Real Estate Buying Tips

Read all available real estate information materials, talk to friends and experts, and use your time wisely by checking a variety of homes on the market. Do not forget to research the schools & neighborhoods!

Develop a well organized plan for purchasing a home. Key in on the most important factors. Stay organized and create file folders on recent home searches, home financing, service providers, etc. Get pre-qualified for a home loan to determine the type of house you can afford. By doing this, it increases your chances of closing a deal and the seller is more likely to accept a qualified buyer. A thorough plan will save both time and money!

Home buyers in the 1990's benefited tremendously from appreciating home prices. In todays Real Estate market you may be looking at stable growth while also protecting yourself from the possibilities of falling home prices and low interest rates that can dramatically affect the value of your home. The saying, "make money buying a home, not selling one," should remind you of the long-term importance of the purchasing price.

Make a list of the most important features when deciding on which home to buy. Be sure to include items like a fenced-in yard, fireplace, new appliances, school district and other important factors. Your top reason for buying a home should be the value you are getting.

Determine which type of loan fits your particular needs. Are you a first home buyer or are you moving to a larger home? If you're planning to own for a short time, an ARM may be the best type of loan. When shopping for a home that you plan to raise a family in, a fixed rate mortgage may be more suitable for you. If you choose an ARM, the index should be based on the Cost of Funds Index if rates are increasing, and Treasury Bills if they are decreasing. The COFIs are less volatile over time than T-Bills. Find out what the teaser rate is and what the real rate would be. Make sure that you size-up all the closing costs. If you're required to have a mortgage escrow account and private mortgage insurance, be sure you understand the terms and cancellation policies. Also, make sure there are no pre-payment penalties so that you can utilize an accelerated mortgage plan. A good mortgage reduction plan can save you a considerable amount of money and shorten your loan term, with only small extra principal payments remaining.

The contract you sign when buying a home should allow you to arrange financing, inspect the home and negotiate any problems that you uncover. This ensures that the contract you sign will minimize potential legal battles.

It's important to take the time to understand the reasons the seller bought the home, why they're selling home, and if they've made any improvements. This can put you in a better position to evaluate the home and negotiate a better deal.

Paying for a qualified home inspection before you buy a home is necessary in order to move forward in the buying process.

Purchase a home warranty, or home protection plan. The plan will be a service contract, normally for one year, which protects homeowners against the cost of unexpected repairs or replacement on their major systems and appliances that break down due to normal wear and tear. A negotiable contract between the buyers and sellers which does not overlap or replace the homeowner's insurance policy.