Some Home Buying Tips...

As you hit the internet or paper or start calling your favorite real estate agent, such as myself... here are a few things you should consider:

• Study - Do your homework before you buy. Review the prices of comparable homes in the neighborhood, a real estate agent can provide the latest sales data.

• Cure your credit - Today's best mortgage rates require a credit score of more than 700. Learn how to boost your credit score before you apply for a mortgage. Not only will a low credit score cost you more in terms of the interest rate on your mortgage, it could also prevent you from obtaining a mortgage.

Go to AnnualCreditReport.com, the only federal government-sanctioned service for obtaining a truly free credit report from one or all three of the major credit bureaus. The report is free, but you will have to pay a nominal fee to get your credit score.

• Consider a 'Lucky 7' loan - Take advantage of the lower interest rates available with a 7/1 adjustable rate mortgage (ARM), when compared to a fixed-rate 30 year mortgage. The interest rate on a 7/1 ARM is fixed for seven years. In the eighth year the loan resets as an ARM. Just be sure you know what the margin, life cap and periodic caps will be beginning in the eighth year to avoid surprises. Use those seven years to reduce debit and increase your income in preparation for what is likely to be a much higher rate than your starting rate.

• Get pre-approved - Go beyond prequalifying for a mortgage, which only tells you what you can likely borrow. Get a pre-approved mortgage and you'll know your home price shopping parameters. You'll also present yourself to the seller as a serious buyer. Financing in hand will also help level the playing field with all-cash buyers and investors and it will help you negotiate a better purchase price. I CAN'T STRESS THIS ONE ENOUGH!

• Inspect everything - Get a home inspection for a new home, a resale home, a nearly new home or a very old home. Always. Just because it's new doesn't mean it's defect free. Hidden problems can torpedo the value of your home.

• Read the title report - Make sure that any new additions or construction to an existing home are fully permitted and recorded with the local municipality.

• Check the appraisal - Likewise check the appraisal report for any oversights, missed features or other errors that could cause the property to be undervalued.

• Negotiate - Don't be afraid to dicker. It's a buyers' market. Concessions are available from both new home builders and existing home sellers. Ask for help with the closing costs, repairs, even furnishings and other perks. Motivated sellers have much to offer.

• Don't skimp on the help - If you look for the least expensive attorney, real estate agent, inspector, etc., you will get what you pay for. Ask family, friends, co-workers, realty professionals and others you trust for referrals and then carefully vet them.

6 Common Housing Problems that Spook Buyers

Daily Real Estate News October 23, 2007

Potential home buyers with lots of homes to choose from can be easily spooked by disclosures and the results of property inspections — even when the shortcomings are typical for homes of a certain age.In a jittery market such as this one, it’s critical to give buyers tools and knowledge so they can decide which problems are serious.Judi Seip, an associate with Coldwell Banker in Southern California, tells her clients to accompany the inspector so they can put the problems in perspective. Anything a handyman or an electrician could fix in a few hours isn’t worth worrying about, she says.Here are six common issues that trouble buyers and some factors to weigh:1. Water damage. Evidence of water damage frightens buyers, but all water damage isn’t serious. Minor leaks generally cost no more than a few hundred to repair. Get an estimate.2. Missing permits. Ask the home inspector if the work was done well and meets code requirements, even though a permit wasn’t issued.3. Code violations. How expensive is the repair? Ungrounded electrical outlets are common in old houses and easily fixed.4. Cracks in the garage floor. Ask the inspector whether these cracks suggest other related problems. Generally these don’t affect the structure of a home.5. Termites. Termites and termite damage are very common in many parts of the country. It’s important to get rid of them and to get a clear sense of how bad the damage is.6. Foundation cracks and other foundation issues. Older homes often have cracks in the foundation. Get an expert to inspect the problem and estimate — what if anything — needs to be done. Source: The Mercury News, Margaret Steen (10/19/07)