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Home sellers don't just pick up the phone and call you
with a maintenance-free home with an excellent mortgage.
Reading available real estate information
materials, talking to friends and experts, and investing
your time wisely by viewing a variety of homes on the market and
researching the schools & neighborhoods is the best way to
realize the American dream.
Tip #2: Make
A Plan And Get Pre-Qualified
Carefully examine each important decision and think it through.
Develop a well organized plan for making your home purchase. Focus on
the most important factors. Create file folders on house hunting, home
financing, service providers, etc. Get yourself pre qualified for
a loan so you can determine the amount of home you can afford. Getting
pre qualified also increases your chances of closing a deal,
The seller is more likely to accept an already funded offer than one
from a home buyer who still needs to get a loan. Lenders usually
employ the 28% formula (your monthly mortgage must not exceed 28%
of your monthly income) in approving your loan. Plan your
actions and get pre qualified, this reduces the chance of panic
situation and allows you seize opportunity when it is presented. A
thorough plan will save both time and money!
Tip #3: Value,
Value, Value
The days of
10-30% annual appreciation still exist. Home buyers in the 1990's
benefited tremendously from what seemed like ever appreciating home
prices, now we are seeing growth along the same lines. Nowadays, you're
looking at stable growth while guarding against the possibilities of
falling prices, low interest rates and corporate layoffs that can
dramatically affect your home values. The classic rule of buying the
worst house in the best neighborhood still applies. If you buy with an
eye towards improvement, you can customize the home to fit your needs.
The saying, "make money buying a home, not selling one," should keep
you focused on the long-term importance of the purchasing price.
Tip #4: Create
A Top 10 List of Amenities
When shopping
for a home, list the features (fireplace, fenced-in yard, new
appliances, etc.) that are most important to you in deciding on
which home to buy. Establishing "your criteria" early on will save
time shopping for inappropriate homes and may keep you from buying a
home on a whim -- for example, because of a circular stairwell -- that
doesn't meet your fundamental requirements. As detailed in Tip #3, your
top reason for buying a home should be the value you are getting. Some
of your top 10 amenities should logically be sacrificed if an
incredible value is available.
Tip #5:
Fixed vs. Adjustable Rate Mortgages
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. If you're shopping
for your dream home or you plan to raise a family, 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 COFI's
are less volatile over time than T-Bills. Find out the what the
teaser rate is and what the real rate would be.
Whichever loan
you choose, make sure that you scrutinize all the closing costs. If
you are required to have a mortgage escrow account and private mortgage
insurance, make sure you understand the terms and cancellation
procedures. Also, make sure there are no prepayment penalties so that
you can utilize an accelerated mortgage plan. A good mortgage reduction
plan can save you tens of thousands in interest costs, and shorten your
loan term, with only small extra principal payments. If you experience
negative changes in your job, health, or marital status, you can revert
to the standard payments in your mortgage contract.
View Kansas City Homes for Sale with Photos
Tip #6: Sign
A Contract That Protects You
Make sure that
the contract you put on a house allows you to arrange financing,
inspect the home and negotiate any problems that you uncover.
Ensuring that the contract you sign will minimize potential legal
battles will let you swim in your new pool with your family and
neighbors instead of with the sharks.
Tip #7: Put
Yourself In The Seller's Shoes
You are about to
make one of the most important decisions that will affect both your
life and the life of the seller. If you take time to understand the
reasons the seller bought the home, their reasons for selling, and the
home improvements they have or have not made, you'll be in a better
position to evaluate the home and negotiate a better deal. In the
end, the home buying process excludes the professionals and comes down
to the individuals buying and selling the home. A closer look at the
seller may help you in deciding whether and for how much to buy a
particular home.
Tip #8: Develop
A Mortgage Shopping Chart
One of the biggest
decisions to make before putting a contract on a home is how to finance
the purchase. There are 10,000 lenders competing for your mortgage
business. The days of simply walking into the community bank and
negotiating with the loan department manager are over. Today, you can
apply for a loan over the Internet or even use a mortgage broker to
shop for your loan with hundreds of lenders. When choosing a
lender, you want to avoid apples to oranges contrasts by comparing
fixed rates to fixed rates, not fixed to ARM's. Create a chart that
lists different types of loans, fees, and at least five mortgage
providers (including a mortgage broker).
Tip #9: Get
A Quality Home Inspection
Although it is hard
to believe, more people pay for inspections before buying used cars
than when making the biggest investment of their lives -- their homes. Paying
for a qualified home inspection before you buy a home isn't just
spending "a little extra" for peace of mind; it's absolutely essential
for anyone who doesn't want to spend thousands of dollars for repairs.
Tip#10:
Peace of Mind: Home Protection Plans
To protect both
yourself as a buyer, as well as the seller, it is a good idea to
purchase a home protection plan. What exactly is it?
A home warranty, or home protection plan, is 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 do not
overlap or replace homeowner's insurance policy, this type of warranty
can save the new homeowner lots of headaches, as well as put seller's
fears to rest. The warranty covers mechanical breakdowns, while
insurance typically repairs the related damage, for example: if a hot
water heater burst and destroyed a wall in your home, the warranty
would repair the water heater and your insurance would pay to fix the
wall.
Information
provided by The American Homeowners Association, Copyright© 2002
Kansas City Real Estate services for buying and selling offered by the
Realtor below:
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