8 home-buying tips for 2012
If you're ready to jump into the housing market, these tips can help you find a home that's right for you, your family and your wallet.
8 home-buying tips for 2012
Run the numbers
Just because the housing market is in prime shape for buyers doesn't mean it's a good time for you to pull out your checkbook. Putting together a financial plan to determine whether you can really afford to buy a home before you start to shop for one can save you significant amounts of time and money.
So, should you buy or rent a home? The New York Times offers a handy calculator on its website that help you determine if renting is (still) your best bet.
8 home-buying tips for 2012
Be an informed buyer
You're not going to buy a house simply because you think a photo of one on the Web looks lovely, but you can use the Internet to research the price and area of practically any type of property.
That said, there's nothing better than talking to people in the neighborhood for "on the ground" intelligence. If you're planning to buy a fixer-upper, Attorney Heather Wright, of Southampton, New York suggests that you check with the building inspector for the area to make sure your plan for renovation is permitted within the local zoning code.
8 home-buying tips for 2012
Get a copy of your credit report
8 home-buying tips for 2012
Get pre-approved for a mortgage
Pre-approval can be a good gut check on your price range. Gone are the days when banks would fork over cash to anyone with a heartbeat. The best way to start: Ask friends for referrals to mortgage brokers, and shop around with banks and credit unions. Make sure to compare apples to apples and to ask the broker the total costs to you at closing. You should also know that once you actually find a house, the mortgage process is on the same pain level as a root canal, only it requires more patience -- and there's no Novocain. You'll need to dig up tons of paperwork; and fair warning: There will be multiple requests for even more documents as you move towards closing.
Michael Raimi, Managing Director of WCS Lending, suggests that you be "realistic about a closing date." He warns that short sales as well as certain property types, such as coops and condos, can be more difficult to finance. William Wright of Americana Mortgage notes that "Just because you are approved does not mean you are ready to close. Withdrawing money from bank accounts, missing payments, or applying for new credit could cause your loan not to close." The best thing you can do in this period, Wright adds, is nothing.
8 home-buying tips for 2012
Find an Agent
As much as everyone complains about real estate agents, I still think that it's tough to go through the home buying process alone. In some markets, buyers' brokers are available, but the most important qualities in brokers are: honesty, experience, good connections with other agents; and good referrals from buyers like you. It also makes sense to work with Realtors who are familiar with the area that you are targeting.
8 home-buying tips for 2012
Hire a real estate attorney
This is a major transaction in your life, so don't try to save money when it comes to legal fees. Even if your mortgage company provides a lawyer, hire your own to help draft all documents and to ensure that your interests are being represented at every step of the process. Be sure to choose a lawyer who specializes in real estate. Your divorce lawyer may be a great guy, but you need expertise for this part of your life.
8 home-buying tips for 2012
Schedule a home inspection
Think you've found your dream house? Maybe, but unless you have an Licensed Professional Engineer walk through the premises with you, you might be buying a new roof in a couple of years. Don't get freaked out if a problem arises during the inspection -- remember that it can often be solved with a simple adjustment in price. But without an engineer's sign off, you may be buying a structurally flawed house that ends up being a money pit.
8 home-buying tips for 2012
Purchase homeowners insurance
If you have only been a renter, this can be an eye-opener in terms of cost. Make sure that you understand the difference between insuring the structure and the contents of a house and remember that homeowners insurance covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people (including damage caused by household pets). If you are buying property that is close to water, make sure that you have an agent who can help with flood insurance and if you are in an earthquake zone, that is also separate coverage.