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By:
Dian Hymer
No
one likes to make mistakes, especially homebuyers. If you
make a mistake buying a computer or TV, the consequences
aren’t serious. But a home buying mistake can cost you
plenty. Fortunately, you can learn from others’
mistakes. Here are some tips for avoiding pitfalls so that
your home buying experience will be a positive one.
Find
out what you can afford before you start looking at homes
to buy. This will save you time and aggravation. A simple
call to a mortgage broker or lender will get you started.
As
soon as you’re serious about buying, get preapproved for
the loan you’ll need to complete the purchase. This is a
must if you’re in competition with other buyers. Even if
you’re not, you’ll be in a better bargaining position
with the seller if you are completely approved for a loan.
Have
the property thoroughly inspected before you buy it. Home
buying is often done in haste. Don’t overlook
recommended inspections just for the sake of speeding the
process along.
To
protect yourself, include contingencies in your purchase
agreement. A contingency is a condition that must be met
for the sale to go through. For instance, it’s risky to
buy without a contingency for the sale of your current
home if in fact you need to sell it in order to buy the
new home. If contingent sale offers aren’t acceptable in
your marketplace, you may need to sell before you buy.
FIRST-TIME
TIP: Most buyers sign purchase contracts without reading
and understanding them. This can be risky because a real
estate purchase contract is a legally binding contract.
Ask your agent or attorney for copies of the contract
documents in advance so that you can become familiar with
them before you sign them.
Read
every document you sign during the course of your purchase
transaction. Read and understand all inspection reports
and financial documents. It’s O.K. to ask a lot of
questions. The only stupid real estate questions are the
ones that were never asked.
Be
sure to use local real estate professionals (agent,
mortgage broker, inspector), even if you have a good
friend or relative who’s in the business elsewhere who
will cut you a deal. Out-of-area professionals don’t
know the local market place so you can’t expect them to
provide you with the expert representation and service you
need.
Ask
your mortgage broker or loan agent to give you a written
loan commitment when you are approved for your mortgage.
If you lock in an interest rate, be sure to get it in
writing.
To
be legally binding, a real estate purchase agreement and
all modifications must be in writing and signed by both
the buyer and seller. If you negotiate verbally with the
seller, follow up and get it in writing.
Make
sure you have enough money to close the transaction before
you sign the purchase contract. Your down payment money
should be liquid, not in the stock market. Ask your real
estate agent or mortgage broker to prepare a closing cost
estimate for you so that you’re not surprised later by
unanticipated expenses.
If
you’re leaving town during the negotiations, make sure
your agent knows how to reach you. Make arrangements for
documents to be signed in your absence either by giving
someone you trust a power of attorney or by making
yourself accessible by fax.
If you take a monetary credit from the seller at
closing for work that needs to be done to the property,
make sure to have the work done.
Copyright 2001 Dian
Hymer
Distributed by Inman News Features
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