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People go into buying a home or other property thinking it can't be that complicated. First-time home buyers are especially vulnerable to this mindset: Caught up in the excitement of owning their own home, they often fail to do the research required to protect their own interests.
Most people are just trying to complete a real estate transaction—to sell a house. But they do it with their own best interests in mind, so it is important that you go into real estate transactions prepared to protect your own interests. You should know the steps you will walk through, what your obligations as a buyer will be, and what the words that different people will throw at you mean.
Here is a step-by-step guide:
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Know your credit rating. You do not want to be informed of your rating by a banker only willing to offer you a loan on his terms. If your rating is low or your credit is not ideal, be prepared to show how it will be improved in the coming months and years. Also be prepared to pay higher interest until your credit is repaired.
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Ask questions about the house. A real estate agent is obliged to answer honestly. Ask to see the written inspection reports. Ask about the age of the pipes and wiring and the condition of the roof and foundation. Talk to the neighbors and find out what is best and worst about the neighborhood. Do not let anyone make you feel embarrassed about asking questions; remember, you are the only one who will protect your interests.
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Choose a short list, not a "dream home." Have a list of three or four homes that you would be willing to buy if everything worked out. If you are not willing to walk away from a home, the sellers and agents have all the power in the real estate transaction and you have none. Do not feel sorry for the seller; remember, they are trying to get all they can from you. And even though you may be structuring a win-win offer, remember to protect your own interests.
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Drive the distances. Will you be commuting to work? Get in your car and make the trip—will you be able to do that every day? What about bad weather? Are there parks or walking trails? Grocery stores or malls? Where are the schools?—Put the kids in the car and drive to the elementary school, middle school, and high school to find out. Are the hospitals accessible? How long does it take to get to the emergency room? Remember, if you buy this house, you have to live there, so you want to make sure your bases are covered.
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