Smart Home Buying

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:

Budget
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?

Neighborhood
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?

Property Condition
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?

Price
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?

Negotiations
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?

Sales Contract
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?

Repairs
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?

Financing
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?

Closing
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?

Taking possession
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?