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Intro and Overview
Confidence
Placing an offer on a home
feels pretty good. It feels even better
if you are confident that your offer will at be considered. What is most important however, is
confidence.
Not to sound like DR. Phil
or your high school track coach but, you need to be confident that your offer
will be the offer that gets the house.
You need to be confident that the inspections that were done are
accurate and honest. You need to be
confident that your negotiating skills are on par or even better than that of
the person selling the house. Most
importantly you have to be confident that there are other houses out
there. Desperation is your worst enemy,
if you are desperate you will pay more for a home that you may not even need.
The Basics
Part of gaining confidence
is organization. The following is a
brief overview of what you should figure out before you start making offers in
earnest.
The following is a list of
the top ten things you should do to make your search for a home a smart search.
Get informed. Do lots of research.
Start saving your deposit as soon as you can.
Try not to buy around the top of a boom in property
prices. These often reflect idiosyncrasies in the market.
Location and special features are the most
important factors in choosing your home.
Dont get your heart set on any particular
property - it will impair your judgment. If you miss out on one, you will
in time find something as good or even better.
Always check the condition of what you are
buying with a property inspection.
Shop around for a loan. Also, choose your legal
advisor and building consultant carefully and make the most of their advice
and expertise.
Before making the final decision, ask yourself
whether you could easily resell the property in the worst economic times.
Never sign anything in haste and if you dont
understand what youre signing get your legal advisor to explain it to
you.
Location, $$$, and Time (the holy trinity of home
buying)
Now that you have the
fundamentals, the fun part comes in.
That is finding the home that fits your personality and your
budget. Again, you are going to want to
ask yourself several questions when you are out looking for a prospective
property. A simple process if there
ever was one. Just think back to grade
six story writing class. All you need
to do is ask: who, what, when, where, why and how?
Who:
While you may know what you want, what does your
spouse and family want?
Will there be any additions or subtractions from
your family unit in the future.
Are you looking for a type of seller? Someone who might give you a break
because they like your personality?
What:
Price range
Type of home e.g. freestanding house, terrace,
townhouse, unit
New, used or old
Renovated or not renovated
Style preferences
Number and size of bedrooms
Other requirements such as family room, more
than one bathroom, formal and informal dining areas, a home office, space
for your hobbies/interests
Yard or balcony
Access for vehicle, parking
When:
When will you have enough cash on hand to pay
for a down payment?
Have you obtained the mortgage plan that you
want?
Is the market right? In other words, is the appraised value of your home on par
with the market price?
Where:
Overall, where do you want to live? An urban area, suburb or rural area.
Make a short list of neighborhoods that fit that
description.
What amenities do you need? Work, schools,
shops, recreational facilities.
When you look out of your window what do you
want to see. Trees, water, a
beautiful skyline or a sunny garden.
Why:
Are you looking for a new property for the right
reasons? Do you have to move, or do you just want to move.
Has your lifestyle changed dramatically and
should you adjust for that? For instance a recently divorced person may
not need an entire home, even if they can afford one.
How:
Do you actually have enough money to pay for the
home in the long-term?
Will you family expenses grow faster than your
income?
Can you afford the renovations that are needed
as well as the ones that are wanted?
Granted these are all fairly
esoteric questions, but doing a little should searching isn’t a bad idea before
any purchase. Believe me, I have met
many couples who got so swept up in the process of buying home they lost sight
of who they were and what they wanted.
The Contract
Once you have found the
home, met the people you will be dealing with, and established a relationship
with a realtor, the tricky part begins.
This is where things you do start to be ‘carved in stone’, that is to
say that you are legally responsible for your decisions, decisions that could
cost you thousands of dollars.
Make sure you know what to
expect from a contract and what your rights are. The following is a list of all aspects of a contract that you
should be aware of.
Address and legal description of the property
and home
Agreed sale price
Terms of sale, all down payments and mortgage
conditions
Seller’s promise to legally hand over the title
of the land
A target date for the finalization of the sale
Amount of down payment. This may also be known as earnest money
or deposit. It should also be
specified whether this money would be delivered in the form of cash,
check, and promissory note. You
must also specify how that money will be returned if the deal does not go
through, and how that money will be paid if you brake the contract
Method and agreement by which all insurance,
property taxes, fuel, water bills, and any other utilities with be
transferred from the seller to the buyer
Who will pay for independent inspections?
Type of deed to be given
Any state specific clauses. For instance, attorney review of the
contract and disclosure of any hazards such as fault lines, flood plains
and contamination
A time limit that, if passed, nullifies the
offer
CONTINGENCIES*** (very important)
***For an explanation of
contingencies go to the contingencies page.
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