Getting Started Tips
for Buyers
How much can I afford to spend?
Experts say you will typically spend about a
third of your income on financing your home. Before
you start to look for your dream house, you should
figure out just how much of that dream you can
afford. Mortgage lenders look at your ability to
repay the mortgage loan by reviewing:
Your credit history
Your monthly gross income
How much cash you can accumulate for a down payment,
which is usually 10 percent to 20 percent of the
sale price.
For details on checking your credit history, see the
bankrate.com report "Credit: The Basics."
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What is the best time to buy?
Because many buyers prefer to move in the spring
or summer, the market starts to heat up as early as
February. Families with children are anxious to buy
so they can move during summer vacation, before the
new school year begins.
The market slows down in late summer before picking
up again briefly in the fall. November and December
have traditionally been slow months, although some
astute buyers look for bargains during this period.
How long does it take to buy a house?
Buying a house can take from a few days to a few
years. In most cases, the process will take several
months of diligent effort.
How long should I look before buying a home?
You should look until you find the home that is
right for you. This could take a week or a year
depending on your personal needs and the state of
the real estate market. Ideally, you would like to
find a home after you have looked long enough to
know what you like and what you do not like. You
need time to educate yourself about the housing
inventory.
How many times should I look at a house before I
make an offer?
You will no doubt want to take a second or third
look at a house that interests you. Your agent can
arrange this; you should not call the sellers
directly for access. But you should drive or walk by
the house to get a better feel for the neighborhood.
Return several times, at least once during rush
hour, to see if the street is busy or congested.
Drive a few blocks away from the house to see if the
neighborhood holds up to your expectations. A map is
a handy house-hunting aid.
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How do you find a good agent?
A good agent typically works full-time and has
several years of experience at minimum.
You don't usually pay for your agent's services (in
the form of a commission, or percentage of the sales
price of the home). The seller usually pays all
agents in a transaction from the sales proceeds. In
many states, this means that your agent legally is
acting as a subagent of the seller. But in some
states, it's legal for an agent to represent the
buyers exclusively in the transaction and be paid a
commission by the sellers. You also can hire and pay
for your own agent, known as buyer's brokers, whose
legal obligation is exclusively to you.
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What do all of those real estate acronyms in the
ads mean?
If you find yourself stumbling over weird
acronyms in a real estate listing, don't be alarmed.
There is method to the madness of this shorthand
(which is mostly adopted by sellers to save money in
advertising charges). Here are some abbreviations
and the meaning of each, taken from a recent
newspaper classified section:
assum. fin. -- assumable financing
dk -- deck
gar -- garage (garden is usually abbreviated "gard")
expansion pot'l -- may be extra space on the lot, or
possibly vertical potential for a top floor or room
addition. Verify actual potential by checking local
zoning restrictions prior to purchase.
fab pentrm -- fabulous pentroom, a room on top,
underneath the roof, that sometimes has views
FDR -- formal dining room (not the former president)
frplc, fplc, FP -- fireplace
grmet kit -- gourmet kitchen
HDW, HWF, Hdwd -- hardwood floors
hi ceils -- high ceilings
In-law potential -- potential for a separate
apartment. Sometimes, local zoning codes restrict
rentals of such units so be sure the conversion is
legal first
large E-2 plan -- this is one of several floor plans
available in a specific building
lsd pkg. -- leased parking area, may come with an
additional cost
lo dues -- find out just how low these homeowner's
dues are, and in comparison to what?
nr bst schls -- near the best schools
pvt -- private
pwdr rm -- powder room, or half-bath
upr- upper floor
vw, vu, vws, vus -- view(s)
Wow! -- better check this one out.
Resources: "Real Estate's Ambiguous Language You
Oughtta Understand," Glennon H. Neubauer, Ethos
Group Publishing, Diamond Bar, CA; 1993. |
