Steps to buying your new home (continued)
 Looking at homes in your price range
Now that you have an idea what price range you can afford, here are a few suggestions. Lets say your price range is $140,000 to $190,000. Lets go to HomeGain.com or Realtor.com to search for homes in that range.
Once you have decided on some zip codes or cities, research the selected areas. Find out as much as you can about the area's schools, shopping centers, traffic, recent trends, crime stats, property taxes and cost of hazard insurance. One source of information is the local media especially the newspaper's archives. The local police station and real estate agents who live in or around the area, are others fine sources of information.
Ps. Be aware that your yearly insurance will be higher than normal if the house is in a flood prone area. The county's office should be able to help you determine land elevation and other zoning issues found on a plat map. Also, the distance between your home and the closest fire station is a factor when considering fire insurance.
Drive through your target areas at certain times like a Saturday morning or a Sunday afternoon. See what the traffic is like at peak hours and on weekends. Get a feel for the type of families that live in the neighborhood, i.e. younger families with children, middle-aged or older retired families.
Arrange tours of selected homes
You have found a few homes that you want to check out. Do you call the name listed on the "House for Sale" sign? Not yet. Bear in mind that the agent listed on the sign has a contractual obligation to represent the seller NOT the buyer. He or she will be trying to get the "best" price for the seller while you are trying to get the lowest price that is reasonably possible.
It is recommended that you get someone who is referred to as an "exclusive buyer agent." In some cases buyer agents are paid directly by you, on an hourly or contracted basis. In many cases your agent will split the commission that the seller's agent gets upon sale of the house.
If you do not have friends or relatives in the area who can recommend a real estate agent, and you are forced to pick one yourself, ask him or her lots of probing questions. Your questions will help you determine if this agent will represent you fairly and understand that you want the lowest price that is fair for the current market. More on choosing an agent.
Make an offer and negotiate a purchase price
A valuable piece of information you should have in your negotiation "arsenal" is the prices of recent home sales within a mile or 2 of the house you are about to make an offer on. Your agent has access to an extensive list of recent home sales. If you want to do some work on your own, here are a few websites that will show you the recent comparable sales ("comps") in the area:
Yahoo Real Estate
Bankrate.com
domania.com
The real estate agent that is representing you will help you in the bidding process. This includes preparing an "offer sheet" that shows the seller you are seriously interested in purchasing the house. Some offer sheet contain specific conditions, such as, your offer is valid unless a thorough inspection reveals serious defects or safety concerns that cannot be fixed within a certain time.
Apply for home financing
Once your offer has been accepted, your next step is to apply for a home loan. You may start at your local bank or credit union. You may also apply online at a sites like LowCostLending.com or LoanHounds.com. They will present your application to 3 or 4 lending institutions that will vie for your business.
A popular option is to submit your application to a mortgage broker, who will act on your behalf in connecting you with the right lender. The bank that approves your application usually pays the mortgage broker for his services.
Pay to have the house thoroughly inspected
The purpose of a home inspection is to check for defects or safely concerns that could cost you thousands of dollars to fix after you have moved in. To the untrained eyes there may be things that are not obvious. These may include cracks in walls that may be hiding behind a fresh coat of paint, plumbing leaks, electrical problems, faulty appliances, a failing roof or a porous foundation.
Expect to pay $200-$500 for a home inspection. (Ps. If you try to save a few dollars by hiring the least expensive inspector, it may cost you a lot more in the future. Hire the most experienced inspector for the job.)
Time to close the deal
The closing tends to be a bit scary for some. This is where you put pen to paper and the house is turned over to YOU. If everything was done correctly up to this point (including making sure the title is free of any liens), the process should merely be a formality.
To make sure there are no surprises some home buyers bring a real estate attorney to the closing procedures to examine all the documents. In addition there is title insurance to protect the bank (and you) in case there is a claim against the title that was not revealed during a title search.
Previous page
| 