SJSTitle

Starting Series

This series is for those just starting the home buying process.

How Can I Determine My Housing Needs Before I Begin The Search?

Your home should fit the way you live, with spaces and features that appeal to the whole family.

Before you begin looking at homes make a list of your priorities – things like location and size.
 

  • Should the house be close to certain schools? your job? to public transportation?

  • How large should the house be?

  • What type of lot do you prefer?

  • What kinds of amenities are you looking for?
     

Establish a set of minimum requirements and a ‘wish list.” Minimum requirements are things that a house must have for you to consider it while a “wish list” covers things that you’d like to have but that aren’t essential

How Do I Begin The Process Of Buying A Home?

start by thinking about your situation.

  • Are you ready to buy a home?

  • How much can you afford in a monthly mortgage payment?

  • How much space do you need?

  • What areas of town do you like?
     

After you answer these questions, make a “To Do” list and start doing casual research. Talk to friends and family, drive through neighborhoods, and look in the “Homes” section of the newspaper, or online.

How Do Lenders Decide The Maximum Loan Amount That Buyers Can Afford?

lenders consider your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses.

 

Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support.

 

According to the FHA, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, should total no more than 41% of income. Lenders also consider cash available for down payment and closing costs credit history and the rest of your financial picture when determining your maximum loan amount.

How Does Purchasing A Home Compare With Renting?

The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity take advantage of tax benefits and protect yourself against rent increases.Also, you may be at the mercy of the landlord for housing.

Owning a home has many benefits. When you make a mortgage payment, you are building equity increasing YOUR net worth.


Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities like insurance, real estate taxes, and upkeep which can be substantial. But given the freedom, stability, and security of owning your own home they are worth it.

Why Use a Realtor

A state license is required to sell real estate. But roughly half of those licensed take the additional step of becoming a Realtor.

As we show you in this video, only members of the National Association of Realtors – NAR – are entitled to use that registered trademark and call themselves a Realtor.

As members, they adhere to a strict Code of Ethics and have access to classes, seminars and certification. Their aim is to be experts in their community aware of real estate trends and local and neighborhood issues. They apply that expertise to help buyers and sellers succeed.

You can find a certified Realtor by looking in local sources asking around or searching here.

How Can I Find Out About Schools & Community Resources?

The video puts this in more visual terms, but basically, contact the local Chamber of Commerce for promotional literature or talk to your real estate agent about welcome kits, maps, and other information.

You can get information about school systems by contacting the city or county school board or the local schools.

You may also want to visit the local library. It can be an excellent source for information on local events and resources and the librarians will probably be able to answer many of the questions you have.

How Can I Find Out About Schools & Community Resources?

Contact the local Chamber of Commerce for promotional literature or talk to your real estate agent about welcome kits, maps, and other information.

You can get information about school systems by contacting the city or county school board or the local schools.

You may also want to visit the local library. It can be an excellent source for information on local events and resources and the librarians will probably be able to answer many of the questions you have.

What Should I Look For When Walking Through A Home?

In addition to comparing the home to your minimum requirement and wish lists use the HUD Home Scorecard and consider the following:

  • Is there enough room for both the present and the future?

  • Are there enough bedrooms and bathrooms?

  • Is the house structurally sound?

  • Do the mechanical systems and appliances work?

  • Is the yard big enough?

  • Do you like the floor plan?

  • Will your furniture fit in the space?

  • Is there enough storage space?
     

Bring a tape measure to better answer these questions and write down your measurements.

  • Does anything need to repaired or replaced?

  • Will the seller repair or replace the items?
     

Imagine the house in good weather and bad and in each season. Will you be happy with it year-round? Take your time and think carefully about each house you see. Keep the scorecard and notes for each one.

How Can I Keep Track Of All The Homes I See?

Take photographs of each house: the outside, the major rooms, the yard and extra features that you like or ones you see as potential problems.

Write things down as you go. And don’t hesitate to return for a second look.

Use the HUD Home Scorecard (www.hud.gov/buying/checklist.pdf) to organize your photos and notes for each house.

What Questions Should I Ask When Looking At Homes?

Many of your questions should focus on potential problems and maintenance issues.

Does anything need to be replaced? What things require ongoing maintenance like paint, roof, heating and AC, appliances and carpet?

Also ask about the house and neighborhood focusing on quality of life issues. Be sure the seller’s or real estate agent’s answers are clear and complete. Ask questions until you understand all of the information they’ve given.

Making a list of questions ahead of time will help you organize your thoughts and arrange all of the information you receive. The HUD Home Scorecard can help you develop your question list and keep a record for each potential home.

Is An Older Home A Better Value Than A New One?

Generally, older homes may be in more established neighborhoods offer more ambiance and have lower property tax rates. People who buy older homes, however shouldn’t mind maintaining their home and making some repairs.

Newer homes tend to use more modern architecture and systems are usually easier to maintain and may be more energy-efficient. People who buy new homes often don’t want to worry initially about upkeep and repairs.

What Is Earnest Money, And How Much Should I Set Aside?

Earnest money is money you put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price though the amount can vary with local customs and conditions.


If your offer is accepted the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your earnest money is returned to you. If you back out of a deal, you may forfeit the entire amount.

What Does A Home Inspector Do, And How Does An Inspection Figure In The Purchase Of A Home?

An inspector checks the safety of your potential new home.

Home Inspectors focus especially on the structure, construction and mechanical systems of the house and will make you aware of only repairs that are needed.

The Inspector does not evaluate whether or not you’re getting good value for your money.

Generally, an inspector checks (and gives estimates for repairs on):

  • the electrical system

  • plumbing and waste disposal

  • the water heater

  • insulation and ventilation

  • the heating and AC system

  • water source and quality

  • the potential presence of pests

  • the foundation, doors, windows, ceilings, walls, floors, and roof.
     

Be sure to hire a home inspector that is qualified and experienced. It’s a good idea to have an inspection before you sign a written offer since once the deal is closed you’ve bought the house as-is.

What About A Home Located In A Flood Plain?

If you live in a flood plain lenders will require that you have flood insurance before lending any money to you. But if you live near a flood plain, you may choose whether or not to get flood insurance coverage for your home.

 

Check the National Flood Insurance Program site  at FloodSmart.gov  for more information. And work with an insurance agent to construct a policy that fits your needs.

What Are “Home Warranties”, And Should I Consider Them?

Essentially, home warranties offer you protection for a specific period of time, such as one year, against potentially costly problems like unexpected repairs on appliances or home systems which are not covered by homeowner’s insurance.

Warranties are becoming more popular because they offer protection during the time immediately following the purchase of a home a time when many people find themselves cash-strapped.

What Should I Look Out For During The Final Walk-Through?

This will likely be the first opportunity to examine the house without furniture giving you a clear view of everything.
Check the walls and ceilings carefully as well as any work the seller agreed to do in response to the inspection.


Any problems discovered previously that you find uncorrected should be brought up prior to closing. It is the seller’s responsibility to fix them.