At best, buying a home is a complicated process. At worst, it can be an emotional and financial nightmare! Not only do you have to find the right house, you have to verify its condition, negotiate a good price and favorable terms, pay for it, take title, move in, all the while ensuring you are buying a home that you will be able to resell when the time comes. Here are some things to think about during the process:
- How much can you comfortably afford and still have enough money to keep the lights on, fund your retirement, and put your kids through college?
- Is the figure above based on one income or two?
- What will happen if either you or your spouse loses your job?
- Is the home you want available in your price range?
- How much more will you have to spend to get everything you want?
- What are the right compromises to make?
- Is the home you like in an area where home values are appreciating or depreciating?
- Are there good schools in the area?
- How is crime in the area?
- Are the homes in the area owner occupied or tenant occupied?
- How does the house fit into the neighborhood?
- Is it over-improved?
- Is it a smaller home surrounded by larger homes or vice versa?
- Can the neighborhood support any improvements you make to the property?
- Would lots of people like to live in that neighborhood or did you fall in love with a nice house in an undesirable neighborhood?
- Have you received and reviewed all the relevant disclosures relating to the property?
- Is there a foundation problem?
- Has the home ever had a foundation repair?
- Is there a warranty that is transferable?
- How will a foundation repair affect the future value of the home?
- How is the quality of the construction?
- Is it a solid home built to last or is it a pig wearing lipstick?
- Is the floor plan livable?
- Can many different types of families live there?
- Is there a lot of wasted space?
- Is it energy efficient?
- If the home needs updating, can you buy it cheap enough to justify the expense?
- Is the size and shape of the lot sufficient not only for your purposes, but for future buyers?
- What repairs has the seller made?
- If the home needs a new roof, for example, does the homeowner have the cash or equity in the home to make the repair if the insurance company rejects the claim?
- Have you received and reviewed a CMA?
- Is the home priced too high? Too low?
- Has the home increased or decreased in value over the past several years?
- What are the trends in the neighborhood?
- Is this home in line with those trends?
- If it is priced higher than the market, why?
- If it is priced lower than the market, why?
- How many times has the house changed hands?
- What is the TAV? Too high?
- Why is the home being sold?
- When does the seller need to move and is there any flexibility in that date?
- Is the seller under financial distress?
- Is the home in pre-foreclosure? A short sale? Bank owned?
- Are there any obvious repairs that need to be negotiated in advance of the inspection?
- How much do you like this home?
- How many other homes have you seen that suit your needs?
- How soon do you need to move?
- Do you have a lock that is going to expire?
- Does the current homeowner have an FHA mortgage to pay off?
- Is their loan assumable with qualifying?
- How much is the seller’s payoff?
- How much equity does the seller have in the home?
- Who is paying closing costs? Which ones?
- Should you get a home warranty? What coverages?
- Who writes the sales contract?
- Do the terms of the contract favor the buyer or the seller?
- Do you need a lawyer?
- What contingencies do you need?
- What repairs may your lender require?
- What repairs may your insurance company require?
- Is the house insurable?
- When should you ask the seller to make the repair?
- When should you ask for a repair allowance?
- What if the seller refuses to make repairs?
- How do you know if the seller completed the agreed upon repairs?
- Were the repairs completed by a qualified professional?
- Are the repairs completed to your satisfaction?
- What does the CLUE report show?
- Should you use a bank or a broker?
- Is your lender giving you good advice?
- Is your lender telling you the truth?
- What is the best loan for you?
- How do loans compare in upfront cost? Long term cost? Closing costs?
- Can your lender deliver what they promise?
- Will your lender deliver or bait and switch at the last minute?
- What do you do if your lender fails to perform?
- What do you do if you don’t qualify?
- How do you get your earnest money back if you don’t qualify?
- What about your option fee?
- What lender docs do you need to review in advance?
- Do you need an appraisal?
- What if the house doesn’t appraise?
- Which title company should be used?
- Do you need a title policy and who pays for it?
- Do you need a lawyer to review your loan docs?
- Do you need a lawyer to attend closing?
- What if your loan isn’t ready on time?
- What if the sale of your current house (if you own one) falls through?
- Is the HUD statement accurate? Are you being overcharged? Undercharged?
- Is there a survey you can use or do you need a new one?
- What if the current survey is rejected by the title company?
- What if there are liens against the property?
- What if title contingencies can’t be cleared?
- When do you get the keys?
- When does the seller move out?
- What if the seller leaves the house in bad condition?
- What if the seller refuses to leave?
- How do you take care of the house?
- Do you need to file for exemptions?