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  • Buying a Home


  • Home Inspections Avert Future Headaches


  • How to Choose a Neighborhood for Your Home Search


  • Neighborhood Search Strategies for Limited Budgets


  • Take Charge When Buying a Home


  • The Basics of Making an Offer


  • Why Use a Real Estate Agent When Buying a Home?



    • Buying a Home

    Buying a home is an exciting and complex event not to be taken lightly. It can also be a very time-consuming and costly one if you're not familiar with all aspects of the process, and don't have all the best information and resources at available

    One of our specialties is representing the best interests of Franklin County area buyers throughout the home buying process. Our comprehensive, high-quality services can save you time and money, as well as make the experience more enjoyable and less stressful.

    If you're like most people, buying a home is the biggest investment you will ever make. So whether you're buying a starter home, your dream home, or an investment property, why not take advantage of our experience as a local market expert for Franklin County and surrounding areas to make the most informed decisions you can, every step of the way?



    Home Inspections Avert Future Headaches

    Suppose you bought a house and later discovered, to your dismay, that the stucco exterior concealed a nasty case of dry rot. Or suppose that when you fired up the furnace in the winter, you discovered a cracked heat exchanger leaking gas into your home. The best way to avoid unpleasant surprises like these is to arrange for a home inspection before you buy.

    Home Inspections Help You Avoid Unpleasant Surprises
    A good home inspection is an objective, top-to-bottom examination of a home and everything that comes with it. The standard inspection report includes a review of the home's heating and air-conditioning systems; plumbing and wiring; roof, attic, walls, ceilings, floors, windows, doors, foundation and basement.
    Getting a professional inspection is crucial for older homes because age often takes its toll on the roof and other hard-to-reach areas. Problems can also be the result of neglect or hazardous repair work, such as a past owner's failed attempt to install lights and an outlet in a linen closet.
    A home inspection is also a wise investment when buying a new home. In fact, new homes frequently have defects, whether caused by an oversight during construction or simply human error.

    Getting an Inspector
    Real estate agents can usually recommend an experienced home inspector. Make sure to get an unbiased inspector. You can find one through word-of-mouth referrals, or look in the Yellow Pages or online under "Building Inspection" or "Home Inspection."
    Home inspections cost about a few hundred dollars, depending on the size of the house and location. Inspection fees tend to be higher in urban areas than in rural areas. You may find the cost of inspection high, but it is money well spent. Think of it as an investment in your investment – your future home.
    Some builders may try to dissuade you from getting a home inspection on a home they've built. They may not necessarily be trying to hide anything because most builders guarantee their work and will fix any problems in your new home before you move in. Some builders, in fact, will offer to do their own inspections. But it’s best to have an objective professional appraisal - insist on a third-party inspector.

    An Inspection Will Educate You about Your House
    Education is another good reason for getting an inspection. Most buyers want to learn as much as they can about their purchase so they can protect their investment. An examination by an impartial home inspector helps in this learning process.
    Ask if you can follow the home inspector on his or her rounds. Most inspectors are glad to share their knowledge, and you'll be able to ask plenty of questions.

    Inspection Timing and Results
    Homebuyers usually arrange for an inspection after signing a contract or purchase agreement with the seller. The results may be available immediately or within a few days. The home inspector will review his or her findings with you and alert you to any costly or potentially hazardous conditions. In some cases, you may be advised not to buy the home unless such problems are remedied.
    You could include a clause in your purchase agreement that makes your purchase contingent upon satisfactory inspection results. If major problems are found, you can back out of the deal. If costly repairs are warranted, the seller may be willing to adjust the home's price or the contract's terms. But when only minor repairs are needed, the buyer and seller can usually work out an agreement that won't affect the sale price.



    How to Choose a Neighborhood for Your Home Search

    Narrow your home search by identifying neighborhoods that are right for you. This helps keep your search focused and efficient. Your local Real Estate Agent can offer neighborhood information to guide you in your search.
    When evaluating a neighborhood you should investigate local conditions. Depending on your own particular needs and tastes, some of the following factors may be more important considerations than others:

  • quality of schools
  • property values
  • traffic
  • crime rate
  • future construction
  • proximity to schools, employment, hospitals, shops, public transportation, prisons, freeways, airports, beaches, parks, stadiums and cultural centers such as museums and theaters


    • Neighborhood Search Strategies for Limited Budgets

    If you’re a first time-buyer with limited financial resources, it's wise to buy a home that meets your primary needs in the best neighborhood that fits within your price range. You can maximize your home purchase location by incorporating some of the following strategies into your neighborhood search:

  • Upcoming neighborhoods: Look for communities that are likely to become "hot neighborhoods" in the coming years. They can often be discovered on the periphery of the most continuously desirable areas.
    Check for planned future development such as additional transit; new community services such as pools and theatres; and chain stores planning to move in. Be sure to look for a home in a good neighborhood that is a bit farther out of the city. If commuting is a concern, purchase a home that is close to public transportation.
  • Neighborhood demand: Look at the neighborhood demand by asking your real estate agent whether multiple offers are being made, whether the gap between the list price and sale price is decreasing and whether there is active community involvement. You can also drive around neighborhoods and see how many "sale pending" and "sold" signs there are in a particular area.
  • Co-ownership: Look into purchasing a condominium or co-op, rather than a house, in a desirable neighborhood. This way you still may be able to purchase in a prime area that you otherwise could not afford.



    Take Charge When Buying a Home

    If you approach the home buying process intelligently and with confidence, you are much more likely to buy a house you'll be proud to call home.
    Approaching the task of buying a home can be overwhelming; there's so much to consider:

  • How much house can I afford?
  • How can I find the best loan?
  • Where will I come up with a down payment, and how much will I need?
  • Should I buy a new or resale home, and which will go up in value?
  • Should I work with an agent or look at homes on my own?
    And these questions are just the beginning. Buying a home is one of the largest financial transactions in your lifetime - do your research so you know what you’re doing.
    Here are the two most important things to remember no matter where you are on the road to home ownership:

    1. You can and should understand everything that is happening in the home buying process.
    There is nothing that is so complex that it can't be easily explained to anyone with average intelligence. Just because you don't apply for a thirty year mortgage once a week doesn't mean you have to take the first one that comes along. You'll need to learn some new terms, apply some new concepts and take the time to understand what you're getting into. If, at any point, something happens that doesn't make sense to you, simply demand a full and complete explanation. If it still doesn't make sense, seek help from someone you trust like your CPA, your banker or maybe an online real estate columnist.

    2. In the world of real estate sales, YOU are the most important person in the entire process.
    It's easy to think that everyone else carries more weight than you. The agent talks fast and has an answer for everything. The lender may decline your loan application, and on and on. But the truth is that you, the buyer, are the one person in the transaction that makes it all happen. If you decide to not buy, the entire process comes to a grinding halt. So flex your consumer muscle and take command of this process. Surround yourself with a team of professionals that you have confidence in and make them work for you. Approach home buying with intelligence and confidence, and by doing your homework, and you are more likely to buy a house you’re happy with and to know that you made the right decision.



    The Basics of Making an Offer

    A written proposal is the foundation of a real estate transaction. Oral promises are not legally enforceable when it comes to the sale of real estate. Therefore, you need to enter into a written contract, which starts with your written proposal. This proposal not only specifies price, but also all the terms and conditions of the purchase. For example, if the seller offered to help with $2,000 toward your closing costs, make sure that's included in your written offer and in the final completed contract, or you won't have grounds for collecting it later. Real Estate Agents have standard purchase agreements and will help you put together a written, legally binding offer that reflects the price as well as terms and conditions that are right for you. Your Real Estate Agent will guide you through the offer, counteroffer, negotiating and closing processes. In many states certain disclosure laws must be followed by the seller, and the Real Estate Agent will ensure that this takes place. If you are not working with a real estate agent, keep in mind that you must draw up a purchase offer or contract that conforms to state and local laws and that incorporates all of the key items. State laws vary, and certain provisions may be required in your area. After the offer is drawn up and signed, it is usually presented to the seller by your real estate agent, by the seller's real estate agent, if that's a different agent, or often by the two together. In a few areas, sales contracts are drawn up by the parties' lawyers.

    What is in an Offer?

    The purchase offer you submit, if accepted as it stands, will become a binding sales contract (known in some areas as a purchase agreement, earnest money agreement or deposit receipt). So it's important that the purchase offer contains all the items that will serve as a "blueprint for the final sale." The purchase offer includes items such as:

  • address and the legal description of the property
  • sale price
  • terms: for example, all cash or subject to you obtaining a mortgage for a given amount
  • seller's promise to provide clear title (ownership)
  • target date for closing (the actual sale)

  • amount of earnest money deposit accompanying the offer, whether it's a check, cash or promissory note, and how it's to be returned to you if the offer is rejected - or kept as damages if you later back out for no good reason
  • method by which real estate taxes, rents, fuel, water bills and utilities payments are to be adjusted (prorated) between buyer and seller
  • information about who will pay for title insurance, survey, termite inspections, etc.
  • type of deed to be given
  • other requirements specific to your state, which might include a chance for an attorney to review the contract, disclosure of specific environmental hazards or other state-specific clauses
  • a provision that the buyer may make a last-minute walkthrough inspection of the property just before the closing
  • a time limit (preferably short) after which the offer will expire
  • contingencies, which are an extremely important matter and that are discussed in detail below
    Contingencies - “Subject to” Clauses
    If your offer says "this offer is contingent upon (or subject to) a certain event," you're saying that you will only go through with the purchase if that event occurs. Here are two common contingencies contained in a purchase offer:
  • The buyer obtaining specific financing from a lending institution: If the loan can't be found, the buyer won't be bound by the contract.
  • A satisfactory report by a home inspector: for example, "within 10 days after acceptance of the offer." The seller must wait 10 days to see if the inspector submits a report that satisfies the buyer. If not, the contract would become void. Again, make sure that all the details are explicitly stated in the written contract.

    Negotiating Tips
    You're in a strong bargaining position, that is, you look particularly welcome to a seller, if:

  • you're an all-cash buyer
  • you're already have a preapproved mortgage and you don't have a present house that has to be sold before you can afford to buy
  • you’re able to close and take possession at a time that is especially convenient for the seller
    In these circumstances, you may be able to negotiate some discount from the listed price.
    On the other hand, in a "hot" seller's market, if the perfect house comes on the market, you may want to offer the list price (or more) to beat out other early offers.

    It's very helpful to find out why the house is being sold and whether the seller is under pressure. Keep the following considerations in mind:
  • every month a vacant house remains unsold represents considerable extra expense for the seller
  • if the sellers are divorcing, they may want to sell quickly
  • estate sales often yield a bargain in return for a prompt deal

    Earnest Money
    This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show "good faith." A real estate agent or an attorney usually holds the deposit, the amount of which varies from community to community. This will become part of your down payment.
    Buyers: the Seller's Response to Your Offer
    You will have a binding contract if the seller, upon receiving your written offer, signs an acceptance just as it stands, unconditionally. The offer becomes a firm contract as soon as you are notified of acceptance. If the offer is rejected, that's that - the sellers could not later change their minds and hold you to it.
    If the seller likes everything except the sale price, or the proposed closing date, or the basement pool table you want left with the property, you may receive a written counteroffer including the changes the seller prefers. You are then free to accept it, reject it or even make your own counteroffer. For example, "We accept the counteroffer with the higher price, except that we still insist on having the pool table."
    Each time either party makes any change in the terms, the other side is free to accept, reject or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side's proposal.
    Buyers: Withdrawing an Offer
    Can you take back an offer? In most cases the answer is yes, right up until the moment it is accepted, or even in some cases, if you haven't yet been notified of acceptance. If you do want to revoke your offer, be sure to do so only after consulting a lawyer who is experienced in real estate matters. You don't want to lose your earnest money deposit or find yourself being sued for damages the seller may have suffered by relying on your actions.
    Sellers: Calculating Your Net Proceeds

    When an offer comes in, you can accept it exactly as it stands, refuse it (seldom a useful response) or make a counteroffer to the buyers with the changes you want. In evaluating a purchase offer, you should estimate the amount of cash you'll walk away with when the transaction is complete. For example, when you're presented with two offers at the same time, you may discover you're better off accepting the one with the lower sale price if the other asks you to pay points to the buyer's lending institution.

    Once you have a specific proposal before you, calculating net proceeds becomes simple. From the proposed purchase price you can subtract the following costs:
  • payoff amount on present mortgage
  • any other liens (equity loan, judgments)
  • broker's commission
  • legal costs of selling (attorney, escrow agent)
  • transfer taxes
  • unpaid property taxes and water and other utility bills
  • if required by the contract: cost of survey, termite inspection, buyer's closing costs, repairs, etc.
    Your present mortgage lender may maintain an escrow account into which you deposit money to be used for property tax bills and homeowner's insurance. In that case, remember that you will receive a refund of money left in that account, which will add to your proceeds.
    Sellers: Counteroffers
    When you receive a purchase offer from a would-be buyer, remember that unless you accept it exactly as it stands, unconditionally, the buyer is free to walk away. Any change you make in a counteroffer puts you at risk of losing that chance to sell.
    Who pays for what items is often determined by local custom. You can, however, negotiate with the buyer any agreement you want about who pays for the following costs:

  • termite inspection
  • survey
  • buyer's closing costs
  • points paid to the buyer's lender
  • buyer's broker fees
  • repairs required by the lender
  • home protection policy

    You may feel some of these costs are none of your business, but many buyers - particularly first-timer buyers - are short of cash. Helping them may be the best way to get your home sold.


    Why Use a Real Estate Agent When Buying a Home?


    A real estate agent can help you understand everything you need to know about the home buying process. Real Estate Agents are committed to treat all parties to a transaction honestly. Real Estate Agents subscribe to a strict Code of Ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reported that 84% of home buyers would use the same Real Estate Agent again. Real estate transactions involve one of the biggest financial investments of most people’s lifetime. Transactions today usually exceed $250,000. If you had a $250,000 income tax problem, would you attempt to deal with it without the help of a certified professional accountant? If you had a $250,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be wise to work with a professional Real Estate Agent when you are buying a home. If you're still not convinced of the value of a Real Estate Agent, here are more reasons to use one:

    1. Your Real Estate Agent can help you determine your buying power – in other words your financial reserves plus your borrowing capacity. If you give a Real Estate Agent some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders - banks and mortgage companies - offer limited choices.
    2. Your Real Estate Agent has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
    3. Your Real Estate Agent can assist you in the selection process by providing objective information about each property. Agents can provide local community information on utilities, zoning, schools, etc. There are two things you'll want to know: First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
    4. Your Real Estate Agent can help you with negotiations and inspections. There are many negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or appliances. The purchase agreement should allow time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
    5. Your Real Estate Agent provides due diligence during the property evaluation. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your Real Estate Agent can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports.

    You will also want to see a preliminary report on the property title. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. The Real Estate Agent, title search company or attorney can help you resolve issues that might cause problems at a later date.
    6. Your Real Estate Agent can help you understand different financing options and identify qualified lenders.
    7. Your Real Estate Agent can guide you through the closing process and make sure everything flows together smoothly.