Buying a Home with Schuler Bauer

Success Tips for Home Buyers

10 Things to Take the Trauma Out of Homebuying

  1. Find a real estate professional who’s simpatico. Homebuying is not only a big financial commitment, but also an emotional one. It’s critical that the practitioner you chose is both skilled and a good fit with your personality.
  2. Remember, there’s no “right” time to buy, any more than there’s a right time to sell. If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes don’t usually occur fast enough to make that much difference in price, and a good home won’t stay on the market long.
  3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.
  4. Accept that no house is ever perfect. Focus in on the things that are most important to you and let the minor ones go.
  5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price may lose you the home you love.
  6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself—room size, kitchen—that you forget such issues as amenities, noise level, etc., that have a big impact on what it’s like to live in your new home.
  7. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.
  8. Factor in maintenance and repair costs in your post-homebuying budget. Even if you buy a new home, there will be some costs. Don’t leave yourself short and let your home deteriorate.
  9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits.
  10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually from 1998 to 2002, a home’s most important role is as a comfortable, safe place to live.

Hidden Home Defects to Watch For

No home is flawless, but certain physical problems can be expensive. Watch for:

  1. Water leaks. Look for stains on ceilings and near the baseboards, especially in basements or attics.
  2. Shifting foundations. Look for large cracks along the home’s foundation.
  3. Drainage. Look for standing water, either around the foundation of the home of in the yard.
  4. Termites. Look for weakened or grooved wood, especially near ground level.
  5. Worn roofs. Look for broken or missing copings and buckled shingles as well as water spots on ceilings.
  6. Inadequate wiring. Look for antiquated fuse boxes, extension cords (indicating insufficient outlets), and outlets without a place to plug in the grounding prong.
  7. Plumbing problems. Very low water pressure, banging in pipes.

10 Tips for First-Time Homebuyers

  1. Be picky, but don’t be unrealistic. There is no perfect home.
  2. Do your homework before you start looking. Decide specifically what features you want in a home and which are most important to you.
  3. Get your finances in order. Review your credit report and be sure you have enough money to cover your downpayment and your closing costs.
  4. Don’t wait to get a loan. Talk to a lender and get prequalified for a mortgage before you start looking.
  5. Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion.
  6. Decide when you could move. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area?
  7. Think long-term. Are you looking for a starter house with the idea of moving up in a few years or do you hope to stay in this home longer? This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that suit you best.
  8. Don’t let yourself be “house poor”. If you max yourself out to buy the biggest home you can afford, you’ll have no money left for maintenance or decoration or to save money for other financial goals.
  9. Don’t be naïve. Insist on a home inspection and, if possible, get a warranty from the seller to cover defects within one year.
  10. Get help. Consider hiring a REALTOR? as a buyer’s representative. Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is working only for you. And often, buyer’s reps are paid out of the seller’s commission payment.

7 Reasons to Own Your Own Home

  1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, property taxes you pay, and some of the costs involved in buying your home.
  2. Gains. Between 1998 and 2002, national home prices increased at an average of 5.4 percent annually. And while there’s no guarantee of appreciation, a 2001 study by the NATIONAL ASSOCIATION OF REALTORS? found that a typical homeowner has approximately $50,000 of unrealized gain in a home.
  3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
  4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
  5. Predictability. Unlike rent, your mortgage payments don’t go up over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will rise.
  6. Freedom. The home is yours. You can decorate any way you want and be able to benefit from your investment for as long as you own the home.
  7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

To calculate whether renting or buying is the best financial option for you, use this calculator:
http://www.mortgagecalculator.org/calculators/buy-vs-rent-calculator.php

Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS® Copyright 2004. All rights reserved. www.REALTOR.org/realtormag