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Buying a Home : How to Avoid Paying Too Much!
Part #1
Whether you're a first-time buyer or an old pro at the real estate game, buying a home can be a daunting process. It's an emotional time filled with difficult choices-and each decision you make has money riding on it.
Finding the right home to meet your family's needs is hard enough. But knowing how to avoid paying too much for that home once you've found it is another job entirely.
As someone who has helped countless buyers find their dream homes and save money at the same time, I've developed this guide to help you avoid the pitfalls inherent in the homebuying process. I'll show you not only how to make sure you've found the right home, but also how to negotiate a price to your advantage.
In today's complex, fast-paced market, you can't afford to learn these lessons through trial and error. The tips contained in this report will go a long way toward making you a savvy buyer.
Know what you're shopping for before you start.
Before you begin shopping, understand that there are two homes out there vying for your interest-the one that meets your needs vs. the one that fulfills your desires. In a perfect world, you'd find a home that satisfies both. But since this isn't a perfect world, you're going to find yourself confronted with choices.
Do you choose the three-bedroom home with room for your family to grow, or the one with the big back yard and deck that's perfect for entertaining? Is having a big kitchen more important to you than a few extra rooms?
When you start shopping, you're going to find homes you fall in love with for different reasons. That's why you should list the features you want before you start shopping. Use the form provided at the back of this report and break your list into two categories-"Needs" and "Desires"-and prioritize the items you come up with.
Understanding what you really need as opposed to what you'd like to have will help you keep your priorities straight as you shop around. I've seen people fall in love with a home for the wrong reasons, then regret their purchase when the home fails to meet their needs.
Don't let emotion cloud your judgement. Satisfy your needs first. If you find a home that meets your needs and fulfills some of your desires, so much the better. The important thing is to know the difference before you get caught up in the excitement of the hunt.
Shop for a mortgage before you shop for a home.
Getting a loan preapproval is the smart way to shop for a home. It tells sellers that you're a serious prospect, and you know in advance the maximum mortgage you can afford. Make sure you get a commitment in writing. I've seen many buyers make the mistake of learning what they qualify for but not getting that preapproval in writing.
The good news is that it's easier than ever to qualify for a home loan. Lenders have modified qualification rules and created programs designed to help people even if they have problems in their credit or employment histories. Many programs call for dramatically reduced down payments-the biggest obstacle for first-time home buyers in particular.
Many programs call for dramatically reduced down payments-the biggest obstacle for first-time home buyers in particular.
Pick a winning team to help you.
From picking a mortgage to finding the right home to inspections to negotiating the best deal, it can be exhausting for even the hardiest souls. That's why most people have a Realtor® in their corner.
A good agent has the knowledge and experience that come from years of helping both buyers and sellers. He or she also has a team of other professionals to put at your disposal-lenders, lawyers, home inspectors, movers, etc.
Most sellers you encounter are certainly going to have professionals in their corner. Having a pro on your team is the best way to make sure you get the best deal possible.
Make sure your Realtor® knows what you are looking for.
Once you have a clear, detailed picture of the home you want, make sure your agent has the same picture. This communication is critical. Otherwise, you'll both waste your time looking at homes you're really not interested in. Also, make sure your Realtor® knows your priorities. Your shared goal is to find a place that meets all of your needs; your Realtor® will then try to satisfy as many of your desires as possible.
A good Realtor® will ask you several questions about what you're looking for and what you can afford. And they'll listen carefully to your answers.
It's a cliché, but ... location, location, location.
The desirability and resale value of your home-to-be depend on location more than any other single factor. Again, don't let emotion get in the way of a wise investment. No home is an island, and the value of yours is affected by the homes that surround it.
Assuming you've already considered the elements that make up a desirable community-character, quality of schools, access to work places and services, recreational facilities, etc.-there are several elements that combine to create a good location.
Your first consideration is the neighborhood. Every neighborhood has its own unique character; you need to make sure you'd be comfortable in the one you're thinking of living in. Take a long walk and observe carefully. Do people take care of their yards and homes? Are the yards fenced? Do children play in the streets? Talk to the neighbors and ask questions that give you a better feel for the area. But be careful not to appear judgmental-you might be talking to a future neighbor.
If the neighborhood is to your satisfaction, look at homes on the market in the area. Extremely large homes surrounded by smaller ones tend to appreciate less than a large home among other large homes. Conversely, the smallest home in the neighborhood tends to be "pulled up" by the other homes on the block. However, it might take longer to sell a smaller home when the time comes because many people are unwilling to pay extra for the neighborhood.
The outer edge of a neighborhood is usually not good for resale value. There are noticeable dividing lines between unlike neighborhoods. It could be a difference in architectural styles, home size, property use or something else. Look for a home in the middle of a community of similar homes; it will hold its value better.
An exception to this rule is a house on the edge of a neighborhood bounded by woods, park land, a golf course or other open space. Natural boundaries appeal to buyers, and these "edge" homes can actually command a better price. Of course, the exception to this rule is when there's an unpleasant use planned for the open space. An open field with a babbling brook is nice; a new freeway, strip mall or factory isn't.
Other things that can negatively affect property values are traffic, sounds, smells, etc. Be sure to give the neighborhood a long, hard look. The home you're interested in may be perfect, but if the neighborhood has problems, your investment won't be worth as much when the time comes to sell.
Click Here to Continue to Part #2Download the Home Buyer's Profile Sheet (.PDF)
