REALTY 1 ADVANTAGE

HELPFUL HINTS WHEN BUYING A HOME

Whether you are a first time homebuyer or not, you should consider carefully your reasons for buying a home and understand the benefits and responsibilities that come with ownership. Following is an overview of some general information to bear in mind as you go through the process of purchasing a home.

There can be significant personal and financial benefits to buying a home versus renting one. These include:

Security

A renter has no real security to stay in a home beyond the term of the lease. Homeowners know they can live in a home as long as the mortgage payments are made.

Privacy/Greater Sense of Freedom

In general, a homeowner has more privacy and control over the property than a renter does. An owner can decorate or remodel to taste, own pets, landscape and engage in activities that might be prohibited in a rental.

Rents usually rise faster than mortgage payments, whereas principal and interest payments remain the same throughout the length of a fixed interest loan. Property taxes and insurance can increase mortgage payments if they are included in the monthly total.

Over time, home values have increased at a higher rate than inflation. As the equity in a home increases, so does the owner’s net worth.

Federal tax laws allow a homeowner to deduct the property taxes and interest paid on a home loan from taxable income. In addition, part of the capital gains on a home is not taxable when a home is sold.

Along with benefits often come responsibilities. Reflect on the following issues as you consider a home purchase:

Obligating oneself to a long-term loan means being responsible for not only the cost of the home, but the interest over the period of the loan, usually up to 30 years. The total debt must be reported on one’s financial statements. Missed or late payments can have a negative affect on a credit rating.

If something breaks down or wears out, the homeowner must pay for the repairs, not the landlord. Having sufficient funds to cover emergencies and do preventive maintenance is essential to keeping a home in good condition.

When local governments do improvements to a neighborhood, such as roads, sewers or sidewalks, they will often recover the costs by assessing homeowners a portion of the bill. Homeowners are obligated to pay these assessments.

Some neighborhoods require that all homeowners adhere to certain rules to ensure that home values and general appearances are maintained. These rules often include things like keeping the home and grounds tidy, not parking RV’s and boats on the street or not allowing pets to roam freely.

Buying a home truly is a ‘process’. It requires learning about many things and then acting on them in a timely manner. So what should a homebuyer expect to know and do from start to finish?

It is easy to get overwhelmed by all the things required to buy a home. Knowing up front that there will be many challenges between now and when you actually get into your new home is fundamental to a successful purchase process. Get into the proper ‘mind set’ in order to avoid wasting time and money and to keep your sanity. Hang in there…it’s worth it in the long run!

Do research on home buying. Read articles and books, search the Internet, get advice from professionals like lenders, builders, inspectors, real estate agents, attorneys and associations. Ask friends and family for information and referrals. Leave no stone unturned to get smarter about your investment!

Save as much money as possible. You will need funding for the down payment, closing costs, moving expenses, home fix-up and numerous other things that inevitably crop up. Interview several lenders to achieve the best loan package. It is important to have discipline to avoid financial over-commitment. See our website page on ‘Buyer Pre-Qualification’ for more details on our recommended list of mortgage brokers and lenders.

Finding homes for sale is much easier today than in the past as there are so many resources available now. Your Realty 1 Advantage agent will provide a wide scope of assistance by finding listings that meet your requirements and help you identify neighborhoods that are appreciating in value. You should also search for homes in newspapers and real estate publications, on the Internet, TV and radio, in your neighborhood and between home and work. Drive around various neighborhoods and compare the plusses and minuses of each. Speak to everyone you meet for leads. Who knows? The person you talk to could be contemplating selling their home.

Besides the actual quality and price of a home that meets your parameters, give serious consideration to such factors as school districts, shopping conveniences, accessibility to freeways and bus routes, land use and zoning, and public utilities and services. This will be your new community to live and play in.

Once you decide on the right home for you, be prepared to do several things very quickly. Use your Realty 1 Advantage agent to negotiate the best deal for you! Our agent will then write up the offer immediately as there are likely to be others making offers, too. Make yourself available night or day during negotiation should the seller make a counter-offer. Have your checkbook ready to write a check for the earnest money deposit. After agreement has been reached, contact your lender to get the funding process started. Have a home inspection done as soon as possible and make the purchase contingent upon getting a ‘good’ inspection. Set a date for closing.

The buyer always has the option to choose which escrow company to use for closing. Realty 1 Advantage recommends using Professional Escrow Services, a quality firm we have an established relationship with who offers a 25% savings on escrow fees. Your Realty 1 Advantage agent will help you coordinate the closing schedule with escrow, the lender and the seller. Keep your own schedule flexible several days prior to and on closing-day as last minute details will need to be attended to immediately.

As soon as you know the closing date, set a moving date. Arrange for trucks and helpers, get plenty of boxes and start packing! Remember to notify utility companies, the garbage company, the post office, newspapers, your insurance company, schools, and whoever else needs to know. If possible, take time off to dedicate to the move…you’ll need it!

As you can tell, there is a lot to go through when buying a home. We hope this information has been helpful and will better prepare you for your purchase. Rest assured that Realty 1 Advantage will make your experience as free of stress as possible and provide expert service the entire way.

Good luck and happy home buying!