• If you run across any other abbreviations or terms you don't understand, don't be embarrassed — after all, you don't buy a home every day. The glossary of real estate terms in the back of this book provides further assistance, or you can simply contact a local ERA® office; they'll be happy to "translate" for you.

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HOME HUNTING TIPS

• When I start visiting homes, what should I be looking for the first time through?

  The house you ultimately choose to call home will play a major role in your family's life. A home can be an excellent investment, but more importantly, it should fit the way you live, with spaces and features that appeal to everyone in the family.

  As you look at each home, consider these important factors:

   

  • Is there enough room for you now and in the near future?

  • Is the home's floor plan right for your family?

  • Is there enough storage space?

  • Will you have to replace the appliances?

  • Is the yard the size that you want?

  • Are there enough bathrooms?

  • How much maintenance and/or decorating will you need to do right away? Later?

  • Will your present furniture work in this home?

  
   

• How many bedrooms should I be considering?

  Whether you are married or not, or have kids or not, spare bedrooms come in handy when family and friends come to stay. And when you're not having guests, extra rooms are useful as a library, den, or TV room.

  Another good reason to choose a home with extra bedrooms: extra space will make your home more appealing to a larger number of interested buyers when it comes time to sell.
   

• Is an older home as good a value as a new home?

  It's a matter of personal preference. Both new and older homes offer distinct advantages, depending upon your unique tastes and lifestyle.

  New homes generally have more space in the rooms where today's families do their living, like a family room or activity area. They're usually easier to maintain, too.

  However, many homes built years ago offer more total space for the money, as well as larger yards. Taxes on some older homes may also be lower.

  Some people are charmed by the elegance of an older home, but shy away because they're concerned about potential maintenance costs. Consider a home warranty to get the peace of mind you deserve. The ERA® Home Protection Plan® protects you against unexpected repairs on many home systems and appliances for a full year or more after you move in.

   

  BUYING TIP You can assume that any appliances listed "as is" are on their last legs.

   

• What do I need to bring along when I'm looking at homes?

  Bring your own:

  • Notebook and pen for note-taking

  • Flashlight for seeing enclosed areas

  • Tape measure for checking room sizes, clearances, etc.

  • Camera (digital or 35mm)

  Be prepared to investigate a little. After all, you want to know as much as possible about the home you buy. Sellers understand that because their home is on the market, it will be looked over pretty thoroughly.

  If you need to go back to a home for another look, your sales professional will be happy to schedule an appointment. Also, be sure to ask any questions you have about the home, even if you feel you're being nosy. You have a right to know, and the serious seller will not mind making you feel more confident that you've chosen the right house.

   

• What should I ask about each home that I look at?

  As a rule of thumb, ask any questions you have about specific rooms, features, or functions. Pay particular attention to areas that you feel could become "problem" ones — additions, defects, areas that have been repaired. And above all, if you don't feel your question has been answered, ask until you understand and are satisfied.

  In most cases, your real estate professional will be able to provide you with detailed information about each home you see.

   

• What should I tell the sales professional about the homes I look at?

  Tell the sales professional everything you like and don't like about each home you see. Don't be shy about discussing a home's shortcomings. Is the home too small for your needs? Let the sales professional know. Was the home perfect except for the carpeting? Let the sales professional know.

  However, remember that there can be two types of sales professionals involved in a real estate transaction; those working for the buyer, and, frequently, those paid by and working for the seller. The seller's agent is obligated to help secure the best price for the seller. In addition, seller's agents may also report any confidences you share with them — including any willingness to pay a higher price should the seller not accept your initial offer(s). This is why you may want to be represented by a buyer's agent, because he/she will keep your input confidential. A buyer's agent puts the interests of the buyer — not the seller — first.

   

• How many homes should I look at before I buy?

  There is no set number of homes you should look at before you decide to make an offer on one. That's why providing the sales professional with as many details as possible up front is so helpful. The perfect home may be waiting for you on your first visit. Even if it isn't, the house-hunting process will help you get a feeling for the homes in the community and narrow your choices to a few homes that are worth a second look.

  If you're looking in more than one community, try to make the most of each house-hunting trip. Stop by the local Chamber of Commerce to pick up promotional literature about the community or ask the sales professional for welcome kits, maps, and information about schools, houses of worship, and recreational facilities. Also, be sure to take along a camera and snap some pictures of all the homes you're interested in. That will make it easier to remember and reach a decision.

  HOME HUNTING TIPS

  When you find a home you may be interested in buying, make sure the sales professional asks the owner the following questions:

   

  • How much money do you pay for monthly utilities?

  • Have you had any problems with water or dampness in the basement?

  • Are there defects or problem areas that need to be fixed right away?

  • How old is the furnace and the central air conditioning system?

  • How old is the roof? Have you experienced any leaking?

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APPRAISALS, INSPECTIONS, LEGAL, INSURANCE

• How do I know I'm getting the best value for my money?

  A professional appraisal is the best way to tell if a home is priced fairly. A real estate appraisal is an unbiased opinion of a property's value based on its style and appearance, construction quality, usefulness, and other factors, including the value of comparable properties nearby.

  When you apply for a mortgage, the lender will have a professional real estate appraiser perform an appraisal of the property.

   

• I'd like to have a professional look at the home before I buy it. What does a home inspector do?

  For your own safety, and to make sure you're getting your money's worth in the home you choose, using a professional home inspector is highly recommended. A home inspector will check a variety of things such as your home's plumbing, heating, cooling, and electrical systems, and look for structural problems like a damp or leaky basement, etc.

  Usually, you call an inspector immediately after you've made an offer on a home. However, before you sign any written offer, make sure (or have your attorney make sure) that it includes an inspection clause, which says that your purchase obligation is contingent on the findings of a professional home inspector.

  Your inspector will not tell you whether he or she thinks the home is worth the money you are offering. Rather, the inspector's job is to make you aware of repairs that are recommended or necessary. A seller may be willing to renegotiate a price to accommodate needed repairs, or you may decide that the home will take too much work and money. A professional inspection will help you make an informed decision.

  In choosing a home inspector, consider one who has been certified as a qualified and experienced member by a trade association. Your real estate professional can refer you to qualified inspectors in your area.

   

• Should I be present during the inspection?

  Yes. It's not required, but it is very much to your advantage. You'll be able to clearly understand the inspection report and know exactly which areas need attention. Plus, you can get answers to many questions, tips for maintenance, and a lot of general information that will help you when you move into your new home. Most importantly, you'll see the home through the eyes of an objective third party.

   

• Are there any other inspections I need to have done?

  In addition to the overall inspection, you may wish to have separate tests conducted to check for insects, the presence of radon gas, and the quality of drinking water, to name a few. Talk to your real estate professional for information about these tests and companies in the area that perform them.

   

• Do I need to use a lawyer to buy a home?

  Because the legal contracts and other paperwork involved in buying a home are complex and can be confusing to the general public, many people prefer to work with an attorney.

  Your attorney will review contracts and make you aware of special considerations and potential problems, and can accompany you to the closing to help make everything go as smoothly as possible.

  If you don't know a real estate attorney, ask your real estate professional for help. Sales professionals work with many legal professionals every month and can provide you with the names of several attorneys in the community.

   

  RELOCATION TIP If your move is work-related, many of your moving expenses may be tax-deductible.

  
   

   

• Do I need to talk to my insurance agent?

  Yes, and the sooner the better. Your real estate professional can help you with this, but most insurance professionals have a lot of experience in working with homeowners and can offer useful tips about homeownership, particularly regarding home safety and keeping your premiums low.

  Once you've found a home, work with your insurance agent to develop a homeowner's policy that meets your individual needs. You'll need to bring evidence of a fully-paid policy for your mortgage lender when you come to closing. Make sure you take this step with your insurance provider as early as possible; in many locations you'll have trouble assuming title if you don't have proper insurance in place.

   

  BUYING TIP Measure all rooms for your furniture — don't try to judge by looking at the current owner's placement. Anchor link: Making an offer

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MAKING AN OFFER

• When I've found the home I like, how do I make an offer?

  When you've found a special house you want to call home, you'll probably feel excited and a bit nervous. Let the sales professional know you're ready to write an "offer to purchase" — a written document that declares how much you are willing to pay for the home provided that certain conditions are met. Because it's a legally binding contract that you will sign and date, it may be a good idea to have a lawyer review it, within the grace period noted in the contract.

  This is the time when it is most important for you to keep in mind that, unless you have specifically retained the services of a buyer's agent, the sales professional is working for the seller. As the legal agent of the seller, he or she is obligated to help the seller get the best price, and will report to the seller any confidence you share.

  It's best to make your offer without sharing with the agent your willingness to offer any higher price if the seller does not accept your offer.

  Your offer should have a time limit for the seller to accept it, reject it, or make a counter-offer. If a counter-offer is made, you will have some time to respond. Often, several offers go back and forth until an offer is accepted, or one party decides to end negotiations.

   

• How do I determine the amount of my initial offer?

  There is really no rule to use in calculating an initial offer. Naturally, the buyer wants the best value and the seller want the best price, but negotiations can be influenced by many factors, such as a seller who may be changing jobs and wants to sell quickly, or a buyer who is set on a specific home.

  After you've looked at the home's features, asked questions, checked comparables, and talked about it with your sales professional, you should have a good idea of what the home's value is in the current market. Consider what you can afford, and make an offer that you consider to be fair.

  Most buyers and sellers negotiate on price, with both sides "giving" a little until both agree.

  At that point, you typically will begin the process of arranging for an inspection and applying for a mortgage. See the "Financing" section of this book for more information.

   

• What is "earnest money" and how much do I need?

  When you sign an offer to purchase, your sales professional will ask you for "earnest money." This refers to a monetary commitment that shows you are serious about wanting to buy. Usually, you will be asked to write a check for one to 10 percent of the sale price.

  This money will be held in a special escrow account. If your offer is accepted, your earnest money will be included as part of your down payment. If your offer is not accepted, you'll get back all your earnest money. But keep in mind that if you back out, you may forfeit the full amount.

   

• Is there any way I can protect myself against emergency repair bills in my new home?

  Yes. Home warranties offer you protection against many potentially costly problems not covered by your homeowner's insurance. Such warranties have become increasingly popular in recent years, and for good reason. The coverage can save you thousands in the event of a major mechanical breakdown at a time when your cash reserves have been depleted by your down payment and moving expenses.

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CLOSING PROCEDURES AND MOVING

• There's so much to remember before I close. What do I have to do?

  Your sales professional can help you with many of these considerations:

   

  • Are all the necessary inspections complete?

  • Are all the required repairs complete?

  • When will you conduct your final walk-through inspection?

  • Is your attorney satisfied that title to the property is clear (no one else has a claim on it)?

  • Have you confirmed a date, time, and place for your closing?

  • Who will conduct the closing?

  • Is your insurance policy paid and ready to go into effect the day you close? You'll need a receipt for proof.

  • What form of check should you use (and who should it be made out to) to pay for the closing costs?

  • Has your closing sales professional told you the closing amount?

  • Do you have receipts for the items you have already paid for, including your deposit and inspection fees?

  • Bring your checkbook to cover any last-minute extras that might have been overlooked.

   

• What should I look for on my final walk-through?

  In most cases, you'll be given the opportunity to inspect the home immediately prior to closing. At this time, it's important to check on any work the seller agreed to have done in response to your initial inspection. You should also carefully check the condition of walls and ceilings from which window treatments, pictures, or any other attached furnishings have been removed. If you find any problems, don't hesitate to bring them up at the closing. It's the seller's responsibility to correct them.

   

• What will happen on closing day?

   

  1. The lender's agent will ask for your paid home insurance policy.

  2. The agent will list the adjustments. These include the money you owe the seller (the remainder of the down payment; prepaid taxes) and what the seller owes you (unpaid taxes; prepaid rent).

  3. You will sign the mortgage. This gives the lender legal rights to the property if you don't make your payments.

  4. You will sign the mortgage note (the promise to repay the loan in regular monthly payments).

  5. You will get title from the seller in the form of a signed deed.

  6. The lender's agent will collect the closing costs from you and give you a settlement statement of all the items you have paid for.

  7. The deed and mortgage will be recorded in the town or county Registry of Deeds.

   

• Is there anything I should do immediately after closing?

  The first thing you'll want to do is have the locks changed. Also, put your deed and other important paperwork from the closing in a secure place, preferably a safe deposit box. Even though it's all on file with the county, it's smart to know where your copies are and have access to them at all times.

   

• Should I move myself or use a moving company?

  In almost every case, you can save yourself time and energy by using a reputable moving company to help you move.

  Ask your sales professional, friends, and co-workers for recommendations, then get estimates from several companies. Don't choose a mover based on price alone — consider the reputation and professionalism of the company, too.

  Work closely with the moving company to coordinate your efforts and your move will be achieved with maximum efficiency.

   

• Can a sales professional help with the move itself?

  Yes. Most sales professional are more than willing to offer advice and assistance to new homeowners; all you have to do is ask.