Thanks for visiting Maida New Hampshire & Massachusetts Home Inspection Services Buying Tips and information series. Purchasing a home is not only part of the "American Dream", it's also one of the wisest investment decisions you can ever make. Here are some of the advantages and benefits.
Owning a home helps you establish financial credibility.
Owning your own home provides you with independence and more privacy than renting. You are free to paint walls, plant flowers, keep pets and anything else within legal bounds.
As you make more payments and own more of your home, you add to its investment value. Most improvements you make will also add to its value.
A home reflects its owner's values and lifestyle. Owning a home can provide you with a source of pride, enjoyment and satisfaction.
A home can provide security against inflation because the value of your home increases as prices go up.
Being established in a community provides a sense of belonging, stability and security.
Interest on your mortgage loan is deductible on your yearly personal income tax return. Many of the closing costs associated with purchasing your home are deductible, as are your property taxes.
Many people mistakenly believe that buying a home is difficult. But, if you're educated about the real estate market, buying is a breeze. Here are a few tips:
Educate yourself before looking for a home. Look for free first time home buyer seminars sponsored by local not-for-profit organizations. The federal Department of Housing and Urban Development (HUD) has a hot line number to help you locate free Pre-purchase counseling near you: 1-800-569-4287.
Set a monthly budget and decide exactly how much you can spend on your mortgage. Dedicate yourself not to go over that number even if you find the home of your dreams.
Contact a lender and get Pre-approved. Make sure your lender is aware of your monthly budget and ask for monthly payment estimates that include principal, interest, tax and insurance.
Consider how much you can afford. Your monthly housing costs - including mortgage principle and interest, property taxes, and mortgage insurance - should total no more than 25 to 28 percent of your monthly gross (before tax) income. Your monthly housing costs plus other long term debts – like payments on car loans, alimony or child support, payments on credit cards or any other installment loans with more than 10 months left to repay – should not exceed 33 to 36 percent of your gross income. Don't overextend your income, no matter what. Remember you'll have closing costs and other moving expenses as well.
Think carefully about where you want to live. In addition to things like proximity to work, schools, shopping, friends and family, you will also want to evaluate the neighborhood's growth potential. For most people a home is not simply a place to live, but it is also an investment. If you're planning to one day move to a bigger home you'll need to take into consideration the resale value a few years down the road.
Make a list of things you absolutely have to have-like three bedrooms and two bathrooms, and another list of things you'd like to have but can live without, like alarm system, automatic sprinklers, etc.
When you're shopping, collect flyers for each property and make notes. If you look at a lot of houses it will be difficult to remember one from the other.
Enlist the services of a competent real estate agent. Pick an agent that you feel most comfortable with, recommended to you by people you trust, to guide you through this complex process. The agent can provide details about home prices, schools, tax rates, utilities, amenities, civic issues and more. Realtors also arrange each visit and conduct the on-site tour, perhaps in conjunction with the seller. There's no fee for this as agents work on commission.
Types of Agents: (Note: Refer to the Laws in your State for specifics and clarification)
Listing (Seller's) Agents: People who list homes for sale. Usually their name is on the FOR SALE sign, or the Exclusive Listing. They are required to work to get the best possible deal for the seller in all transactions. A seller's agent has duties, generally defined by State Laws, to represent the seller's interest in the sale of the property.
Buyer's Agent: An agent that represents the buyer. A buyer's agent has duties, generally defined by State Laws, to represent the best interests of the buyer as a client.
Disclosed Dual Agency: A licensee acting for more than one party whose interests may differ in a transaction with the knowledge and written consent of all parties for whom the licensee acts. If a licensee represents a buyer in a transaction involving a property which is listed by that same Broker, or by that Broker's company, then a Dual Agency exists. When
Disclosed Dual Agency occurs, the full range of agency duties cannot be delivered to both parties. These agency duties will be modified by agreement, so that neither client will be given an unfair advantage. Dual Agency must be disclosed and agreed to in writing by both clients.
When Previewing A Home
Write notes when previewing a home so you will be able to discuss the details later with your real estate agent.
Ask questions about the home and discuss any objections or concerns you may have.
Ask about the community - schools, shopping and transportation.
Ask specific questions about the construction of the home; electrical, plumbing, heating, cooling systems, etc.
Go back to the property at least twice (three or four times even better) at different times of the day to see the location of sun on the property and what's going on in the neighborhood.
Check out the neighborhood: Take the time to drive through the neighborhood at different times of the day and introduce yourself to as many neighbors as possible. You can learn more about the neighborhood from those who live there than from any other source. Be sure to ask non-probing questions like "How long have you lived here? What do you like best about the area? If you were to do it all over again, would you choose the same neighborhood?" Say that you're thinking of buying the house next door. The vast majority of people are more than happy to have a five-minute chat with you on the doorstep. If you do buy the property, you've saved yourself the introductions already. Maybe more importantly, you will be surprised at how much the neighbors know what's going on next door.
Listen carefully to the advice of your Agent. Agents have a special understanding of the real estate market that can only be gained through daily involvement in the buying and selling process.
Never try to negotiate directly with a seller. Always let your agent present your offer and any counter-offers through written contracts.
Know the area. Make sure you know the property status, neighborhood status and the seller's motivation. The more you know, the better armed you will be to negotiate.
It's okay to start with a wide search of maybe three or four cities or areas but once you've seen what's available you should start to narrow your search as much as possible.
Never make an offer on a property without first checking the recent comparable sales. As a result of their constant market involvement, your Agent will be the best person to evaluate this information.
Do not let yourself be pressured to sign anything. A legitimate business should always give you time to review a contract before signing. Never sign a document with blank spaces.
Have your own attorney review all contracts and loan documents before you sign. It is not a good idea to use an attorney provided by the seller or the lender. Ask your attorney about any provision you do not fully understand.
Keep in tune with your own requirements before entering a negotiation. Submit the offer in writing through your real estate agent. Remember you can use contingencies, like items you want included or upon approval of your mortgage. It's OK to be flexible – there's always some give and take – but don't break.
Remain Objective. Even if it's your "dream house," don't let your emotions get in the way!
Keep records and copies of all papers and contracts throughout the transaction.
Hire only an ASHI (American Society of Home Inspectors) Certified Home Inspector to perform an independent inspection of the home. This is one of the most important things that you can do. Negotiate a provision in the contract that states that you have the right to get an inspection by someone of your choosing and to cancel the contract if you are not satisfied with the inspection. Do not rely on the appraisal that is provided by the lender.
Be prepared to renegotiate your first purchase offer. Sellers usually feel their home is worth the asking price. Your agent should help you determine a fair and competitive first offer to avoid offending the seller with a "low-ball" price.
Make sure that you have extra money in the bank for those move in expenses. There are always things that you do not think of that you will have to purchase (curtains, refrigerator, stove, movers, etc.).
Have Fun and Relax. Finding your new home can be a rewarding experience. Have a good time and enjoy the process.