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Emil Ratti Northern, NJ
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Buyer Resources

 

Buying a Home in a Buyer's Market

When is the best time to buy a house? With many markets reporting an abundance of homes for sale, and interest rates remaining at near historic lows, now might be one of the best times in recent memory. While today's real estate market does offer advantages to buyers, consumers still need to be savvy in order to get the best deal they can.

Here are some tips that the professionals at Coldwell Banker Real Estate Corporation think every homebuyer should keep in mind:

Don't Try to Time the Market. When home prices are lower, it is very tempting for potential buyers to try to wait as long as possible in the hopes that prices will decline even further. This strategy can be detrimental because when there is high inventory, smart sellers price their homes properly – not according to past sales but according to current conditions – so their homes will sell in a timely fashion. Once a home is priced to what the current market will bear, buyers will make offers.

Shop Around. But Don't Wait Too Long. The National Association of REALTORS reports that, on average, homes stay on the market for 7.5 months. The increased inventory gives homebuyers a great opportunity to compare homes that meet their needs. However, this does not mean that homebuyers should procrastinate. If you find a house you love, put in your bid and negotiate. Don't provide an opportunity for another buyer to make an offer.

Watch Mortgage Rates. Studies such as the 2006 Coldwell Banker® Homeownership in America Index revealed that that majority of people move based on lifestyle changes such as new job, marriage, divorce or family expansion. Pay attention to the mortgage rates and recognize that buying a new house will likely result in a change in mortgage rates. How much? A monthly payment of a 30-year fixed 5.875 mortgage rate on a 300,000 loan is $1,774.61.

Negotiate on the Incentives.Sellers eager to move their homes may offer you a variety of incentives such as cars, trips, and even credit card bill payment. If you accept an incentive, make sure it makes sense for you. Instead of having your bills paid, you may opt to have the seller renovate the master bathroom or install new flooring. Of course, you can always ask the seller to simply deduct the amount in question from the list price.

Planning for Home Maintenance Costs

You don't think about future maintenance costs when buying a home, but you should. Whether buying an older home or a newly constructed home, equipment can be faulty and costly to repair. 

Usually a home's purchase price can be used to project maintenance costs. The recommendations for annual maintenance costs range from 1.5 to 4 percent of the home's original cost. While this is not always true, especially when the purchase price of a home is three-quarters of a million dollars, it is a good rule of thumb for the average home buyer. 

Since most home buyers are focusing on making the down payment and not saving for future repairs, a home warranty provides a good back-up plan. 

Most home warranties cost between $400-$800 and will cover many major home systems and built-in appliances for one full year after close. A home warranty will either pay to repair or replace a covered item and the homeowner pays a minimal deductible rather than the full cost of repairs. It's an easy way to manage your home's finances and plan for those unexpected repairs. 

To learn more about managing home maintenance costs with the Coldwell Banker® Home Protection Plan, call 1-866-797-4788.

Why Do I Need A Home Inspection

The purchase of a home is one of the biggest investments people will make in their lifetimes. But it is also among the greatest sources of anxiety. A home inspection helps ensure homebuyers of the quality of their investment by making them aware of its condition and alerting them to any concerns. This can serve to relieve stress, increase confidence and even reduce the threat of legal action in the future. 

Some of the benefits of a home inspection are: 

  • Knowledge: Understanding exactly what you're buying - old or new
     
  • Peace of mind: Helps in making a sound buying decision
     
  • Savings: The home inspection reveals the need for repairs or replacements before you buy
     
  • Fewer surprises: The home inspection limits the number of problems you may discover after you move in
     
  • Education: A good home inspection also gives you invaluable details about your new home in addition to information about the condition of the property. You'll learn where the main shutoff valves to the utilities are located, how the house operates and more!
     

How do I find a good home inspector?

Not all inspection companies are alike, and selecting the wrong company could cost you thousands of dollars in repair and replacement costs. Consider the following when shopping for home inspection companies. 

  • Experience: How much experience do the inspectors have and how long have they have been in the business? The best home inspectors have been in business for years and have seen thousands of homes.
     
  • Home Inspection Training: Have the inspectors gone through any extensive home inspection training? In many states inspectors can simply call themselves home inspectors without any training or licensing.
     
  • Association Membership: Is the inspector a member of a professional home inspection organization? Companies that are affiliated with professional organizations are serious about what they do, and know about all the new developments in their fields. Some well-known trade associations are: American Society of Home Inspectors (ASHI) and National Association of Home Inspectors (NAHI). Inspectors in your area can be located through these associations.
     
  • Liability Insurance: Does the inspector carry Professional Liability Insurance (Errors and Omissions Insurance)? If you ever need to collect on a legal judgment, an inspector without insurance my not be able to pay your claim. 
     

What if I'm buying a newly constructed home?
An inspection on a new home is important for the buyer to level the playing field. As in any industry there are shortcuts and tricks of the trade in the construction business, and someone who is unfamiliar with them can easily miss them. A home inspector is better able to see nuances that may not be readily visible to an untrained eye. You also need an inspector to offset the builder's or contractor's interest. Much of the information about homes is either taken for granted by people, or remains unfound. 

For newly constructed homes, an inspection of the house before the drywall is installed, otherwise known as a "preclosure inspection", provides a level of quality assurance for the buyer that many builders don't usually provide for their contractors. This inspection gives you a better chance of identifying and correcting potential problems when they are much easier and less expensive to fix, before they become physically or financially prohibitive. For example, this inspection may prevent the need for moving a wall so that kitchen cabinets don't protrude into a doorway opening, or moving electrical receptacles so they are placed where you need them 

U.S. Inspect, America's leading national home inspection company and part of the Coldwell Banker Concierge® Service Program, has been in business since 1986 and has over one million inspections of experience–by far the largest number in the industry. Each inspector is put through a rigorous in-field and classroom schedule that can take up to 3 months to complete, including technical, communication, and interpersonal skills. All inspectors are affiliated with ASHI, or an equivalent trade organization and their inspections meet or exceed the standards of practice recommended by those associations. The company carries full E&O coverage. 

If you would like more information, or would like to order a home inspection, please call (888) US-INSPECT, or visit their Web site at www.usinspect.com. 

*This material is provided by US Inspect; it does not express the views of Coldwell Banker Real Estate Corporation.

Finding the Right Home

Your Coldwell Banker® Sales Associate can provide detailed information on almost any property currently listed for sale, whether it is listed by a Coldwell Banker® Affiliate or another real estate company.

If you see a "For Sale" sign or an ad in the newspaper that interests you, we have access to all the
data. So call your local Coldwell Banker® Sales Associate for all the details: 

  • The listing price
     
  • The description
     
  • The special features
     
  • The financing terms
     

If your property is currently listed with a real estate broker, please disregard. It is not our intention to solicit the offerings of other real estate brokers. We are happy to work with them and cooperate fully.

Tips for First-Time Homebuyers

Like any other life changing experience, buying a home for the first time can seem like an incredible challenge. However, once first-time homebuyers are able to organize their priorities, conduct some useful research and interact with a trusted real estate agent, confusion can quickly turn into excitement. Keeping in mind some of the basic tips outlined below can help pave the way to a successful first-time home buying experience.

Prior to researching the real estate market and hunting for mortgages, you will need to analyze your family's goals and priorities. Take some time to reflect and determine if it is the right time to purchase your first home. You may also want to ask yourself where you want to be in the next few years and consider how purchasing a home for the first time fits into your family's long-term goals.

Once you determine you are ready to purchase your first home, you may want to research the details of the home buying process. Though you may not understand everything you read, any insight you gain will help you avoid unwanted headaches further along in the process.

The next important step in the home buying process may seem obvious but is often overlooked during the excitement of purchasing a first home. Very simply, as a first-time home buyer, you need to determine what you can afford. Too often, first-time home buyers underestimate or simply miscalculate the costs of owning a home. Before searching for your first home, ask yourself if your income is both adequate and reliable enough to afford mortgage payments.

There are also upfront costs to consider when buying a home. Though the amount required to cover a down payment and possible closing costs will vary, there are usually some out of pocket expenses to incur when closing on your first home. Being prepared for these expenses, as well as any unexpected costs that occur after you have moved in will help your transition into home ownership.

After determining what your family can comfortably afford, you should start shopping around – for both homes and mortgages. By this time, you should have a good idea of what types of amenities you are looking for in a first home and what neighborhoods best match your family's needs. As your search advances, you may want to attend some open houses in your neighborhoods of interest. Even if you don't find the perfect home right away, being active in the market will give you a better chance of finding the best fit for your family.

While looking at homes, you may also want to see what types of mortgages are available to your family. If you are able to determine what rates you qualify for and estimate your mortgage payment before actively bidding on a home, you can narrow down your price range and make a confident offer when the time comes. 

Though following the previous steps can help a first-time home buyer find the right home, buyers never need to go it alone. After conducting your own research, it is a good idea to find an agent you can trust. Besides being able to assist you when searching for the right home, a reliable real estate agent can help guide you through the home buying process.

If you are patient with the home buying process and do your homework before purchasing your first home, your diligence will most likely lead you to the perfect home for your family.

Questions to Ask a Seller When Considering an Offer

The process leading up to making an offer on a home can be a daunting. After you've found the right home, you will still need to assess various factors that can impact both the details of your offer and the seller's willingness to work with you. If you are considering making an offer on a home, you may want to start by getting some information about the seller and their history with the home. The first question to consider is:

Why are you selling?

In some sense, what you are really asking is: "how motivated are you to sell your home?" Assessing the type of answer you receive to the initial question may help you structure a potential offer. For instance, if the homeowner has already purchased another property or the family is trying to relocate, you might be dealing with a flexible seller. Gaining some insight into the seller's motivation will help you determine not only how motivated they are to sell but also how they might assess your offer.

Another question that can help you understand how the seller might view your offer is:

How much did you pay for your home?

Though this might seem like privileged information, such statistics are actually public record. Generally speaking, the seller who purchased their home for a low price and built up equity in the property over several years may be more flexible when approached with offers. On the other hand, homeowners who haven't seen such an increase in their home's value might be more reluctant to lower their asking price.

After gaining an understanding of how the seller might treat a potential offer, you may want to ask questions about the upkeep of the home and the quality of the surrounding neighborhood. Beginning with the quality of the property itself, you will certainly want to inquire:

What types of repairs have been done recently?

You may want to start by asking the homeowner about your specific concerns. Homeowners will always be happy to tell you about upgrades that have been made to the home, but you may want to pay attention to what isn't mentioned. It is important to ask because you will be able to tell if a kitchen or bathroom was remodeled after viewing the home or consulting the disclosure document, but you might miss some smaller issues that could impact the details of your offer.

To further protect yourself against surprise renovation costs in a new home, you may want to verify the age and working condition of all major appliances. If possible, check the service records of important appliances (furnaces, water heaters, etc.) as these often serve as markers of a home's overall upkeep. You can also try securing a monthly estimate of utility costs; these statistics will not only help you estimate future costs but could potentially highlight unhealthy energy consumption within the home's infrastructure.

Lastly, regarding the surrounding neighborhood, try to open the conversation about the area by asking:

What can you tell me about the neighborhood?

Allow the seller to tell you the good and the bad. By asking the seller for their overall impressions of the neighborhood, you will probably learn things about the area that a more specific question might not have yielded. Follow up the seller's initial response with questions that are important to you and your family. Based on your needs, you could ask questions like the following: Is there any new construction planned in the neighborhood? What are your thoughts about the nearest schools? Are any businesses or schools scheduled to close? How would you describe the neighbors?

The research you conduct with your agent prior to making an offer is one of the best ways to ensure that your family finds the right home for the right price. As you approach the offer stage, remember that you are not alone and can work closely with your agent to learn as much as possible about the property and the details of the buying process. Furthermore, you shouldn't be afraid to ask for help if you have questions or concerns about a potential offer. Though the process of making an offer on a property may seem stressful, your diligence will pay off when you finally find a house to call home.