Tag: Home Buying Tips

There is perhaps no more exciting and nerve-wracking time in the home buying process than when you decide to make an offer on a home. If it is accepted, you will be on your way to owning a new home-if not, you will be forced to make some difficult decisions.

Your REALTOR® will help you get through the process of making an offer on a home. He or she can give you advice on how much to offer and what concessions you will make. But there are a few decisions you will have to make yourself, and be prepared to stick to them.

How High Will You Go?

If your initial offer on the home of your dreams is rejected, the seller will usually come back with a counter offer. In most cases they will ask for a higher purchase price and may refuse some of the items you requested in your initial offer, such as repairs to be done to the home prior to the sale. This is a normal part of negotiations, but especially for first time buyers it can feel like a very frustrating process.

When the counter offer comes back, you will have to decide if the purchase price is one you can live with. Is it within your budget? Is it a fair market price for the home? Your REALTOR® can give you the answer to this second question, but the first is up to you to decide.

What Is Non-Negotiable?

What parts of your offer are you unwilling to back down on? If the house really needs a new roof and you don’t want the expense and hassle of taking care of it yourself, then don’t back down. It might be worth paying a little more in the purchase price with the agreement that the seller will have the roof replaced than to pay less for the house and have to do it yourself.

Decide in advance which items are completely non-negotiable, and stick to your guns. If the seller won’t budge, be prepared to walk away. As hard as it might be to say goodbye to that home you want, you have to be realistic about what you can afford and what work needs doing on the home.

It is very easy to get caught up in the excitement of negotiating and the desire to own that particular home, but try not to let emotions rule your decisions. After all, once you sign those papers and the deal is final, you won’t be able to change your mind.

One of the many things you will have to think about while you are in the process of buying a new home is the insurance you will need to protect it. Homeowner’s insurance is more than just a good idea-it is required by your lender as part of your mortgage contract. You will not be able to close escrow on your home if you do not have an appropriate homeowner’s policy in place.

Homeowner’s insurance protects your home against multiple possible risks, from fire to burglary. A comprehensive homeowner’s insurance policy will provide coverage for your home as well as everything inside it. You will need to make sure you have the right level of coverage for your needs.

Where To Find An Agent

A good place to start shopping for homeowner’s insurance is with your current insurance agent. There is likely to be a discount if you insure both your home and your car with the same company, so it is well worth considering the company that insures your car. If your car insurance company does not handle homeowner’s insurance policies, you can instead ask for referrals from your REALTOR® or your mortgage broker.

The Coverage You Need

A good homeowner’s insurance policy provides enough coverage to rebuild your home from the ground up if necessary, as well as coverage for all of the property inside your home. You should not confuse the replacement cost of your home with the market value; these are two different things, as market value includes the value of the land. Insurance does not cover your land, only the structures on it and the contents of those structures. You insurance company will use the appraisal of your home to determine all of the structural factors that go into determining replacement cost.

The contents coverage is usually a percentage of the replacement cost of the home. You should be aware that certain high value items such as jewelry may require a special coverage called a “floater” added onto the policy in order to cover them for their full value, as there are usually limits on such items in the standard policy. Be prepared to provide an appraisal on high value items.

A good insurance agent can guide you through the process of selecting the right homeowner’s insurance policy for your needs and ensuring your new home is protected properly. Finding someone you can trust is important-after all, this is the biggest purchase you will ever make!

If you are buying a new home on a tight budget, one of the options that will come to your attention is purchasing a condominium or townhome instead of a standard single family home. Because most of them share walls, condos and townhomes are more affordable. But before you consider moving into a multi-family complex, consider both the down and the up sides to such a purchase.

The Difference Between A Condo And A Townhome

New buyers may be confused as to the difference between a condo and a townhome. Both are attached homes, where at least one wall is shared between two units. One difference between them is that a townhome does not have any units above or below, only on the sides. Townhomes are usually at least two stories, sometimes three stories. Condos on the other hand are often single story-although not always-and may have units both above and below as in an apartment building.

But the truly important distinction between the two is in the ownership rights of the buyer. Condo owners have rights that extend only to the walls of the unit, while townhomes usually have rights to the land as well. This can become a little complicated in the legal aspects, but that is the basic difference.

Condo Associations

Condos usually have an association, run by the owners in the complex, that helps to take care of the shared areas of the complex and also maintain the standards set out in the rules. The condo association usually handles such things as lawn and garden care, painting of the outside of the building, and roof repair.

Some townhomes may have a similar association as well, called a homeowner’s association. It handles things in much the same manner. Associations require monthly fees, and all owners can take part in the decisions made by the board.

Things To Consider

Condos and townhomes have some potential downsides you should consider. There are often rules about pets, so you may not be able to take your dog or cat with you. You will also find that most such homes lack any sort of real yard, although some townhomes have a small yard. Shared green space is often available, but you will not have the same privacy.

There are also some things about this type of home you might appreciate, such as not having to do the maintenance on the exterior of the house or the yard.

Condo and townhome living is very well suited to some people, and less so to others. Consider all of the aspects when you are thinking of buying this type of home.

Setting a budget for your home purchase is an important decision. You need to know how much you can afford each month and translate that into the amount you can afford to take out on your new mortgage. When you start house hunting with that budget in mind, you may find to your dismay that you are not seeing many homes in the price range you have set that match your needs.

There are three choices you have in this situation. The first is to wait it out, keep looking, and hope the house you want comes up on the market in your price range. The second is to compromise and buy a house that is affordable but not really what you want. The final choice is to look at raising your home buying budget.

How Much Will It Really Cost?

The first thing to consider when you are looking at raising your maximum purchase prices is what difference it will make in your actual monthly payment. In many cases, the difference may not be as difficult to handle as you might think. Pull out that mortgage calculator and figure out what it would cost you per month to go $25,000 over budget, $50,000 over budget, or even $100,000 over budget. Sometimes even a small raise in your maximum price can put you into a whole new class of available homes.

Do You Have A House In Mind?

So you drove past a house for sale the other day and fell in love, but it’s out of your price range. Take that number home and punch it into your loan calculator. Can you afford that house, even if it might be a stretch? Are you willing to consider making other budget cutbacks, such as on entertainment, to have the house of your dreams? How important is it to have everything on your wish list?

If having the right house is important enough, and the increased price is not going to strain your finances too much, you can consider going for it. Remember that you can always offer less than asking price, and hope to get that dream home for a price closer to the original budget!

A little flexibility is always a good idea when you start searching for the right house. Sometimes spending a little more will save you later in terms of property value. It can also save you from having to move again when you decide the compromise to save money was not worth it.