1. Commit to the Process
· Buying a home is the largest and most important purchase in
the lives of most people. However, far too many want to treat it
like shopping for new clothes - drop by the mall on your lunch
hour, get excited about the suit in the window, put it on your
credit card. What may work for your wardrobe is often a disaster
with a home purchase.
· The savvy home buyer makes a conscious decision and commitment
to buy, plans carefully and deals with financing issues first,
allocates adequate time off from work to look, keeps emotions in
check, listens to the advice of a professional.
2. Hire a Buyer's Agent to Represent You
· Just a few years ago there was only one type of real estate
professional serving the home buying public. They were Seller's
Agents or Sub-Agents of the Seller's Agent. Although they worked
intimately with the home buyer they were bound by contract to do
everything possible to protect the seller and obtain the most
favorable price and terms for the seller. The problem was that
most buyers were unaware of this situation - they thought the
agent was working for them.
· Today, home buyers can and should be represented by their own
agent - A Buyer's Agent - who is bound by contract to do
everything possible to protect the buyer's interests. Only with
a Buyer's Agent can the buyer be assured of getting the best
service and counseling thorough out the buying process. To be
represented by a Buyer's Agent normally requires a written
agreement. Visit the Buyer's Page for further information on how
to choose a Buyers' Agent
3. Get Pre-Approved For Financing
· When a home seller receives an offer to purchase there are
two primary factors that are always considered immediately - How
much is the offer; and, does the buyer really have the money?
After all, a seller has no way to know who you are or how
reliable you may be. In every case a seller is more willing to
negotiate price and/or other terms if the availability of the
money is assured.
· When a home buyer makes the effort up front to get
pre-approved for financing it does two things - Establishes
exactly how much home you can afford; and, puts you in the
strongest possible negotiating position with all home sellers.
See our Mortgage Tips and Links for more info.
4. Choose the Neighborhood
· After arranging financing, the infamous "location" issue is
the next thing a buyer should consider as the home buying
process is begun. The fact that a home is a "good buy" or is "so
beautiful" can never cure the ills of being in an undesirable
area. Most buyers should consider neighborhood factors like
schools, distance from work, distance to shopping or hospitals,
general appearance and relative affordability before running out
to start "looking inside" various homes for sale. The worst
thing a buyer can do is "Fall in Love" with a home in an
unsuitable or unaffordable area.
5. Be Realistic About Needs and Wants
· There is no reason that a home search should take more than
a week in a normal market. But, everyone has heard about
someone who looked at over 500 homes during the course of 18
months utilizing the services of 5 Realtors before finally
finding that "just right" home. This only happens when the buyer
has not come to terms with what they really need, want and can
afford to buy.
· Everyone needs and wants enough bedrooms and bathrooms to
serve their family adequately. Everyone needs and wants a nice
kitchen, comfortable living area, and sufficient storage.
Everyone would like the home to be in relatively good condition.
But, the buyer who just can't live without the three car garage,
the brand new A/C & heating system, and the special oversized
game room is usually in for great disappointment.
6. Make the Right Offer
· Once the Buyer's Agent is hired, loan is approved,
neighborhood is determined and the home is selected an offer has
to be made. It needs to be the right offer. To be successful the
buyer should listen closely to the advice of the Buyer's Agent.
· A rule of thumb is that a too low first offer usually results
in the buyer either losing the home or ultimately paying more
than he should for the home. Why? Among other factors, a low
ball offer puts the seller on the defensive and contaminates the
environment needed to result in a Win-Win negotiation. An offer
that is too high can also send the wrong signal to the seller,
especially when the home was just recently put on the market. A
too high offer may not only cost the buyer money but could cause
the seller to be less agreeable with other terms and conditions.
7. Get a Home Inspection
· The home looks clean and well maintained so there is no
need to check further. Wrong! Most home buyers, even those who
have bought and sold many times, are not experts in construction
issues, building codes, safety issues and many other items. Home
inspectors, usually guided by state regulations, are able to
find things of concern that the buyer would otherwise overlook.
Since this is likely to be the largest purchase of your lifetime
the few hundred dollars spend on a home inspection is always
money well spent.
· Does this mean that if an inspector finds things in need of
repair that the seller will automatically fix them? No, it does
not. Depending upon the specific issues and the terms of the
sales contract the buyer may be able to have some things fixed
by the seller. Each situation if different and the buyer should
look to his Buyer's Agent for advice on the types of things a
seller normally can be expected to repair given the sales
contract terms and market conditions at the time.
8. Avoid Midstream Changes
· Nothing is ever constant except change. But, the wise home
buyer avoids non-essential changes if at all possible -
particularly when it comes to their financial picture.
· A buyer who will utilize mortgage financing should have
mortgage pre approval before starting the search process. This
pre approval is always subject to financial issues remaining
unchanged until closing. Buying a new car, loaning money to a
relative, splurging on a vacation, missing a credit card
payment, etc., all can be factors that impact the pre approval
and jeopardize the buyer's ability to finalize a mortgage loan
for the amount desired.
· Similarly, a cash buyer who needs to sell stocks, make IRA
withdrawals or otherwise move funds around should do so well
before closing and preferably before the search process begins.
An unexpected delay of days or weeks while a retirement plan
administrator processes your withdrawal could make the
difference between buying the home you want or watching someone
else buy it.
9. Get a Survey and Title Insurance
· Real estate purchases are among the most complex business
transactions that most people ever undertake. There are a
multitude of factors to be considered and many things that can
go wrong. However, there is no reason to not receive clear title
and a property free from encroachments.
· The Survey is a verification of property boundary lines and
should display any encroachments or easements. For example,
assume you are a buying a home in an older subdivision where
many homeowners have added decks, garages and so forth over the
years. It is possible that one of your neighbors' additions was
not built within his property boundaries but is situated partly
on the lot you are purchasing. A survey should reveal this
problem before you become the owner.
· Title Insurance is a guarantee that when you purchase real
estate there is no one else with any claim to your property.
Should someone claim a prior ownership interest subsequent to
your purchase of the property the title insurance company is
obligated to protect your ownership interest. An alternative to
title insurance is something called an Abstract of Title which
is a condensed history of all transactions affecting a
particular tract of land. Consult your attorney if you are
considering an Abstract of Title.
10. Be Pro-Active
This may seem to be a given to most people but it is truly
amazing how many home buyers think that all they have to do is
sign the contract and everything else will magically occur
without their participation. The fact is that there are many
details that only the buyer can resolve to assure a timely,
trouble free purchase and closing. The Buyer's Agent will
counsel and assist throughout the process but the buyer will
have the best overall result by being fully aware of all aspects
of the process and asking as many questions as possible along
Regarding the home inspection
buyer should ALWAYS attend the home inspection with the inspector. The question
and answer dialog can yield more value than the report.
Remember that the appraiser is a "jack of all trades" and is not the highest
authority regarding a particular aspect of your home. For example, if you have a
potential furnace problem, a furnace expert is better source of information.
the inspector provides you with estimates regarding repairs, do not consider
these estimates to be accurate. They are not the best source of information
regarding specific estimates on particular aspects of your home. You need to get
for advice on which home inspector to select.