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Purchasing a home is one of the smartest investment
decisions you can make. When you pay rent, you are paying someone else's
mortgage and building equity for them. It's like putting money in the bank
for someone else. Some of the advantages and benefits of owning a home are
as follows:
- Credit:
Owning a home helps you establish financial credibility.
- Independence:
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.
- Investment:
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.
- Pride:
A home reflects its owner's values and lifestyle. Owning a home can provide
you with a source of pride, enjoyment and satisfaction.
- Security:
A home can provide security against inflation because the value of your home
increases as prices go up.
- Stability:
Being established in a community provides a sense of belonging, stability
and security.
- Tax Advantages:
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 are thoroughly 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 hotline 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.
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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.
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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.
| 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.
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| 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 .
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| 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 neighbors
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.
- 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.
If you do not have an attorney, don't hesitate to call us for a referral.
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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.
If your potential home is
in our service area, please do not hesitate to contact us for information, a
quote or to schedule an inspection.
Click here to
view our service area and contact phone numbers.
- Home Inspectors vs. Engineers
Home Inspector:
A person who examines any component of a building, through visual means
and through normal user controls, without the use of mathematical sciences.
- Engineering:
Analysis or design work requiring extensive preparation
and experience in the use of mathematics, physics,
chemistry and the engineering sciences.
- 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.
MORTGAGES:
We have provided some general information regarding
mortages at the following link:
Mortgage Information
The following are some additional sites that
may be helpful in the buying process:
HUD
- First Time Home Buyers Tips
Home
Buyer's Information Center
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