Buying or Selling a Home
Purchasing a home is among the largest single financial transaction most people will ever make. It is not something to take lightly. After all, this is where you are going to spend years or possibly decades of your life. So, do your homework before jumping in. Whether you have purchased a home before or not, there are some important considerations that may save heartache and offer significant savings.
Attain professional representation
With such a large and important decision, this is no time to ‘go it alone.’ Buying a home is much more complicated than signing a few documents and picking up the keys. There are professionals that know every legal nook and cranny that the average person may overlook. In spite of the numerous costs involved, hiring a professional is not the one to skimp on.
When looking for the right representative, remember that you are the boss. You are interviewing them, so don’t hesitate to ask for a resume, past experience, details about why their services are worth the cost or how they will save you money.
It is not uncommon to spend weeks or months finding that perfect home because it is so exciting. But, very few individuals will take the time to shop around for the right lender, real estate broker, title company or real estate attorney. There are a lot of parties involved in real estate transactions and the difference in quality and cost for each one can be significant. A few thousand dollars may not seem important in light of your home purchase, but it is. Don’t give in to the complacent attitude of signing checks just because it is easier.
Get everything in writing
We’ve all had the experience of getting a take-out meal only to discover a mile down the road that you’re missing part of your order. Whether it was a miscommunication or an honest mistake, these things happen. The same is true with larger transactions. Be sure to get every detail in writing and to read through it carefully. Even if all the involved parties are honest and have your best interests in mind, miscommunications still happen. And while missing fries from your take-out meal is upsetting, it is nothing compared to discovering that your monthly payments are larger than expected or that rear-landscaping costs are not included. Getting every detail in writing not only provides accurate expectations, it also offers you some legal evidence in case there are any disputes.
Know all the costs
It is easy to get lost in all the commissions and fees of buying or selling a home. But, ignoring the various costs can be expensive. Keep a list of expenses and make sure you understand each one. Who is paying for the appraisal, the inspection or title insurance? If you are the seller, what property taxes are due for the time you were the homeowner? Buyers, how much will annual taxes cost? Are there home-owners association (HOA) dues? Be aware of which party is paying for closing costs, warranties or any other associated costs. Tell your agent you don’t want any surprises.
Don’t make emotional decisions
Don’t let emotion drive your decision process. At the end of the day, this is a financial transaction. Whether you are buying your first home or selling a home you raised a family in, the person on the other side of the deal is more concerned about their own emotions. A cool, level head is always advised. This doesn’t mean you can’t or won’t have emotions and desires. If the tire-swing in the backyard reminds you of a happy childhood, that’s great. Just don’t let it cloud your judgment.
What to do next
- Speak with your professional team. Not only will you want to meet with professionals in the real estate field, you will also want to talk with an accountant or investment advisor specific to their area of expertise. Little decisions can make a big difference in taxes or other expenses.
- Determine what you can afford. If you are seeking out a loan, you can get pre-approved for a specific amount. Remember, what you can borrow and what you can afford are two very different things.
- Hire a professional and begin searching for your home.