Real Estate Tips

Buying Your Home

When buying a home, you can learn from the knowledge and skill of a Real Estate Agent.

Buying a home is probably the biggest investment you will make, with long-term financial ramifications. It calls for many informed decisions and for good advice from a real estate professional, like Dianne.

What can a Real Estate Agent do to help you buy the right home for you?

n They will help you determine how much home you can actually afford. Often, they can suggest additional ways to accrue the down payment and explain alternative financing methods. They can also introduce you to a mortgage counselor and arrange to have you "pre-approved" which can improve your negotiating position and enable you to achieve your home-buying objectives faster and with less stress.

n Providing "client-level services", they can work for you as a buyer's agent and help negotiate the best price and terms for you. Or, they can serve as a disclosed dual agent, acting as a facilitator to the agreement.

n They will help you work out a realistic idea of the home best suited to your needs - size, style, features, location, accessibility to schools, transportation, shopping, and other personal preferences.

n They have access to a listing of all available homes in the multi-listing system, can evaluate them in terms of your needs and affordability, and will not waste your time showing you unsuitable properties.

n They can often suggest simple, imaginative changes that could make a home more suitable for you and improve its utility and value.

n They can supply information on real estate values, taxes, utility costs, municipal services and facilities, and may be aware of proposed zoning changes that could affect your decision to buy.

n Although the law does not normally require an attorney to review documents or oversee real estate closings, they can provide you with a list of real estate law practitioners to choose from if you would like to use the services of an attorney.

n They can help familiarize you with the closing process and they will obtain closing costs in advance of closing for your review.

n They can provide you with a list of qualified home inspectors, pest inspectors, surveyors, and help to coordinate inspection appointments.

Top 10 Tips to Successful Home Buying

Tip #1: Research Is The Key To Discovery

Home sellers won't call you with an offer to buy a maintenance-free home with a wonderful mortgage. You have to find the gems yourself! Only by reading available materials, talking to friends and experts, and spending time looking at different homes, schools, and neighborhoods will you end up with your American dream. Avoid the nightmares by learning how best to buy and maintain a home.

Tip #2: Make A Plan And Get Pre-Qualified

Every important decision needs to be clearly thought out. Developing a home buying plan can help you focus on the important factors and organize the entire process. You may even want to use a binder with sections on house hunting, home financing, service providers, etc. Loan pre-qualifying helps you determine the home price you can afford and presents you as a genuine prospect to the seller. A lender typically uses the 28% formula (your monthly mortgage can't exceed 28% of your monthly income) in approving your loan. Planning your actions and getting pre-qualified will keep you out of the panic mode and allow you to take advantage of opportunities. A thorough plan will save both time and money!

Tip #3: Value, Value, Value

The classic rule of buying the worst house in the best neighborhood still applies. If you buy with an eye towards improvement, you can customize the home to fit your needs. The saying, "make money buying a home, not selling one," should keep you focused on the long-term importance of the purchasing price.

Tip #4: Create A Top 10 List Of Amenities

When shopping for a home, list the features (fireplace, fenced-in yard, new appliances, etc.) that are most important to you in deciding on which home to buy. Establishing "your criteria" early on will save time shopping for inappropriate homes and may keep you from buying a home on a whim. As detailed in Tip #3, your top reason for buying a home should be the value you are getting. Some of your top 10 amenities should logically be sacrificed if an incredible value is available.

Tip #5: Fixed vs. Adjustable Rate Mortgages

Which type of loan fits your particular needs? If this will be your first home or a "transitional home" -- one you plan to own for a short time, an ARM may be the best type of loan. If it's going to be your dream home or one you plan to raise a family in, then you may want the stability of a fixed rate mortgage. If you choose an ARM, the index should be based on the Cost of Funds Index if rates are increasing, and Treasury Bills if they are decreasing. The COFI's are less volatile over time than T-Bills; make sure the teaser rate is understood and what the real rate would be.

Whichever loan you choose; make sure that you scrutinize all the closing costs. If you are required to have a mortgage escrow account and private mortgage insurance, make sure you understand the terms and cancellation procedures (your Real Estate Agent has publications to assist you). Also, make sure there are no prepayment penalties so that you can utilize an accelerated mortgage plan. A good mortgage reduction plan can save you tens of thousands in interest costs, and shorten your loan term, with only small extra principal payments. If you experience negative changes in your job, health, or marital status, you can revert to the standard payments in your mortgage contract.

Tip #6: Sign A Contract That Protects You

Make sure that the contract you put on a house allows you to arrange financing, inspect the home and negotiate any problems that you uncover. Ensuring that the contract you sign will minimize potential legal battles will let you swim in your new pool with your family and neighbors instead of with the sharks.

Tip #7: Put Yourself In The Seller's Shoes

You are about to make one of the most important decisions that will affect both your life and the life of the seller. If you take time to understand the reasons the seller bought the home, their reasons for selling, and the home improvements they have or have not made, you'll be in a better position to evaluate the home and negotiate a better deal. In the end, the home buying process excludes the professionals and comes down to the individuals buying and selling the home. A closer look at the seller may help you in deciding whether and for how much to buy a particular home.

Tip #8: Develop A Mortgage Shopping Chart

One of the biggest decisions to make before putting a contract on a home is how to finance the purchase. There are 10,000 lenders competing for your mortgage business. The days of simply walking into the community bank and negotiating with the loan department manager are over. Today, you can apply for a loan over the Internet or even use a mortgage broker to shop for your loan with hundreds of lenders. When choosing a lender, you want to avoid apples to oranges contrasts by comparing fixed rates to fixed rates, not fixed to ARM's. Create a chart that lists different types of loans, fees, and at least five mortgage providers (including a mortgage broker).

Tip #9: Get A Quality Home Inspection

Although it is hard to believe, more people pay for inspections before buying used cars than when making the biggest investment of their lives - their homes. Paying for a qualified home inspection before you buy a home isn't just spending "a little extra" for peace of mind; it's absolutely essential for anyone who doesn't want to spend thousands of dollars for repairs.

Tip#10: Peace Of Mind: Home Protection Plans

To protect both you as a buyer, as well as the seller, it is a good idea to purchase a home protection plan. What exactly is it? A home warranty, or home protection plan, is a service contract, normally for one year, which protects homeowners against the cost of unexpected repairs or replacement of their major systems and appliances that break down due to normal wear and tear. A negotiable contract between the buyers and sellers which does not overlap or replace homeowner's insurance policy, this type of warranty can save the new homeowner lots of headaches, as well as put seller's fears to rest. The warranty covers mechanical breakdowns, while insurance typically repairs the related damage. For example: if a hot water heater burst and destroyed a wall in your home, the warranty would repair the water heater and your insurance would pay to fix the wall.

Selling Your Home

Sometimes, life just hands us the inevitable: just when everything seems right with your home, something happens and you have to sell your dwelling. No matter what your reasons are for selling, remember that now is no time to dawdle, the process of preparing a home for sale can take a month or more. So, here's how to start:

1. Take a Fresh Look at Your Home

Your home looks great to you, but a buyer wants to see it since he and his family will be living in it -- so take fresh look at your dwelling. Hop in your car, drive around the block, and then scrutinize your home as a prospective buyer will see it for the first time. First, consider what's called "street appeal;" does it need washing or painting? Does the driveway need repair work? Is the landscaping in good shape? Remember, be very critical; your buyer will be.

Next, pull into the driveway and take a good, hard look. Is the yard neat and trimmed? What about the view from the front yard? Then, walk inside and size up the interior as though seeing it for the first time. Take a tour and imagine what your real estate agent might say about each room, look into cabinets, open doors, check out the bathroom.

Then, make a mental note of the things that might put off potential buyers, along with another list of the things that first attracted you to the dwelling. Remember, the home's become a great place for you, but a new buyer will see things that you don't.

2. Clean Out the Clutter Before You Start to Sell

Before putting your home on the market, get rid of clutter in every area -- closets, attic storage, kitchen cabinets, drawers, bath vanities, and shelves -- everywhere. Remember, this is no time to be sentimental: if you don't use it, lose it. Potential buyers are seriously put off by clutter, and most of us drag a lot more things through life than we really need.

Also, don't forget the furniture and fixtures when getting rid of clutter -- most of us put too much in too little space, which makes a buying prospect, think your home is too small.

Then, have a great moving sale with all the stuff you've collected and use the proceeds for paint or whatever other materials you need for repair projects. If you just can't bear to part with some possessions, store them in the attic or some other place that's out of sight to a potential buyer.

3. To Sell, Sell, Sell -- Clean, Clean, Clean

After you've cleared out the clutter, it's time to really clean. Have the carpets professionally cleaned, strip and polish the floors, scour the bathrooms, go over the laundry room, polish the furniture, scour out the cabinets, wash the windows and window coverings, and spiff up the ceiling fans and kitchen appliances. In short, clean everything.
Don't forget the exterior; paint or power-wash everything that needs the work. Remember, this is a ceiling-to-floor, roof-to-foundation clean-up project.

4. Get More for Your Home: Repairs Pay Off

After you've cleaned the place to within an inch of its life, the next project is making all the repairs necessary to attract a buyer.

So, patch up the roof, touch up all the paint, repair the screens, spruce up the porch framing, and make your entry area really shine. Don't forget to water the lawn and landscape beds, and take the time to trim, mow, edge and get rid of sick or dying plants. Inside, fix the grout in the bathrooms and on tile floors, adjust any doors that need it, fix any scratches on the walls, cover any stains, and be sure to fix any plumbing problems. Remember, do what your home needs before the first buyer appears at your door.

Also, it's a good idea to get all this done before getting the real estate broker to make the first listing -- a good agent will advise you on what needs to be done. Also, if you have friends willing to be brutally honest about what your home needs to sell, invite them to assess the fix-up needs.

There is, however, an alternative to the sweat equity you get from a total fix-up --but it carries a price. An "as-is" sale keeps you from doing all this work, but a buyer will assess about twice the price you would have paid for the repairs. Then, the buyer will deduct that amount from your asking price before making an offer.

5. Putting Your Home on the Market: Show It to Sell It

After you have cleaned, shined, mowed, and generally whipped your property into shape, it's time to attract a buyer.

Regardless of who markets your home, you or a broker, there are other, small things you must do to attract buyers. For example, even if it's bright daylight, open the blinds and turn on the lights. Also, open all the interior doors to make the home appear roomier. Be sure to remove all your kids and pets -- they're cute, but a prospect wants to see your home, not your pride and joy. In addition, make sure you pet's litter pan is clean so the home smells clean and fresh, not like air freshener. Remember, you need to make sure your home is available to be seen by a prospective buyer with as little notice as possible. That means less than an hour, or even five minutes, if possible.

6. Get a Sense of the Market

Before you put your home on the market, take a weekend day to check out the competition: homes with similar prices and in similar neighborhoods. Remember, you don't have to go out and buy new furniture just to look like that beautiful new model in the new development -- what you want is the feel of that new model -- clean, uncluttered, and fresh.

Remember, after location, the most important item to a buyer is a well maintained home. Many flaws can be overlooked if the buyer knows he can move in without a lot of trouble and expense.