Posts Tagged ‘Home Buying Tips’
5 Tips for Smarter Home Buying
Record low interest rates, combined with deeply discounted home prices, have bottom fishers swimming frantically, in search of the perfect deal on the perfect home. But, before you strike, beware. Read our 5 Tips to Avoid Getting Hooked in a bad way.
- 1. Think Long Term: This is a market for smart bottom fishers, not flippers. In this market, our advice is that you should plan to buy a home to live in, then hold it for 3-5 years, at the minimum. Our reasoning, first, prices have not fully stabilized at these levels. Secondly, there is no indication that prices will rise any time soon. Last of all, we are still facing a rise in foreclosures in 2010, which will keep downward pressure on the market.
- It’s All About the Local Market: We have all heard the golden rule of successful real estate investing…Location, Location, Location. In other words, if you have a choice between a bigger home in an ‘iffy’ area, or a smaller home in a better one, always pick the the Good Location. Remember, when comparing locations, real estate markets are entirely a Local matter. There are big differences within neighborhoods, zipcodes, school systems and suburban towns. Focus on the hottest area’s and the ones that are conveniently located near major employment centers. In rough sea’s, these area’s will always rebound the fastest and appreciate the most.
- Be Wary of Foreclosures: While some foreclosures may be a great buy, many of these properties are “cheap” for good reasons. Many of the homes weren’t great to begin with and most have been terribly neglected. Carefully look for mold, water penetration, structural problems, missing appliances, soiled carpets and flooring underlayments, broken windows and glass, strange odors and any evidence of illegal drug trade. Also, never get emotionally attached to a foreclosure home. Banks are notoriously hard to deal with and they can take forever to respond to offers. Some buyer’s report a wait of several months before the bank approved an offer, or not.
- Get Pre-Qualified for a Loan: Submit your letter of loan approval with any offer you make on a home. Banks always require a letter of pre-qualification before considering a bid, as will any serious seller. With proof of funds in hand, you will be taken much more
seriously by all seller’s, and you will in the end, get a much better deal on the house. Getting Pre-Approved for financing is no lose proposition. - Don’t Take Chances. Buyer’s are in the drivers seat and a lot of great values are available, but please don’t overspend. The job market and general ecomony are uncertain. Make sure you can afford the property, even if you find yourself in a bad or unexpected situation. Even the perfect property can turn into a nightmare, if you can’t reasonably afford it.
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Buying a Foreclosure is Pure Torture
If you think that banks or lenders are like desperate seller’s, who are willing to do anything in order to find a buyer for their home, think again.
Picture Your Serious Offer Here. Banks are completely under staffed in their REO and loss mitigation departments. Buyer’s and their agent’s report a wait of up to four weeks or more, before a file is assigned to a negotiator, who may or may not, open the file and start to process the offer.
My Way or the Highway. In addition to understaffing problems, lenders adhere to a strict checklist of requirements. If one item is overlooked or missing from their checklist, the file is routinely placed back on the bottom of the pile, where it can take weeks to resurface again.
Don’t Call Us, We’ll Call You. Lenders are famous for being non-responsive to offers, even if they are at full asking price. As a practice, banks hold offers and wait for better ones to come in, before responding. If you find yourself in a “multiple offer” game, be extremely patient. With a little luck, you may hold the winning bid, as other buyer’s drop out due to anger and a lack of patience.
Real Sellers Take Solice. While these cash ready buyers are pulling out their hair in frustration, both buyer and agent are powerless in communicating with or motivating the lending giants. If you are selling a property, you can easily give yourself a huge advantage by responding to offers in a timely manner, extending courtesy to prospective buyers, and by providing access to and information about your home when ask.
Get Ready, Get Set, Stop. Buyers seeking a foreclosure need to accept that both they and their agent’s are in powerless positions. Anyone who attempts to play the distressed property game, needs to accept that their efforts to buy a home will be futile, unless they have all the time in the world and the patience of Job.
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5 Area’s in a Home That Cause the Most Problems
Buying a home can be exciting and a little scary at the same time. Fortunately, you can save yourself a lot of money and trouble by focusing on the 5 Area’s of a home that cause the most reported problems.
5 Trouble Spots You Should Pay Close Attention To
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Attic: It is amazing what you can learn about the structure of a home by looking in the attic. You can easily see the framing, the condition of the roof and decking, and the insulation or lack of it. The attic is also a great place to find evidence of leaks, past or present, and any mold issues that may have resulted. Tip: If you see new insulation in some area’s, it usually means there has been a leak there at one time.
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Electrical: The electical system is a commonly reported problem in older homes and new construction. The best and safest advise here is to rely on the expertise of a good home inspector.
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Foundation: Foundation failures are expensive problems to fix. In addition, they can cause other problems that may be hard to detect. Although cracks do not always indicate a big problem, you should key in on any cracks in the foundation or siding. Watch for root invasion from tree’s that are planted to closely to the house. Also, check to be sure that all the doors and windows open and close properly. If not, it may indicate that the foundation is or has shifted. A professional home inspector will be very helpful in determining issues with the foundation.
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Landscape: Landscape can be a huge selling feature for any home and it can be an indicator of potential problems. If landscaping has been planted closer than 12 inches from the foundation, it is too close to the house. When plantings are too close, they can cause moisture problems and cracks in the foundation. Vines which creep up the sides of the house can push siding and brick away from the stucture, weaken mortar and cause staining. Large tree roots can upheave sidewalks, decking, porches and damage the foundation. Landscape beds should be elevated and sloped to drain all water away from the house and foundation.
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Plumbing: Water leaks are often hard to see and cause of a lot of expensive problems later on. In addition to undermining wood surfaces and flooring, leaks also result in mold issues that are difficult to treat and expensive to cure. Tip: Always look closely underneath sinks and plumbing fixtures to find evidence of mold or past water damage. Tip: Don’t forget to move the refrigerator out and look behind it.
The best advise when buying a home is don’t scrimp on your inspector. Hire a licensed, professional home inspector and follow them around throughout the entire inspection. The more you know about the condition of the property, the better off you will be. Remember that common sense, due diligence and a good inspector are invaluable and can help you avoid most of the costly mistakes.
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