Buying a Home

Buying a home is a huge decision and one of the biggest financial investment anyone could make. Home ownership is a good investment because real estate is secure and stable while property is scarce. At the same time, being a homeowner has a lot more advantages than renting. For one thing, as you build equity in your home by paying down your mortgage you gain financial leverage. If in the future you need cash for a medical emergency, home improvements or your children's college fund you know have a source for this needed money. The process of a home equity line of credit for most people is an easy one.

In some ways home ownership is a lot like renting because you make your monthly payments, but you are actually buying this property that you can one day own. You will never own the property that you rent. Each month that you make your mortgage payment, it brings you closer to owning your own home. We all need a place to live, so why not start by being a home owner. You will have your own place to call home, you can decorate any way you want to, you can invite family and friends over for a cook-out or party and you have a yard where you can go to relax or where your children can play safely. Home ownership is a wonderful investment in your future.

Getting started on your dreams of home ownership is easy and an experienced buyer's agent can really make the process less overwhelming for you.

There is a lot of talk today about a Buyer's Market but what does this really mean and how does a buyer take advantage of it?

A buyer's market is indicated with a lot of homes (inventory) being on the market. This means that homes are sitting on the market longer than in the past, which can give the buyer a definite advantage. Like many things, the real estate market is cyclical. It transitions between a hot market where inventory is low which drives up the price for the buyer and a slow market where properties tend to sit on the market longer. A hot market obviously favors the seller while a slower market tends to favor the buyer.

Even though many regions of the country are now in a buyer's market not every buyer takes advantage of it like they should. They sometimes wait to see if prices will drop further since this doesn't always happen they may miss out on what might have been a great deal.

Here our something's to consider in a buyer's market:

1. Better Prices: when there are more homes for sale on the market the competition to sell a home is greater. Some sellers even drop their price below the market value to attract a buyer to speed up the sale of their home in order to meet a moving deadline. Bidding wars are also less likely when there are a lot of homes in inventory.

2. More Choices: with a greater inventory of homes on the market there is a greater variety of properties to choose from for the buyer. You don't simply have to take what you can get. This increased inventory also gives you a stronger negotiating position. If one deal doesn't work out there are more houses for you to use as a back up.

3. Extra Incentives: with more competition for the seller, new construction and private sellers alike may offer extra incentives to entice the buyer. It can be everything from seller paid closing costs, to home warranties, to an allowance for fix up items in the homes. A Buyer's Agent can really help you determine which incentives add the most value to your purchase now and when it comes time for you to sell.

Traditionally real estate agents have always represented the seller in real estate transactions. By law the listing agent owes fiduciary duties to his client, the seller, and has to get the best price and terms for his client. This often comes at a price for the buyer, namely that the listing agent may reveal anything about the buyer to the seller, including the maximum price a buyer is willing to pay. Revealing such information to the seller reduces the buyer's negotiating power. The buyer is treated as a customer, not a client.

So what is a buyer to do? A buyer should always seek representation by his own buyer's agent. By entering into an agreement with a buyer's agent will keep the buyer's information and financial situation confidential, and will share all information he or she has about the seller with the buyer. This is the exact opposite of what the listing agent will do. By protecting the buyer's bargaining power the buyer agent is able to truly negotiate in the buyer's best interest.

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While a listing agent has to point out any material facts about the property, the buyer agent will go one step further and point out things that, while not material, might influence the buyer's decision to purchase or not to purchase. These may be: traffic patterns, noise and parking shortage in the area, lack of sunlight or excessive fog, or anything else that the buyer might consider an obstacle to the purchase of the particular property

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An Exclusive Buyer's Agent works for a brokerage which does not list properties and never represents sellers. Using an Exclusive Buyer's Agent has the added advantage that the agent will never steer the buyer towards in-house listings, thus eliminating potential conflicts of interest. Buyer's agents often require the buyer to sign an exclusive right to represent agreement. It establishes the duties of the agent as well as the compensation structure.

So will it cost more if you use an Exclusive Buyer's Agent? No. In 95% of all cases the buyer agent still gets compensated by the seller through a commission sharing agreement established by the Multiple Listing Service. The only time where the buyer might owe a commission to the buyer agent is when dealing with a For-Sale-by-Owner property, where the seller is unwilling to pay a commission. However, lately many sellers who sell their property without a listing agent have recognized the importance of offering a commission to a buyer's agent. The instances in which the buyer needs to pay a commission to a buyer agent therefore have become rarer.

Finding the perfect neighborhood is what every buyer hopes to accomplish. A buyer's agent who really knows the area can make the task of finding your perfect neighborhood can really be helpful and make the search less stressful. Their insights can really help you to determine if the neighborhood is right, as well as point you in teh right direction to gain more information about an area of interst. The perfect neighborhood is different for everyone because everyone has a different preference as to what they want in a neighborhood. However, there are some major features that most people will consider desirable when choosing a neighborhood:

* Safety- low crime rate
* Schools- a good quality school, it can also be very effective because it can boost real estate value
* Short commute time- distance and time it takes to travel from home to work
* Shopping, restaurants and movie theaters- they can be very accommodating especially if it's in walking distance. You can save a lot of money walking with these high gas prices
* Recreation facilities- the facilities can be very important if you are active in sporting events or just like to exercise
* Low traffic- having children or planning on having children, living in a low traffic area should be very important. You don't want your children playing near busy streets
* Parking- if you don't have a garage and you have multiple vehicles including a boat or an RV, you may need to find out about on street parking. It may be against the neighborhood policy to park on the streets or to have more than two vehicles
* Medical Services- if you have a need for medical care, make sure your neighborhood is accessible to the facilities that you need
* Neighbors- some neighborhoods are made up of older people who are not use to screaming children running around and some are made up of young families who don't particularly want to be around older folks. Make sure you choose the neighborhood that fits your needs.

A CMA or Comparative Market Analysis is an approximation of what the house and property is worth. With a CMA comparison, homes are being compared with similar homes in the neighborhoods based on their sizes, features, and locations to determine the value of the property. A Buyer's Agent will usually pull listings that have sold in the last 6 months. The closer to the CMA property the better, depending on the market, ideal homes would be in the same neighborhood, the same subsection and the same street. The less adjustments that are made the better. So if your agent could find a house with the same square footage, same number of bedrooms and bathrooms, same type of lot with the same exterior finish and garage it would be ideal. Since this isn't always possible, adjustments to the sold properties are made. For example if the house you're trying to get has a two car garage and the house that's sold only has a one car garage, an adjustment to the price of the one car would be made to make it comparable to the two car garage.

Once this is done, you should have a feel of how the market values the property. Having a comparative market analysis is important to the buyer so that they can have a good estimate as to how much the property they want to purchase is worth. This will help you and your Buyer's Agent offer and negotiate for the best price.

For many people who are just starting their research into Real Estate options that might work for them, understanding the lingo can be like trying to understand a foreign language. Luckily for you an Exclusive Buyer's Agent can really be the guide and teacher you need to avoid major mistakes. To give you a start on some basics here is a simple guide on some commonly used abbreviations and acronyms.

AC- Air Conditioning

AEK- All Electric Kitchen

BA- Bathroom

BOM- Back on Market

BR- Bedroom

BSMT- Basement

DR- Dining Room

DW- Dishwasher

FP- Fireplace

FR- Family Room

FROG- Finished Room Over the Garage

HOA- Home Owners Association

HW- Hardwood Floors

M/W- Microwave

PCH- Price Change

LR- Living Room

TLC- Tender Loving Care

W/D- Washer and Dryer

There are some common house repair problems that everyone should be aware of when buying a house. That's why having an inspection done is so important. An inspection should be done whether the house is new or pre-owned. Your Buyer's Agent will be able to recommend some good inspectors. Which ever inspector you choose make sure that the inspector is bonded and insured.

Some common house repairs includes:

* Roofing-one of the major problems in house repairs. Roofing always needs to be checked for leaks and sagging.

* Basements-if you're in a flood zone area, you may want to think twice about buying a house with a basement. If it rains and starts to flood, your basement will see the result of this and it can be very expensive.

* Insulation/Up to date windows-if your house is poorly insulated, you can expect a high electricity bill all year long. Make sure you have good insulation or be prepared to get good insulation and double pained properly installed windows.

* Heating-if your heating/air conditioning ducts aren't clean and your system is not working properly, this can cost you a bundle.

* Water-make sure you check all pipes for leaks and check for slow drainage, these can cause problems down the road.

* Electrical systems- check to see that all electrical wiring is updated. Make sure there are no faulty wiring. You may want to hire an electrician for this.

General maintenance- make sure that the house itself hasn't been poorly maintained; this can cost you a lot of money if you have too many repairs.

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Many people make these mistakes between the time that they apply for a mortgage and the time they close on a piece of property because they just don't know that they should avoid doing them. Unfortunately for some these mistakes cost them the ability to purchase a home.

1. Don't Close Any Accounts: by doing this it makes it look like you have less available credit. Pay accounts down to 30% or them off if you insist but don't close them!

2. Don't Open new Accounts or Make New Bills: new accounts create a FICO-reducing triple whammy of a new account/inquiry. The short credit history combined with the high balance to credit limit ratio are both bad. Opening major lines of credit may make it appear to a lending institution that you are having financial trouble.

3. Don't Buy A Car: like other major purchases on credit an auto account shows you at your credit limit, so it looks like you are maxed out. This kind of large purchase also effects you debt to income ratio. You've increased your debt without increasing your income.

4. Don't Pay Your Bills Late: Paying your bills late can drastically affect your credit. There is nothing worse than barely getting approved finding the right house making an offer and then no longer qualify because they've been late on their bills while house hunting.

Many people wonder why they need an inspection when the seller in most cases is required to fill out a seller's disclosure (required by most states).
The Latin term "Caveat emptor" means let the buyer beware. The biggest reason for a home inspection is that you shouldn't just go by what the seller tells you. They're trying to sell their home! They may omit details or outright lie on their disclosure or to their agent to get their home sold. You are the only person who can ultimately look out for yourself. By hiring an inspector you can protect yourself and save yourself a big hassle down the road. The second reason is that honest mistakes happen. The seller might not be aware of certain problems with the property so can't properly disclose the information.

Usually a buyer who is considering a home inspection will make the offer they present to the seller contingent upon the home inspection. In this way they are eliminating their risk. In most cases repairs can then be negotiated with the seller. If the inspector was to find major deficiencies with the property the buyer can back out of the deal without losing their earnest money. Knowing what you are buying is key to making a smart buying decision and really understanding what kind of deal you are getting on a property.

Most Home Inspector will Inspect:

Roof: roof covering, chimney, gutters, vents, flashing

Foundation: crawlspace if any, basement or slab

Exterior: condition of the siding, windows, exterior doors, decks, steps, railings

Interior: windows, inside doors, ceiling, walls, garage,

Plumbing:

Electrical stystems:

Heating and Cooling systems including Vents

Cosmetic features with in the house are not usually covered.

The money that you will spend on your home inspection is more than worth the cost to protect such a major investment. Your buyer's agent can recommend a good inspector if you are not familiar with any.

Contingencies are the conditions that must be met before the transaction can be completed. The two most common are inspection and financing contingencies.

Inspection contingency: An Inspection contingency usually states that the buyer has the right to a home inspection and is satisfied with the results of the inspection. All contracts are different, but in most cases the buyer can walk away from the deal or negotiate the repairs. This type of contingency really protects the buyer from unexpected surprises. It also ensures that the buyer in fact knows what they are buying, because an inspector can find things wrong with a property that the seller isn't even aware of.

Financing Contingencies: is a standard component of most sales contracts. The only time that this isn't present usually, is when the buyer is paying cash and thus avoiding financing all together. A financing contingency is specifying that the offer is dependent upon the buyer securing the appropriate financing needed to purchase the property. The offer will usually specify a deadline by which financing must be secured. If the financing does not come through or is late, the offer will be withdrawn.

A buyer's agent can really help you navigate the contract negotiations and execution.

Many people don't really understand what the Multiple Listing Service or MLS is. Basically, the listing service allows real estate agents to share information about their listings. Unlike a company or an individual agent's personal listings on a company or individual agent's website that features only their own the MLS is a place where every agent belonging to that specific Realtor's association can put their listings. See an example of MLS search capabilities at: www.charlestonhome.com.

The reason for doing so is easy, convenience. By utilizing the MLS an agent can pull up every property in a specific area with specific criteria that meet that a client may be looking for. They can quickly and easily retrieve information about the property and if it has been listed before the selling history of the property. For most agents this is an invaluable tool. It helps listing agents market the property they are trying to sell and helps buyers locate homes that they would potentially be interested in easier.

Another fact that many people don't know is that there is no singe MLS in the country, but instead many MLS databases. The MLS is usually owned and operated by the local board/association of Realtors but is sometimes owned by the county or another trade association. For this reason most MLS are restricted to licensed agents who are members of the local board or association of Realtors. The restriction on agents and how much information they can include to the public also varies from location to location.">