There are few purchases in life that carry the financial and psychological weight of buying a home. Whether you are buying your first home, moving up to your dream home, or downsizing your home and your life after the kids have gone, it is important to understand the ground rules for success in the world of buying a home.
While there are plenty of web sites designed to help first time homeowners learn all they can, most financial experts say that there is no substitute for the good old one-on-one learning. Fortunately, most mortgage lenders, home inspectors and real estate agents will be able to provide this kind of one-on-one learning.
There are five basic ground rules when it comes to buying a home and shopping smart, and they are:
1 – Get your financing before you get your home
There are few things in life as disappointing as losing out on the home of your dreams due to not being able to secure funding. While the desire to get out there are search for that great home is understandable, it is vital to line up the financing you will need before you start shopping for a home.
2 – Look at the community, not just the home
It is a good idea to look at the entire community, instead of focusing on a single home. This can be a particularly important thing to consider for those moving to a new urban or rural area, as these buyers will be unfamiliar with the local climate and lifestyle. It is crucial to determine the areas of town that are most desirable, and to consider things like distance from work and local shopping opportunities.
There are so many internet applications and sites that can help in this regard, however the good old fashioned drive around the area, of calling into local shops and schools is still the best method. The agent showing you the property should also have a thorough understanding of the area and its community.
3 – Be fair with your first offer
Trying to lowball a seller on the first offer may sound like sound advice from ‘well meaning’ friends, but be careful, it can backfire. The last thing you want at the start of a negotiation is getting the seller totally offside. It is important to carefully evaluate the local market, and to compare the asking price of the home with what similar houses in the neighborhood have sold for. Once again the agent selling the home would have access to the comparative sales, as they would have studied them prior to marketing that home.
The best negotiations are win/win. You as the buyer feel you’ve bought the home you want at a fair price and the vendor feels that have sold the home for a fair market price. Call me a tragic, but I still believe that the vast majority of people still like the idea of fairness.
4 – Always get a home inspection
Always investigate the home for any possible defects before exchanging the contract unconditionally. Compared to the cost of the average home, the price of a quality home inspection is virtually negligible. Hence, get a good home inspection done before you buy, always bear in mind of course that the home was most probably priced that way because of its condition.
5 – Do not alienate the sellers of the home
Many real estate deals have fallen apart due to the personal animosity of the buyer and the seller. It is important to avoid alienating the seller of the home during the process, and to avoid nitpicking every little detail during the sale.
Keeping the good will of the seller will help the transaction go smoothly, and it will provide the best environment for seller and buyer alike.