STARTING THE BUYING PROCESS
Where do I begin the process of looking for a home?
The first thing you should do is to begin focusing on what you're looking for in a home. You can start by establishing priorities in the following three areas: Location: Are you relocating to a new town because of a new job or to be closer to your current job? How will the location of schools, shops, and transportation affect your choice of neighborhood? Personal Tastes: How large of a home do you need? What style of architecture do you prefer? What type of lot do you prefer? Depending on where you move to, you may have a choice of homes in dozens of styles, sizes, and settings. Budget: How much home can you comfortably afford? As you consider these issues, do a little research of your own. Look through magazines for ideas about home styles and features. Drive through neighborhoods that appeal to you to see what's available. Search the Internet to learn about current prices in the areas you're considering. Talk to friends about the features that you'd really like to have in your home. The more knowledgeable you become, the better your final decision is likely to be. Then sit down and consider carefully all the things you're looking for in a home. Make your Wish List and you'll begin to get a good idea of what you'd like your dream home to be.
How do I find the right sales professional to work with?
The key word here is "right." While there's certainly no shortage of qualified sales professionals to choose from, it's important that you find one who can fully understand your wants, needs and individual tastes, and whose personal and professional judgment you respect. Many real estate companies throughout the United States have both buyer and seller agencies. A sales professional should present you with a disclosure statement before any working relationship is created. That statement should explain what a buyer's agent is and does, what a seller's agent is and does, and what dual agency means. It is very important to remember that real estate firms are governed by laws that can vary by state. Disclosure laws also vary by state.
How do I know how much home I can afford?
We've found that affordability is probably the single biggest concern of today's first-time home buyers. Given the wide range of media coverage regularly devoted to the issue, it's not surprising that many young families wonder how long it will take them to afford their first home. Our advice: Don't sell yourself short. Talk to your real estate professional. A good sales professional is committed to honestly and responsibly working with you to determine your affordable price range. There are many financing options available today, and some include low down payments. Your sales professional will work with your lender to help find an option that fits your budget, and you may be surprised at just how much home you can afford. For tips on various mortgages and more, see the "Financing" section of our website.
RENTING VS. BUYING
How does buying compare to renting?
Renting offers a lifestyle that's nearly maintenance-free. That may appeal to you, but consider that renting offers you no equity, no tax benefit, and most likely no protection against regular rent increases. If your rent has averaged $1000 a month for the last 5 years, you've spent $60,000 with nothing to show for it. Isn't it time you invested in yourself instead of your landlord? Several financing options hold special advantages for first-time buyers or families with limited cash reserves. FHA-insured and VA-guaranteed mortgages can minimize or even eliminate your down payment. You may also consider a lease-purchase agreement, or borrow cash for a down payment from life insurance, profit-sharing or a retirement account. In addition to tax deductions you'll likely receive that can partially offset the cost of real estate taxes, insurance and home maintenance, your home may appreciate in value. If you purchase a home that costs $200,000 and the property increases in value only three percent each year, your potential appreciation in just two years is nearly $6000. And due to changes to the tax code, subject to certain restrictions, up to $250K (or $500K if married filing jointly) of the profit you make when you sell the house is tax-free as long as you own the property for a minimum of 24 months.
CHOOSING A COMMUNITY
*BUYING TIP If commuting time is important to you, take a "test drive". Get up extra early a few days and drive to work from the home you're considering.
What should I think about when I'm deciding which community I want to live in?
Good city services, nice parks and playground facilities, convenient shopping and transportation, a track record of sound development and good planning. These are just a few considerations that are important to many people when they choose a community in which to live. As for individual neighborhoods within a town or city, there is no better source of information than your real estate professional. Sales professionals know the people and the communities they serve, and chances are they can help you find a neighborhood that really fits your family's needs. Check out our Communities pages on this website to learn more about communities you may be interested in.
Where can I get information about local schools?
Again, a good real estate professional is perhaps your best source. They know where the local schools are and can provide you with valuable public information about school districts, including test scores, extracurricular activities, bus service and more.. And if you want to do a little searching on your own, the Internet may also be a good place to start, our Communities pages on this website have School information for each community that we serve.
How can I find out what homes are really selling for in a given neighborhood?
In most areas, home sales are a matter of public record. You can get all the information you want about recent sales in a given area by searching county records or other sources on the Internet. But beware of the "Zillow Factor"! Sites such as Zillow don't always contain accurate and timely information. An easier way is to ask your real estate professional. If you're interested in a particular home, a sales professional will be able to provide you with a list of comparables, sale prices of homes in the area that are roughly the same size and age as the home you're considering. Although there will certainly be some differences between the homes; the house next door may have an extra bedroom, or the one down the block may be older than the one you're looking at, it's a good basis for evaluating the seller's asking price.
PROPERTY TAXES
How can I find out what my property tax bill will be?
Usually, the total amount of the previous year's property taxes is included on the listing information sheet for the home you're interested in. If not, or just to double check, look the property up online on the County Tax Assessor's site. Remember, tax rates change from year to year, so the previous year's bill should be considered simply as a "ballpark" figure of what you would pay. For a more precise projection, call the local assessor's office for assistance, or ask your real estate professional.
UNDERSTANDING LISTINGS
If I'm moving a considerable distance, is there any way I can screen homes before I start traveling?
Of course! The internet has made it relatively easy for buyers to access detailed information on homes for sale practically anywhere in the country. Over 90% of buyers now use the internet to begin their home search. Today's Multiple Listing Services (MLS) include as many as 90 percent of the homes listed in any given community. Use our website to search all available homes for sale (not just our listings, but the entire MLS) and register on your agent's website for e-mail updates for new listings that meet your criteria.
HOME HUNTING TIPS
When I start visiting homes, what should I be looking for the first time through?
The house you ultimately choose to call home will play a major role in your family's life. A home can be an excellent investment, but more importantly, it should fit the way you live, with spaces and features that appeal to everyone in the family. As you look at each home, consider these important factors: Is there enough room for you now and in the near future? Is the home's floor plan right for your family? Is there enough storage space? Will you have to replace the appliances? Is the yard the size that you want? Are there enough bathrooms? How much maintenance and/or decorating will you need to do right away? Later? Will your present furniture work in this home?
How many bedrooms should I be considering?
Whether you are married or not, or have kids or not, spare bedrooms come in handy when family and friends come to stay. And when you're not having guests, extra rooms are useful as a library, office, or TV room. Another good reason to choose a home with extra bedrooms: extra space will make your home more appealing to a larger number of interested buyers when it comes time to sell.
Is an older home as good a value as a new home?
It's a matter of personal preference. Both new and older homes offer distinct advantages, depending upon your unique tastes and lifestyle. New homes generally have more space in the rooms where today's families do their living, like a family room or activity area. They're usually easier to maintain, too. However, many homes built years ago offer more total space for the money, as well as larger yards. Some people are charmed by the elegance of an older home, but shy away because they're concerned about potential maintenance costs. Consider a home warranty to get the peace of mind you deserve, we strongly recommend it.
What do I need to bring along when I'm looking at homes?
Helpful Items: Notebook and pen for note- taking, flashlight for seeing enclosed areas, tape measure for checking room sizes, clearances, etc. Be prepared to investigate a little. After all, you want to know as much as possible about the home you buy. Sellers understand that because their home is on the market, it will be looked over pretty thoroughly. If you need to go back to a home for another look, your sales professional will be happy to schedule an appointment. Also, be sure to ask any questions you have about the home, even if you feel you're being nosy. You have a right to know, and your agent can get the answers you need to feel more confident that you've chosen the right house.
What should I ask about each home that I look at?
As a rule of thumb, ask any questions you have about specific rooms, features, or functions. Pay particular attention to areas that you feel could become "problem" ones, i.e. additions, defects, areas that have been repaired. And above all, if you don't feel your question has been answered, ask until you understand and are satisfied. In most cases, your real estate professional will be able to provide you with detailed information about each home you see. You can also use the flyers or your notebook to note room sizes, features that need a second look, and other comments. Take photos of any homes you are interested in. After a long day of home tours, it might seem like a blur...you may forget which home had what!
What should I tell the sales professional about the homes I look at?
Tell your agent everything you like and don't like about each home you see. Don't be shy about discussing a home's shortcomings. Is the home too small for your needs? Let your agent know. Was the home perfect except for the carpeting? Let your agent know. This is why you may want to be represented by a buyer's agent, because he/she will keep your input confidential. A buyer's agent puts the interests of the buyer, not the seller first.
How many homes should I look at before I buy?
There is no set number of homes you should look at before you decide to make an offer on one. That's why providing your agent with as many details as possible up front is so helpful. The perfect home may be waiting for you on your first visit. Even if it isn't, the house-hunting process will help you get a feeling for the homes in the community and narrow your choices to a few homes that are worth a second look. If you're looking in more than one community, try to make the most of each house-hunting trip.
When you find a home you may be interested in buying, you may have more questions for the owner: How much money do you pay for monthly utilities? Have you had any problems with water or dampness in the basement? Are there defects or problem areas that need to be fixed right away? How old is the furnace and the central air conditioning system? How old is the roof? Have you experienced any leaking? Most of those questions are covered in the required SRPD (Seller Real Property Disclosure), a written form completed by the seller and provided to the buyer. If you or your agent see any "red flags" on the SRPD, or in your visual inspection of the house, don't hesitate to ask for more information.
APPRAISALS, INSPECTIONS, INSURANCE
How do I know I'm getting the best value for my money?
A professional appraisal is the best way to tell if a home is priced fairly. A real estate appraisal is an unbiased opinion of a property's value based on its style and appearance, construction quality, usefulness, and other factors, including the value of comparable properties nearby. When you apply for a mortgage, the lender will have a professional real estate appraiser perform an appraisal of the property.
What does a home inspector do?
For your own safety, and to make sure you're getting the home in a condition that you expect, using a professional home inspector (and possibly other inspectors) is highly recommended. A home inspector will check a variety of things such as your home's plumbing, heating, cooling, and electrical systems, and look for structural problems like a damp or leaky basement, etc. Usually, you call an inspector immediately after you've made an offer on a home. However, before you sign any written offer, make sure that it includes an inspection clause, which says that your purchase obligation is contingent on the findings of a professional home inspector. Your inspector will not tell you whether he or she thinks the home is worth the money you are offering. Rather, the inspector's job is to make you aware of conditions that need further consideration or repairs that are recommended or necessary. A seller may be willing to renegotiate a price to accommodate needed repairs, or you may decide that the home will take too much work and money. A professional inspection will help you make an informed decision. In choosing any inspector, consider one who is licensed and has been certified as a qualified and experienced member by a trade association. Your real estate professional can refer you to qualified inspectors in your area.
Should I be present during the inspection?
Yes. It's not required, but it is very much to your advantage. You'll be able to clearly understand the inspection report and know exactly which areas need attention. Plus, you can get answers to many questions, tips for maintenance, and a lot of general information that will help you when you move into your new home. Most importantly, you'll see the home through the eyes of an objective third party.
Are there any other inspections I need to have done?
In addition to the overall inspection, you may wish to have separate tests conducted to check for insects (pest control inspection), the presence of radon gas, and the quality of drinking water, to name a few. Talk to your real estate professional for information about these tests and companies in the area that perform them.
Do I need to talk to my insurance agent?
Yes, and the sooner the better. Your real estate professional can help you with this, but most insurance professionals have a lot of experience in working with homeowners and can offer useful tips about homeownership, particularly regarding home safety and keeping your premiums low. Once you've found a home, work with your insurance agent to develop a homeowner's policy that meets your individual needs. You'll need to bring evidence of a fully-paid policy for your mortgage lender when you come to closing. Make sure you take this step with your insurance provider as early as possible; in many locations you'll have trouble assuming title if you don't have proper insurance in place.
When I've found the home I like, how do I make an offer?
When you've found a special house you want to call home, you'll probably feel excited and a bit nervous. Let the sales professional know you're ready to write an "offer to purchase", a written document that declares how much you are willing to pay for the home provided that certain conditions are met. Your offer should have a time limit for the seller to accept it, reject it, or make a counter-offer. If a counter-offer is made, you will have some time to respond. Often, several offers go back and forth until an offer is accepted, or one party decides to end negotiations.
How do I determine the amount of my initial offer?
There is really no rule to use in calculating an initial offer. Naturally, the buyer wants the best value and the seller want the best price, but negotiations can be influenced by many factors, such as a seller who may be changing jobs and wants to sell quickly, or a buyer who is set on a specific home. After you've looked at the home's features, asked questions, checked comparables, and talked about it with your sales professional, you should have a good idea of what the home's value is in the current market. Consider what you can afford, and make an offer that you consider to be fair. Most buyers and sellers negotiate on price, with both sides "giving" a little until both agree.
What is "earnest money" and how much do I need?
When you sign an offer to purchase, your sales professional will ask you for "earnest money." This refers to a monetary commitment that shows you are serious about wanting to buy. Usually, you will be asked to write a check for one to 10 percent of the sale price. This money will be held in a special escrow account. If your offer is accepted, your earnest money will be included as part of your down payment. If your offer is not accepted, you'll get back all your earnest money. But keep in mind that if you back out, you may forfeit the full amount.
Is there any way I can protect myself against emergency repair bills in my new home?
Yes. Home warranties offer you protection against many potentially costly problems not covered by your homeowner's insurance. Such warranties have become increasingly popular in recent years, and for good reason. The coverage can save you thousands in the event of a major mechanical breakdown at a time when your cash reserves have been depleted by your down payment and moving expenses.
CLOSING PROCEDURES AND MOVING
There's so much to remember before I close. What do I have to do? Your sales professional can help you with many of these considerations: Are all the necessary inspections complete? Are all the required repairs complete? When will you conduct your final walk-through inspection? Have you confirmed a date, time, and place for your closing? Who will conduct the closing? Is your insurance policy ready to go into effect the day you close? What form of check should you use (and who should it be made out to) to pay for the closing costs? Has your closing sales professional told you the closing amount? Do you have receipts for the items you have already paid for, including your deposit and inspection fees? Bring your checkbook to cover any last-minute extras that might have been overlooked.
What should I look for on my final walk-through?
In most cases, you'll be given the opportunity to inspect the home within a few days prior to closing. At this time, it's important to check on any work the seller agreed to have done in response to your initial inspection.
What will happen on closing day?
The escrow agent will prepare a list of all financial adjustments for each party (the estimated HUD). These include the money you owe the seller (the remainder of the down payment; prepaid taxes) and what the seller owes you (unpaid taxes; prepaid rent). You will sign the loan documents, including the Deed of Trust. This gives the lender legal rights to the property if you don't make your payments. You will sign the mortgage note (the promise to repay the loan in regular monthly payments). You will get title from the seller in the form of a signed deed. The lender's agent will collect the closing costs from you and give you a final settlement statement of all the items you have paid for. The deed and mortgage will be recorded in the town or county Registry of Deeds.
Is there anything I should do immediately after closing?
The first thing you'll want to do is have the locks changed. Also, put your deed and other important paperwork from the closing in a secure place, preferably a safe deposit box. Even though it's all on file with the county, it's smart to know where your copies are and have access to them at all times. If you have not already done so, make arrangements to have the utilities changed into your name.
Should I move myself or use a moving company?
In almost every case, you can save yourself time and energy by using a reputable moving company to help you move. Ask your sales professional, friends, and co-workers for recommendations, and get estimates from several companies. Don't choose a mover based on price alone; consider the reputation and professionalism of the company, too. Work closely with the moving company to coordinate your efforts and your move will be achieved with maximum efficiency.
