Buying The Right House

Realtors

These folks are professionals. Realtors who assist buyers in finding a house are called buyer's agents. It is their job to find suitable homes for the potential buyers and to assist them in any way possible. As with most cases in major life decisions, buying a home is best done with some outside help. Realtors know the ins and outs of purchasing a home and can fill you in on everything you need to know to make a sound decision. You might see a house and fall in love with it, but an experienced buyer's agent can point out some major flaws which you may have never noticed until after the sale was complete. It is always nice to have a knowledgeable professional on your side.

Don't get taken for a ride. You shouldn't be paying a buyer's agent out of your own pocket. Buyer's agents take part of the commission from the selling agent, and should not be asking you for money up front. You should also pay attention to the homes your realtor takes you to see. Buyer's agents should let you know up front if they are taking you to see a home, which they are additionally the listing agent for. This isn't really considered a conflict of interest, but if you notice that almost every single house you go to is like this then you can make the conclusion that your realtor cares less about what sort of home best suits you and more about which homes which they represent might they be able to sell to you. You might also pay attention to make sure your realtor isn't taking you to homes, which are solely represented by the realty company they work for. Quite simply, they should take you to any home, which suits your needs, regardless of which company is listing the home.

Some memberships have privileges. If you are a member of a credit union or of some sort of professional organization you may want to check to see if there is a mover's incentive program available to you. Programs like this assign you a buyer's agent from their list of qualified professionals and then give you a bonus check when you close on the home. Not only do you get free money out of the program but you also get a sort of additional resource in your search for a home. The credit union or other institution will probably periodically call to check up on the progress of the buyer's agent, and this adds another system of checks and balances to the process. If you don't like your buyer's agent for one reason or another then you can pass on this information to the program representative and rest assured that they will get everything straightened out. It is nice to have people on your side.

Do It Yourself

Do you have the time and patience for this? If you have gotten this far in your reading then you undoubtedly realize that there is much more to finding a suitable home than seeing a cute house and deciding to buy it. Someone who decides to take on the task of finding and negotiating the price on a new home all by themselves must ready himself or herself for a very involved process. If you are already juggling a family and a workload then you may want to seriously consider trusting a professional to handle the more tedious tasks involved with purchasing a home.

How much do you really know about buying houses? Unless you have previous experience with home inspections or real estate dealings then you may be a little lost as to how to go about selecting a home. This is not to say that you absolutely cannot handle this sort of thing all by yourself; there are many people who dive in head first and wind up doing an excellent job of picking out a nice home, negotiating the cost, and finding a good mortgage loan product. You may want to invest some time, however, in learning about the ins and outs of buying a home before jumping in because if you make a bad decision and you're the only one making the decisions then you really have no one to blame but yourself. You know what they say about a person who acts as their own attorney: they have an idiot for a client.

Can you save money by doing it yourself? Many people think that by not using a buyer's agent they can talk the sellers down in price even more since there will be no commission to pay other than the seller's realtor. You need to consider things from the seller's perspective though. When they see you coming with no buyer's agent and you are demanding a big price cut then the first thing that pops into their head might be "this guy/gal doesn't know what he/she is doing." Buyer's agents bring along with them certain credibility, and since they are well versed in the fine art of negotiation in many cases they will wind up saving you money in the long run.

Putting In The Bid

Be realistic. Some people detest having garage sales because they feel insulted when someone tries to talk them down on the prices they set. It can be really hard to set out your personal items and have people insist on giving you a dime for something that you know is worth at least a dollar. Now apply this principal to a person's home, and you can understand the potential to really insult someone. If a person is asking $150,000 on a home which is obviously worth that amount and you stroll in and offer $100,000 in addition to the seller paying your closing costs you are not only insulting the seller but you are making ridiculous demands. Even if the seller is desperate to sell they would be completely justified in crumbling the bid up and throwing it back into your face.

In addition to the monetary bid, don't get crazy with your other demands either. The seller may have a nice car in the garage, which you admire, but adding it to your bid as part of the home sale is a delicate situation. Be ready to make certain concessions if you ask for things like this. It's true that once in a while a home sale can include other things, but you can't expect a seller to drop their asking price, pay for your closing costs, and toss in their heirloom furniture set to boot. Try to be realistic.

Make an impressive earnest deposit. An earnest deposit is a sort of down payment on a down payment…it's the best way to show the sellers that you are serious about buying their home. An earnest deposit does not need to be a great deal of money. Many realtors will suggest an amount like $1000 or $1500 as a good earnest deposit. This money is included when you submit the bid. Although an earnest deposit isn't required it certainly is a good idea; if you submit a bid with no earnest deposit and then someone else submits a bid with a $1000 check attached then whom do you think the sellers will go with? Your earnest deposit is added to your down payment if the bid is accepted and you wind up purchasing the home, and if for some reason your bid is rejected then you do get the earnest deposit back.

Specify any additional items you would like included in the deal. You will be surprised to learn what movers can pack up and take away when the previous owners are leaving. Curtain rods, shelving, and even entire swing sets will be gone when you move in if you don't specify them as a condition of you purchasing the home. These are the sorts of things you need to add to your bid. If you fall in love with a house because the light fixtures in the dining room are divine then you really should stipulate that the light fixtures need to remain intact instead of the sellers taking them when they leave.

Interestingly enough, if you fall in love with something else in the house which has nothing to do with the home itself…dishes, a bookcase, or a mounted television set…these can be included with the bid as well. Some homeowners are willing to give up these sorts of things to get the house sold. There are rare instances of people including tractors, cars, and even small airplanes in their bids, and the sellers taking them up on it. As long as the offer isn't downright insulting ("please include all your children's furniture, clothing, and toys in sale") then it doesn't hurt to ask.

Get An Inspection!

Don't trust your gut instinct on this one. You may think a house looks great and you don't want to spend the time necessary to wait for a full inspection. After all, during a real estate boom it can be pretty difficult to find a qualified inspector to come around and take a look at a home you want to buy. Whatever your reasoning, throw it aside and realize that you are not competent enough to determine these sorts of things on your own. Do you know how to look for signs of structural damage? Do you have what it takes to find signs of termites in a home?

It is amazing what sellers can patch up and hide when trying to get a house sold, so unless you have quite a bit of expertise in the area of inspecting homes then you need to leave this sort of thing to the experts. If you don't get an inspection done and then the house winds up having many existing issues it is going to be near impossible to prove that the previous owners were aware of the problems. You'll be on your own to pay for the repairs, and you will feel awfully silly that a simple home inspection could have clued you in on these problems and would have most likely stopped you from buying the home in the first place. Hindsight is 20/20.

Some sellers already have an inspection done. Sometimes when sellers are trying to make their home look even more attractive they will have a home inspection accomplished before the home even goes on the market. Many times you will find the home inspection report sitting prominently displayed when you come for an open house, and in some cases the sellers will have already fixed any problems cited on the report. This is a good scenario, but you must remember to approach this with some trepidation. You don't know if the home inspector is in reality a buddy of the sellers who made the home inspection look a little better than it should have looked.

Take a close look at the inspection and makes sure that the inspector works for a credible company, and also check to see if the company offers any sort of guarantees. Sometimes inspection companies will put a guarantee on their inspections, which states that the company will pay for any problems missed by their inspector for a year or more. It is still best, though, to commission your very own home inspector to get an unbiased report on the home.

VA and FHA require stringent inspections. If your mortgage loan is going to be backed by an organization like the Veteran's Administration or the Federal Housing Association then you should know that they require their own inspectors to check out the home before allowing the financing to go forward. This inspection, however, should never replace an inspection done by a company that you hire. You won't receive a copy of the inspection from a VA or FHA agent, but instead will simply be told whether the home passed or failed the inspection. Something as simple as there not being hand rails on a staircase can cause a home to fail a VA or FHA inspection, so keep this in mind while shopping for homes.

As you can see there are so many factors to consider regarding the financing of a home that when they are coupled with the process of finding a home the entire process can be pretty dizzying. There are no great mysteries to mortgages, but there is a lot of information to digest and you must weigh the benefits and downsides to each product which is offered. You should never rush into a finance decision, and this is especially true for when you are purchasing a home. Home mortgages have a way of sticking around for a really long time, so make sure that the one you pick is one that wont be a cause of grief years down the road.

 Next, we discuss what you need to know about Going Through Closing.