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 Do you know how may people buy a home each year? Lot's of people - about 42 million in the U.S. alone. If you're thinking about moving, then the more information you have at your disposal the better. That's one of the reasons we've put together this information on home buying tips - they can come in pretty handy.
Tip #1 - Home Location
The first of our tips has to do with the home's location. We're listing this tip first because that's where it belongs - at the top of your list of things to consider. As consumers, we buy lots of goods and services. We also buy assets like cars, boats and homes. For many of us, our home is the only asset we will buy that stands a pretty good chance of appreciating, or increasing, in value over time.
Like many items that are bought and sold in a free market, homes are subject to the forces of supply and demand. The higher the demand for homes in a particular area, then the higher the selling price will be. This is why location is so important. You want to move into an area where demand is high.
Factors Influencing Demand for Homes
When you're looking for homes one of the terms you will encounter is "comparables." This term refers to the comparison of homes with similar physical characteristics - numbers of bedrooms, baths and square feet of floor space for example. If you could compare two identical homes in terms of physical structure, then any differences in terms of asking price is usually due to factors that influence demand for that home - or price a buyer is willing to pay for the home.
Typical factors that could influence the demand for comparable homes include - school systems, neighborhood traffic patterns, and even the time of year a home is sold. The list is pretty short because everything else being equal, location is the key to demand.
Tip #2 - Timing Your Purchase
The best time of year to sell a home is in the April / May timeframe, especially in an area where there are lots of children. That's because many families simply do not want to move while school is still in session. In most areas of the country, the housing market starts to heat up just as the school year winds down. Many of these sellers hope to sell their homes over the summer months and move into their new homes before school starts up again in September.
Supply and Demand in the Housing Market
In certain parts of the country, the supply of homes hitting the market will overwhelm the demand for homes. When this happens, you have what is called a buyer's market. In a buyer's market, the buyer of a home has the advantage when negotiating. And this brings up a good tip.
How many times have you heard someone say that they "can't sell their home" because the market has slowed down? This is complete nonsense. If they were selling their home for $1, then there would be a long line of buyers beating down the door to grab that bargain. It's obvious that they are simply asking too much money for the home or it would sell quickly. Stated another way, at the price they are selling, there is no demand for the home.
Tip #3 - Home Pricing
When you're thinking about purchasing a home, you've got one advantage over the seller - you already know how much they want for the home. Your problem is that you need to figure out how much to offer the seller. When deciding on an offer price, there are three things you need to consider or analyze.
The first thing you should look at is homes that have recently sold in a similar price range. For example, if the seller is asking $500,000 for their home, then you need to take a look at homes that sold in the area for $500,000 to figure out if the asking price is reasonable.
Next you need to compare the overall condition of the home your thinking about buying and how this compares the general neighborhood. Keep in mind cosmetic repairs such as painting a room or carpeting is a relatively inexpensive fix. Problems such as cracked foundations, sunken floors or bowed ceilings can indicate structural problems with the home and that can mean expensive repair bills.
Finally, it's also important to consider the condition of two special rooms in the home - the kitchen and bathrooms. Because of the tile, cabinetry, appliances and fixtures, these are usually the most expensive rooms in the home to update.
Tip #4 - Negotiating with Sellers
The first thing that you should know is that when you're buying a home a home, that everything is negotiable. When you're buying a home, you're going to spend a lot of money. When that happens that usually means it's time to break out your negotiating skills.
Closing Costs
One of the more common negotiating points is around closing costs. It is often the case that the seller is willing to pay for all or a portion of the closing costs. At the closing of a home, the buyer is often expected to come up with thousands of dollars to pay for fees and other expenses associated with buying a home. Since the seller is usually in a better financial situation, the buyer often can negotiate with the seller to have them help pay for these expenses.
Offer Contingencies
Real estate transactions are complicated - to say the least. The seller may be buying a home; the buyer may be selling a home. If something goes wrong, you want to be able to get out of the deal without paying a penalty. Since there are usually several things that can go wrong, these are usually referred to as "contingencies."
One of the more common contingencies involves a buyer that is also selling their home. For example, if you are buying a new home and selling your old home, you might want to make the purchase of the new home contingent upon the sale of your old home - or you might wind up paying two mortgages at the same time.
If you're financing the home, the bank will usually make the purchase contingent upon a professional appraisal that values the home at, or more than, the proposed selling price. Other contingencies or negotiating points might be around the inspector's report on the condition of the home or payment of repairs.
Tip #4 - Buyer's Remorse
Last, but not least on our list of home buying tips is something referred to as buyer's remorse. Sometimes after we make a large purchase, we begin to question whether or not we really made the right choice. So our final tip has to do with buyer's remorse, or that feeling we get in the pit of our stomachs that we didn't get a good deal.
The best way to combat buyer's remorse is by doing your homework before you buy a home. We've got a complete series on Buying a Home that can help you prepare for the process. If you seek the advice of others and buy a home with your heart and your mind, then you can limit the amount of buyer's remorse you might feel afterwards.
Relieving Buyer's Remorse
Even if you've done your homework, you might still question your decision - this is pretty natural with such a big purchase. If your anxious about the decision, then here is an exercise you can go through to help relief some of the stress.
Take a blank piece of paper and fold it in half. On one side of the paper, write down all of the advantages, or pros, of buying the new home. On the other side of the paper, write down all of the disadvantages, or cons, of buying the home. By the time you're through with this exercise, you'll realize that you make the right choice and the anxiety will be gone.
About the Author - Home Buying Tips
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