Buying a Home: Just the Facts

by Matthew McDonough

Even if it's not your first time buying a home, you should familiarize yourself with the whole process. Unless you are an investor, you probably don't do it to often.

Some things to consider when buying a home:

- Time

It can take time to find a great home. If you've only begun your search today, don't expect to find a home tomorrow. Buying a home is like working on a large project. You'll need plenty of time. But if you feel that you've gathered enough information and resources within your available time frame, so be it.

- Money

Consider your financial status, before deciding to buy a home. You should check your credit situation by getting a copy of your most recent credit report. You are entitled to one free credit report a year. You should also know exactly how much money you have available and how much you can afford to spend on a home. Most mortgage lenders will help you in this process. At the very least you should ask a mortgage lender or broker to pre-qualify you, but being pre-approved for a mortgage is even better. A pre-qualification will be based only upon what you tell the lender is your financial situation, nothing will be double-checked. A pre-approval will actually start the loan approval process and will tell you exactly how much you can borrow. If you have been pre-approved, it will also speed up the loan process and you will be able to close on the loan earlier. Your mortgage qualifications may also be a factor in your negotiations with a home owner. Being pre-approved is a strong point for you. The seller won't have to worry about your mortgage being approved and about having to show the home all over again.

- A Good Lawyer

You should have a good real estate lawyer working for you. The few hundred dollars you spend may save you thousands in the long run. Don't just take the advice of your real estate agent, remember he is looking for the best deal for the seller, not for you. Also, don't just hire any lawyer. You want an experienced real estate attorney, not just someone you know who is a divorce or a personal injury lawyer. They won't know the in and outs of real estate contracts and you don't want to be billed more just so that they can learn them.

- The Right Agent

To locate a reliable agent and one that you trust and get along with, you will need to be able to compare experiences, backgrounds and referrals from people that you trust and get along with. In most areas of the country any agent can sell any property that is available in the area. Don't settle for an agent that you just don't like. Drop him and find another one.

- Needs vs. Wants

Unless you will be building a new home, it is much easier to decide what you want based upon the features that are in the homes are available for purchase in your area.

- Take Notes and Pictures

You don't want to forget even a single detail about the homes you've been looking at. If you have a digital camera take lots of pictures of the properties you've been looking at. You should also carry a small note pad with you in which you write down what you liked and didn't like about the property and the surrounding area.

- Words and Terms Confusion

You should familiarize your self with the terms and words used during the dealing and negotiating with your agent and contractor. Also, try to keep a list of the questions you have that need further clarification. You should also familiarize yourself with the common abbreviations used in property listings and ads and there local meaning. A half bath isn't always what you may think it is. Sometimes it means a toilet and only a shower, sometimes it's just a toilet.

- Points and Plus

You should learn how to bargain and deal to get the best possible terms for your purchase. Don't feel pressured by your agent, remember he probably is working on the best possible deal for the seller, not you and there are always other houses available.

- Insurance

If you will be taking out a mortgage to finance the purchase of the home you will need a homeowner's insurance policy. In addition if the property is in a flood plain, you will be required to get flood insurance too. In some areas of the country common perils may not be covered by the standard homeowners insurance policy or if they are covered there will be a large deductible, for example in Florida, damaged caused by hurricanes will not be fully covered and as another example, in California damage caused by earthquakes may not be covered. To get more extensive coverage for excluded perils maybe cost prohibitive. Also note many policies no longer cover mold infestation. If you won't be financing the house, it is still wise to get at least a basic policy to cover any damage to the home. You can also lower the cost of insurance by getting a policy with a larger deductible, a$1000 or more.

- Final Walk Through

Before you sign the papers to finalize the purchase of the home, you should do a final inspection or walk-through of the house. Make sure the house is clean and that everything that you agreed to in the contract is still present in the home and to make sure that nothing you don't want is still there. Remember once the contracts are signed, the home is yours anything still there becomes your responsibility.

Remember to plan ahead and avoid the common mistakes that most home buyers make and you might actually enjoy the experience.
 

About the Author

Matthew McDonough is a real estate investor and former real estate agent in New York. He owns property throughout the USA. He wants to share is knowledge and operates the website Inside Real Estate Info

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