Searching for a Home

Sources of Listing Information

There are numerous sources that provide current information about homes for sale in your target area. The Multiple Listing Service (MLS) generally has the most comprehensive database of listing inventory. Any real estate agent should have access to these home listings. Several online resources, such as Home Quarters, also make this information available to buyers who register on their sites. Many of these include a feature that keeps a record of your home criteria and searches.

You'll also find home listings in newspapers, homes magazines, and cable television shows. And of course, a regular drive through the targeted area will help you to identify new yard signs that appear.

The personal benefits are less easy to articulate into a specific list, but are in many cases equally compelling as the financial aspects of homeownership. The following is a list of common motivators that inspire people to own their own homes. Some of these comments may apply to your situation:

Choosing a Buyer's Agent

Hiring a buyer's agent may require that you sign a contract. The contract is signed prior to services being rendered. It usually identifies a time period during which the agent will work with you to find a house. Any buying agent should be able to provide the following services:

• Give you detailed information on current market activity and current listings
• Keep you informed of new listings that hit the market
• Coordinate property showings and either accompany you on showings or preview properties on your behalf
• Review and explain all pertinent legal forms and contracts with you
• Research the seller and their property to discern any problems or unique issues that might influence your decision to make a particular offer
• Advise you on how to write an offer and what to include in that offer
• Negotiate on your behalf with a commitment to protect your best interests
• Assist you with arranging financing
• Represent you by keeping your personal and financial position confidential and being willing to offer you anonymity if requested

Your contract will usually spell out how the buyer's agent will be compensated for his or her services. Some agents require a small retainer up front, with the balance of the fee being paid as a commission upon the close of the sale. This formalizes your business relationship with the agent and also commits the agent to servicing your real estate needs. Other buying agents will request they be paid a full commission out of the proceeds of the sale. The commission usually amounts to half of the total fee that the seller has agreed to pay their listing agent upon the close of the transaction. Some buying agents such as Home Quarters will offer a rebate paid at closing.

New Home or Resale Home?

This decision is a matter of personal taste for most buyers. Some people prefer to buy older homes, appreciating their unique features, layouts and designs.

There are many positive reasons to purchase a resale home:

Generally speaking, when you buy an older home, you have a pretty good sense of what you are buying. If the floor slants, it slants. There is a history to the house that will tell how it has been treated and whether it will continue to stand the test of time. A professional home inspector is an important party to this purchase decision.

Older homes do tend to have a feel about them, whether good or bad. Those that have been neglected are often excellent candidates for renovation and remodeling, which can accelerate the opportunity for equity building. Those that have been lovingly cared for beckon those buyers who are looking for an older home with charm.

Older homes tend to be located in established neighborhoods. The schools, shopping districts, and public areas are developed and in operation. Although older areas can go through dramatic transitional periods, the savvy buyer can often spot those trends.

Older homes tend to have a more predictable resale value. This is akin to the pricing patterns on used cars. The book value is set in a range, meaning the car should sell close to that range based on its condition. Likewise, if you buy an existing home and do nothing with it except maintain it, then the value should appreciate with the market.

The new home buyer is looking for something else entirely. There are many unique characteristics associated with the purchase of a new home:

A new home can be chosen for its design and layout, according to a buyer's particular needs. Model homes allow the buyer to see the end result, while also encouraging the buyer to make minor changes that will better suit his or her needs.

New homes are clean. The new paint, carpet, tile, and cabinets all contribute to the feeling of a fresh start. Many people insist on buying new homes just like they buy new cars. They prefer to "break it in," rather than live in a property where someone else has been. And, a new home is certainly easier to settle into than an existing home, since the property should be delivered with absolutely no sign of wear and tear.

New homes are often located near new service centers. The shops and restaurants are close by and are built to suit the demographics of the new home community.

A new home development often brings with it other amenities that contribute to the quality of life for the home buyer, such as new parks and playgrounds, a community swimming pool, tennis courts, golf courses, and green areas that are maintained by the developer.

The resale values of new homes can vary greatly. The buyer should consider how long he expects to be in the house when purchasing a new home, especially if the home is in an area targeted for new home developments. If it is possible that you will be selling the home within the short time frame of a year or two, then investigate carefully to ascertain how many additional homes will be built in the neighborhood or in the general area surrounding your property. If you have to put your home back on the market, you will be competing with builders who set their prices according to what the buyers are willing to bear and the quota of homes they need to sell in a given month.

Hidden Costs for Newly Built Homes

Over and above the usual home purchase closing costs, buyers must be aware of all the other costs that can come with a newly built home. These might include things that you would have expected to be part of the sale price but are not. Some selling prices may only seem lower because they actually exclude certain additional costs.

Items frequently excluded can be:

• Garden walls and fencing
• Driveway paving and gates
• Landscaping and walkways
• Utility connections and meters
• Various administrative charges such as survey fees, warranties, levies, etc.

Do not confuse these items with the costs to upgrade finishes in your house such as flooring, kitchen cupboards, bathroom fixtures, lighting, etc.

Preparing to Negotiate

When preparing to negotiate on the purchase of a home, it is good to keep the following in mind:

• How long has the house been on the market?
• Have there been any previous offers? If yes, why weren't they accepted?
• If the home appears to be a new listing, does research show that the property was listed any time within the past two years? Sometimes sellers will remove their home from the market for a short period of time and then re-list it.
• Have the sellers already purchased another home? If so, do they need to sell their existing home before they can close on their new home?
• Is the seller building a new home? If so, they might have difficulty picking an exact date when they can vacate the property, readying it for occupancy.
• Are they selling due to a spouse getting a new job in a new city? If so, do they only have a certain amount of time to sell before a third party relocation company buys the house from the seller and then places it back on the market?
• If a couple is selling the property, are they involved in a divorce? If so, are they both willing sellers, or is there challenge surrounding the sale of the house?
• Is this an estate sale, where the seller is deceased and children or relatives are offering the property? Generally speaking, when a group has to make a decision you might be looking at a difficult decision process.
• Is the seller serious about selling or does he/she have a history of putting the house on the market just to see if someone will pay their price?
• Is there any other reason motivating the seller to create undue urgency?
• Is there any indication that the seller is willing to negotiate? Offer creative financing? Demonstrate flexibility around issues such as the closing date?

Many of these questions are of a personal nature, and are certainly not the type of question you would ask a perfect stranger! And yet, this type of information can assist you in successfully negotiating the price and terms of the sale. If you feel this type of information could be of value, then consider contracting with a buyer's agent who is skilled in researching sellers and negotiating on the buyer's behalf. Armed with the right information and the proper negotiating skills, you can achieve a fair price with minimum conflict between your needs and those of the seller.

Evaluating Properties - The Walk Through

When you are preparing to preview a house for the first time, make sure you have a clear idea in your mind of what features the house will need to have, and what features you would like the property to include. Have your checklist ready so that you can record your notes as you evaluate the home. The more houses you look at, the more you will want a record of what you have seen and which properties appealed to you most.

In addition to looking for those obvious features that fit your stated goals, also try to develop a feel for the characteristics of the property that are not quite so evident at first glance. The general condition of the house should be assessed according to your willingness or ability to make repairs at a later date. The exterior and foundation should be checked for any signs of neglect, since exterior renovations often come with a hefty price tag. Draw your own conclusions about the layout and the general flow of the house as you move from room to room. And finally, if you find a particular property interesting, try to zero in on why the owner is selling and what their time frame is. The more you understand who is on the other side of the table, the better the chance that your negotiations will go smoothly.