Advice to Buyers
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Helpful Tips for Buyers
What should buyers know?
 
CUT YOUR INSURANCE COSTS

Insure the home, not the land: The purchase price of a home includes both. For example, if a $120,000 house sits on a parcel worth $20,000, you should pay insurance on the value of the house, or $100,000.

Shop for the best deal: Check with at least three insurers. Ask friends or colleagues for recommendations.

Increase your deductible: Instead of paying the insurance company, start putting aside funds to pay for minor damage or the deductible in cases of major claims.

FIVE STEPS FOR FINDING & BUYING A HOME

1) Visit homes as soon as they come on the market.

2) Take a second look at the homes you rejected.

3) Stay in constant touch with your agent.

4) Be ready to make an offer quickly.

5) Don't be intimidated by multiple offers.

GET EVERYTING IN WRITING

Agent agreement: In some states, you have to sign an agreement that you understand your agent's role in your transaction. If you work with a buyer's broker, always sign an agreement to specify time limit and service fees.

Purchase contract: Verbal contracts guarantee nothing. Read the purchase contract thoroughly and revise any terms unfavorable to you.

Loan commitment: After you submit the loan application, you receive your lender's written pledge to loan you a certain amount of money on a specific property for a certain time.

Interest rate lock-in: This is your lender's written commitment to guarantee you a certain interest rate. Be sure that it's valid for 30-45 days to cover your closing.

Closing costs estimate: Lenders are required by law to give you a good-faith estimate of settlement costs within three days after you apply for a loan.

KNOW HOW TO TAKE TITLE

Before you assume title for a property, you may want to discuss tax and estate-planning consequences with your attorney or financial adviser. Three primary ways of taking title are:

Joint tenancy: Joint tenants are two or more people who hold title equally to a property. Both must agree to sell the property. If one dies, full ownership goes to the survivor, or survivors, without going through probate proceedings. This arrangement is most common for married couples or unrelated co-owners.

Tenancy in common: Tenants in common are two or more people who hold title equally or unequally to a property. Tenants in common have the right to dispose of their interest in the property any way they see fit; they can will it to a relative or sell when they choose.

Sole ownership: A sole owner holds title to a property with no spouse, partners or co-owners.

LOOK FOR A LOCAL AGENT

Hire a Local Agent: Listing your home with an agent who specializes in your area is the best ticket to getting maximum exposure of your house to buyers. Agents who have worked a locale for several years are going to be well versed in the area's price trends, recent comparable sales history, the neighborhood's strengths and weaknesses, and how to work these factors to your advantage. Also, local agents tend to support one another by bringing buyers to the listed properties of colleagues. As area specialists, they have a strong interest in making as many local sales as possible. Because out-of-town listing agents are not part of the local sales network, your property could be at a marketing disadvantage. To find a good local agent, interview several candidates.

Ask how many homes the agent has sold in the neighborhood in during the past year.

Get a list from the agent; it is a good measure of the agent's familiarity with the area and should include list price, sales price, square footage, number of bedrooms and bathrooms, and time on the market.

Gauge the depth of the agent's knowledge of neighborhood price and
marketing trends.

Knowing where local prices have been can help you set an appropriate listing price. A non-local agent may suggest a higher list price. But if it doesn't match prices of comparable homes in the area, and isn't backed by marketing that fits local custom and current prices, you could lose potential buyers.

SIGNS THAT A NEIGHBORHOOD IS IMPROVING

Dumpsters: Construction dumpsters outside a home (or homes) indicate serious remodeling inside, a positive sign in a shabby or marginal neighborhood. Look for this trend on the fringes of more expensive, established neighborhoods.

Other signs of home improvement: When homeowners spend money to upgrade their homes, it is a sign that they like the neighborhood enough to invest in it.

Many "Sold" or "Sales Pending" signs: that means that plenty of buyers want to invest in the area.

Better eating and shopping options: A revitalized business district means that business owners see opportunities for new customers and sales in an area.

New public facilities: A new mass-transit stop, for example, can be a magnet for other local improvements and a stimulus for renewed buyer or developer interest in an area.

TEST-DRIVE YOUR COMMUTE

Avoid buying into a bad commute when you move to a new neighborhood. Take the time to drive to and from the area and your job during rush hour. If the commute is long or complicated, weigh that against other factors you like about a home or area. Are you tired from the drive when you get to work or when you get home? Think about looking for a house or neighborhood closer to the places you go, or near a mass-transit stop so you can avoid driving altogether.

WORK EFFECTIVELY WITH YOUR AGENT

Choose an agent with whom you feel comfortable: Professional expertise is important, but so is personality. Trust your instincts. If you interview agents with a partner, discuss your reactions before you decide.

Clarify your expectations: Discuss what you expect your agent to do and any special requests (for example, that the agent attend the home inspection in your place).

Don't be shy: As you visit homes, talk frankly about what you like and don't like. Your agent wants to show you homes that meet your criteria.

Be specific: Don't get distracted by bad décor or clutter. Concentrate your comments on room size, floor plan and the overall condition of the house--information your agent can really use.

Take advantage of agent services: In a competitive market, ask your agent to let you know about properties that are about to be listed. Be prepared to drive by or visit on short notice.

Stay connected: Know how to contact each other. Exchange telephone and pager numbers, and e-mail addresses.

 
Follow these tips and you’re likely to have a successful and rewarding search for a home that’s right for you.