ATG News Release
IMPORTANT TIPS FOR PROSPECTIVE HOMEBUYERS
For prospective homebuyers, ATG offers the following tips to ensure happy — and less stressful — house-hunting.
1. Evaluate your finances and set a time table for purchase. The first step to buying a home — before you even begin looking at houses — is to examine your personal finances and evaluate your present financial obligations. This will enable you to determine the price range of a house that you feel comfortable purchasing. First-time buyers should eliminate as much debt as possible in order to make a favorable impression on a lender. As you consider the cost of buying a home, don't forget about the less obvious costs: real estate taxes, closing costs, homeowners insurance. An attorney can help advise you and ensure these fees are reasonable and necessary.
2. Make a wish list. What specifically are you looking for in a house? Do you prefer new construction or an existing home? How much square footage do you require? Any particular school district or neighborhood where you want to reside? What are the most important features inside the house? How much outdoor maintenance do you want? Answering these threshold questions will help target your search.
3. Pre-apply for a mortgage loan. Not only will obtaining a specific dollar amount from a qualified lender allow you to know exactly what you can afford, it will help speed up the process if you find a house you really want. "Being pre-qualified tells a seller you are serious when you make an offer and he or she may accept your bid over another, even higher bid, if that person is not as credit-worthy," said Birnbaum.
4. Hire a qualified real estate attorney before you make an offer. A good real estate attorney should be involved from the beginning to serve as your advocate, evaluate your finances, ensure clear title to the house, and navigate the paper maze. Far more people are involved in a home purchase transaction than just a buyer and a seller. Participants in the process include a real estate sales person or two, a lender, an appraiser, an inspector and a title insurance company. If it is a new construction, a builder and contractors also enter the picture. "With so many players, so many competing interests, and so much at stake, it's critical to engage counsel before you proceed into what will most assuredly be a highly-complicated transaction," Birnbaum said.
5. Do your homework. Arm yourself with information before you jump into the process. With so many competing interests, the real estate transaction can move incredibly fast. Check to see what homes cost in the neighborhoods you would like to move. Research the property taxes in those areas. Consult your local library or use the Internet to check out listed properties. Realtor.com has many multiple listing service properties on-line and the Owners Network (owners.com) is a unique website that lists for-sale-by-owner properties nationally--this is especially useful if you are relocating to another part of the country. Many organizations also have websites full of invaluable information to help steer buyers through the real estate transaction, including ATG (www.atgf.com).
6. Decide whether you want to work with a real estate agent. If you plan to work with a Realtor®, be clear on your relationship up front. A listing Realtor represents the seller's property. A cooperating broker is engaged by a potential homebuyer to help shop around for new house. That broker may or may not be the buyer's fiduciary. If you decide to use a Realtor, seek recommendations from friends and family and interview a few before you select one. Look for an agent whose philosophy and style is one you're comfortable with. "The broker is someone with whom you will invest a great deal of trust," said Birnbaum. "It is important that you hire someone who is dedicated to meeting your price and timing objectives." This is one of the reasons it is important to engage the services of an attorney who is the only true advocate of the buyer in the entire process, according to Birnbaum.
7. Review the seller disclosure document carefully. Every seller must provide a disclosure document that reveals any material defects such as water damage or electrical problems. It is important to sit down with your attorney and review this document completely. Although it does not take place of an inspection, it provides important information.
8. Hire an inspector. After you have made an offer, hire a qualified inspector to go through the house to uncover any potential defects. If any problems arise, your attorney can help renegotiate your contract or, if the damages are too extensive, the inspection may break the deal completely.
9. Have a contingency plan if your expectations are not fulfilled. What if you have to close on your buy before you close on your sale? What if you are purchasing a newly constructed home and a labor strike or materials shortage delays your closing? What if your home sells before you have the time to locate a new home? These are all questions you need to ask yourself at the outset.