the conversation, you should feel comfortable with the loan officer, and the loan program he or she has offered. If you get a funny feeling that maybe something isn't quite right, (perhaps the loan officer is too eager to get your business?), then it's time to do some more research.
What about online lenders? Mortgage companies have collectively spent hundreds of millions of dollars creating fancy Web sites designed to attract borrowers. There's nothing wrong with doing some research online and perhaps even applying for a loan online.
But you'd want to know that the company you're doing business with is real.
If you're choosing a lender like Bank of America, Citi, SunTrust or Countrywide, you won't necessarily get a cheaper price by applying online. But it will take away some of the opportunity to have a personal experience, which I think is important in this, the single biggest purchase of your life.
To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.
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Home Buyers: There's More To Purchase Offer Than Price
Home Buyers: There's More To Purchase Offer Than Price
Don't sign final contract without considering closing, delivery dates
By Dian Hymer, Monday, May 5, 2008.
There is more to a home purchase offer than the price. Ideally, the offer, including any counteroffers, should encompass all the terms and conditions that will apply to the purchase transaction.
In some states, attorneys draft purchase offers. In other states, like California, most residential purchase offers are filled out by real estate agents using pre-printed contracts that were drafted by attorneys. In either case, make sure to read the offer and understand it before it's presented to the sellers.
HOUSE HUNTING TIP: A surprising number of buyers don't read the fine print. Instead, they rely on their attorney or real estate agent to make sure the offer reflects their wishes. Don't make this mistake. If possible, ask to see a draft of the offer beforehand so that you have sufficient time to read and digest it.
The purchase offer typically includes contingencies to protect buyers. Common contingencies are for financing, appraisal, inspections and the sale of another property. Contingencies are conditions that must be satisfied for the transaction to move forward.
Contingencies can be written in various ways. For example, an inspection contingency might give the buyer the unilateral right to withdraw from the contract without penalty. Or, it could specify that the buyers give the sellers the opportunity to remedy defects. In the latter case, the buyers' deposit could be at risk if they backed out of the contract without giving the sellers the chance to make repairs.
During the fast-paced seller's market of a few years ago, buyers often made offers without contingencies in order to be competitive. In some cases, lawsuits developed after closing when the buyers discovered defects they were previously unaware of.
While it's preferable to include contingencies, there are times when it may be reasonable to waive a contingency as long as you are aware of the consequences before doing so. For example, recently buyers made an offer in competition on a desirable house in the Oakland Hills of Northern California. They did not include a contingency for the house to appraise for the purchase price.
The appraiser was unable to appraise the house for the agreed-upon price because of a lack of sales in the neighborhood in recent months. Without an appraisal contingency, the buyers could have lost their deposit to the sellers if they backed out because the house appraised a little low.
However, the buyers were aware of the fact that the house might not appraise for the price they agreed to pay. They were willing to increase their down payment to make up the difference. And, the sale went through.
In addition to the price and contingencies, the purchase offer should include such specifics as the deposit amount, the closing date, the date the sellers will deliver possession, any personal property such as a washer or dryer that is included, and any real property such as a light fixture that is excluded from the sale. It is best to be as specific as possible.
The time to tie up any loose ends is before the final contract is signed. Leaving issues to be worked out later can work to your disadvantage. You could find that a previously congenial seller turns cranky if he's asked to pay for defects discovered during your inspections.
For example, let's say that you want to close the transaction and receive possession of your new home on a Friday so that you can move in over the weekend. You are better off specifying a date for closing than you are indicating a closing of a certain number of days from acceptance. If the negotiations take several days, your 30-day closing date could end up falling on a Monday.
THE CLOSING: An uncooperative seller might hold you to this.
Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
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Home Inspectors Avoid Asbestos Like The Plague
Home Inspectors Avoid Asbestos Like The Plague
Buyer Learns Real Reason Why Topic Is Not Discussed
By Barry Stone, Tuesday, April 29, 2008.
Dear Barry,
The home inspector I hired never mentioned that the floor tiles and air duct insulation contain asbestos. Shouldn't he have pointed this out? --Robert
Dear Robert,
Asbestos is generally regarded as "outside the scope" of a home inspection and is typically not mentioned by most home inspectors. For home buyers, this leaves a gap in the disclosure process. For home inspectors, the issue is one of legal liability. If any material is disclosed as a potential source of asbestos, the inspector may be held liable for other possible asbestos materials that were not mentioned in the inspection report. For this reason, the home inspection industry has excluded asbestos as a consideration during home inspections.
If asbestos disclosure were included in home inspections, complications could ensue because there are so many common building materials that might contain asbestos. Examples include sheet vinyl flooring, asphalt and vinyl floor tiles, adhesive mastics, acoustic ceiling texture, old heat-duct insulation, asphalt composition roofing materials, plaster, stucco, drywall, joint compound, and more. In most cases, these do not contain asbestos, although with some materials, such as acoustic ceilings, asbestos content is common. Those materials that contain asbestos are usually not hazardous if they are undamaged and allowed to remain as is.
It could be argued, however, that home inspectors should point out potential asbestos in some cases. For example, many home buyers plan to remodel and renovate the homes they buy. Interior renovations often involve, for example, the removal of acoustic ceiling texture or of sheet vinyl flooring. Unless alerted by their home inspector, the new homeowners could remove the material without consideration of the potential for asbestos exposure. Ceiling texture that is scraped off or vinyl flooring that is torn off could release asbestos fibers into the air of the home if proper removal procedures were not used.
Another example would be old insulation on warm-air ducts installed prior to 1973. Duct insulation that appears as gray cardboard, sometimes with a foil veneer, is certain to contain asbestos. If the material is undamaged, it can be left as is. But it is common for such material to be torn in places or to be detached from the air ducts. Home inspectors in those instances would do well to recommend further evaluation and repair by a licensed asbestos contractor.
The pros and cons of asbestos disclosure have been debated among home inspectors for many years. On one hand, there is the need to provide vital information to home-buying customers. That argument weighs in favor of measured and limited asbestos disclosure. On the other hand, there's the fear of liability and lawsuits if asbestos disclosure is not comprehensive and thorough. That consideration favors a total avoidance of asbestos disclosures of any kind. The controversy is an outgrowth of the freewheeling practice of litigation, an ongoing threat to businesses and professions throughout the nation. The proliferation of cases, whether frivolous or justified, has taken its toll on home inspectors everywhere. In the end, each home inspector must decide whether to confront or avoid the practice of asbestos disclosure.
To write to Barry Stone, please visit him on the Web at www.housedetective.com.
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Most Buyers Better Off With Mortgage Insurance
Piggyback Loans More Costly in Today's Market
Most Buyers Better Off With Mortgage Insurance, But Exceptions Exist
By Jack Guttentag, Sunday, March 16, 2008.
A piggyback is a second mortgage taken out at the same time as a first mortgage, as a way of borrowing a larger total amount. The first mortgage is for 80 percent of property value, and therefore does not require mortgage insurance, while the piggyback is for 5 percent, 10 percent, 15 percent or 20 percent of value. Instead of a mortgage insurance premium, the borrower pays a higher rate on the piggyback than on the first mortgage.
Whether a piggyback saves the borrower money relative to mortgage insurance depends on many factors, including the rate on the piggyback relative to that on the first mortgage. These factors are pulled together in calculator 13a on my Web site.
During the years 2000-2006, the advantage seemed to favor piggybacks, and they grew rapidly at the expense of mortgage insurance. It helped that interest on piggybacks was tax-deductible and mortgage insurance premiums were not. In addition, because of the marked appreciation in home prices during this period, piggybacks were underpriced.
Because a piggyback lender, in event of a foreclosure, recovers only what is left after the first mortgage lender is paid off, the risk of loss on a piggyback is critically dependent on what happens to home prices. With prices rising 7 percent or more a year as they did during 2000-2006, even a 20 percent piggyback acquires a comfortable equity cushion after a few years. It appears that piggyback lenders, sharing the euphoria that pervaded the entire market, priced on the assumption that prices would continue to rise. I have called this "disaster myopia."
When the disaster struck in 2007, the default rate on piggybacks soared, and investors in second mortgages began paying a stiff price for their mistake. With home prices declining, there is no equity protecting many of these seconds, and it doesn't pay the lender to foreclose. In some cases, lenders are writing the loans off, though the borrower remains liable and cannot sell the house without a sign-off from the lender.
Many of the borrowers who are having payment problems with their first mortgage are regretting that they had earlier selected a piggyback over mortgage insurance. If the two mortgages are held by different lenders, as is frequently the case, the first mortgage lender who might otherwise be inclined to modify the contract so the borrower can afford it won't do it unless the second mortgage lender also makes a concession. This so complicates the process that it may not get done, leaving the borrower with no place to go -- except to foreclosure.
In the currently stressed loan market, the prices of piggybacks are substantially higher than they were, and this has shifted the balance back toward mortgage insurance. A year ago, the sum of the payments on two mortgages in most cases was below the sum of one payment plus a mortgage insurance premium. Today, reflecting the higher rates on piggybacks, in most cases the opposite is true. Further, Congress has made mortgage insurance premiums deductible for some borrowers, at least for some years, largely neutralizing one of the arguments for the piggyback.
However, the stressed market has also revealed an advantage of the piggyback over mortgage insurance that was not very important before. If you borrow with a small down payment but anticipate that soon you will come into a pot of money that you will use to pay down the balance, it is better to have a piggyback than mortgage insurance. You can get rid of a piggyback and the interest payment on the piggyback just by paying it off. In contrast, getting rid of mortgage insurance by paying down the balance takes a minimum of two years and in many cases much longer.
This has become important because it now takes longer to sell a house than it did, and many house purchasers with old homes to sell are not waiting. Without the equity from their old home, they make small down payments, anticipating that as soon as the old home sells, they will pay down the balance of the new loan. Piggybacks are very handy to have in that situation.
The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.
By Jack Guttentag, Sunday, March 16, 2008
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Top Home-Buying Mistakes Revealed
Top Home-Buying Mistakes Revealed
Many Overlook Permits, Maintenance, Local Economy
By Dian Hymer, Sunday, March 16, 2008.
Inman NewsThe first rule of inspecting a home you want to buy is to stay intimately involved in the process, and to leave no stone unturned. If you're busy or traveling during the time period, you have to complete your due diligence investigations by enlisting the aid of a friend you trust to stand in on your behalf -- someone who will keep you well informed as inspections proceed.
Buyers want to be sure they get a good deal on the home they buy. This is especially so if they're buying in a soft market. Whether a property is a good deal depends on its condition, its location and the price paid.
Most buyers don't take the inspection process far enough. They hire a home inspector to do a general home inspection to make sure that all systems are in working order and that there aren't any serious defects that might affect their decision to buy or not.
For some buyers, this constitutes their due diligence inspection of the property. But, in many cases, simply having a home inspection done is not enough to ensure that you don't end up regretting you bought the property.
Most home inspectors recommend further inspections. Some buyers take these admonitions seriously and some don't. A recommendation that is often overlooked is to research the permit history.
If you don't check the permit history, you could find out later, when you want to take out a permit for a renovation, that there are expired permits for work that never received a final approval from the city inspector. You might be required to reinstate the expired permits and finish the job to the building department's satisfaction before you can take out a permit for a new project. This could be expensive, take time, and at the least, be a hassle.
Another item buyers ignore is the cost of routine home maintenance. Some homes cost more to maintain than others. Well-maintained homes will be easier to maintain because you'll have little deferred maintenance to repair.
Ask the sellers for information about how much they pay per year for tree trimming, painting, and servicing house systems such as the roof, furnace and drainage systems. Also ask how much the utility bills run in an average winter and summer month. All of this will factor into the cost of owning the home. Buyers usually focus on the price they'll pay upfront for a house. How much it will cost them over time should also be factored into the total cost of home ownership.
HOUSE HUNTING TIP: Buyers tend to pay more attention to the condition of the home they're buying than they do to finding out all they need to know about the area in which they'll be living. The home you buy is not a good value if you find out a year later that the neighborhood is declining. Make sure you find out if homeowners are moving in or out of the area. If you see a lot of remodeling going on in a neighborhood, this is a good sign that the homeowners plan to stay put. Another good sign is if there are few listings and the ones that come on the market sell quickly. This indicates a high demand for the neighborhood.
You'll also want to find out about crime in the neighborhood, and whether or not there is development planned in the area that might have a positive or negative impact on the neighborhood. And check into the general state of the local economy.
THE CLOSING: Are businesses hiring new employees or issuing pink slips?
Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
By Dian Hymer, Sunday, March 16, 2008
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Buying a home is an exciting time in one's life
Making the smart move of choosing a REALTOR® is your first step to ensuring that your new home and community meets your needs. My services and experience range from financial aid to helping you find the home that best suits you and your family. For your convenience, I also provide listings by email. I pride myself on repeat business and hope you'll come to understand why.
How I Can Help
Before you start looking
Closing Costs
- Assure that you see all the properties in the area that meet your criteria.
- Guide you through the entire home buying process, from finding homes to look at, to getting the best financing.
- Make sure you don't pay too much for your new home and help you avoid costly mistakes.
- Answer all of your questions about the local market area, including schools, neighborhoods, the local economy, and more.
Before You Start Looking For Your New Home:
- Check your credit rating. Straighten out any errors before its too late.
- Determine a comfortable monthly budget for your new purchase, including down payment and monthly payment.
- Find a loan program that meets your needs and get pre-qualified (preferably pre-approved).
- Choose a REALTOR® that you trust and who understands your needs.
- Determine what neighborhood best matches your needs.
- Identify important features you need your new home to have.
- Lender fees include charges for loan processing, underwriting, preparation and establishing an escrow account.
- Third-party fees include charges for insurance, title search, and other inspections such as termites.
- Government fees include deed recording and state & local mortgage taxes.
- Escrow and interest fees include homeowner's insurance, loan interest, real estate taxes, and occasionally private mortgage insurance.
