Things to consider when buying a home

Congratulations on your decision to become a homeowner. Buying a home for most people is the most important investment decision they will ever make. Having a little knowledge of how the real estate buying process works can give you the confidence you need to make good real estate decisions for you and your family. This short article is intended to give you a brief overview of how to best work with real estate agents and mortgage brokers so you get the best deal possible on your home purchase.

Over 80% of home buyers begin their home search online. The Internet will provide you with just about every home for sale in your area including...

• Homes listed in the local MLS along with multiple property photos and virtual tours

• For Sale By Owners (FSBO's) websites contains homes for sale not listed with a real estate broker

• New home builders in your area with floor plans and models for you to look over

Get online and start searching for homes in your area that match your criteria. Get a solid idea of the market values in the neighborhoods and subdivisions you wish to live. The more familiar you are about market values in your town, the better idea you will have regarding areas you can reasonably afford.

The next step after you get a grip on market values is to locate a Realtor in the local area. Not all Realtors are made equally! Find an agent who seems most qualified and knowledgable about the area of town you plan on buying. Make sure the Realtor you choose is a people person. If you do not get along with your Realtor, most likely no one else in the transaction will either and it could cost you.

Some people are scared to death when it comes to dealing with salespeople. They would rather just talk directly to the seller's Realtor than finding a Realtor to work for them as a buyer's agent.. This is probably one of the most common mistakes home buyers make. When you purchase a home through a listing agent, that agent represents the seller and owes all loyalty to the seller. They can merely work "with" you, not "for" you. The commission paid to the listing agent has already been negotiated by the seller and listing agent. You will not get a discount! Most likely you will end up paying the price the listing agent tells you to pay!

Having a buyer's agent, commonly referred to as buyer representation, costs the home buyer nothing! When the buyer secures buyer representation, the listing agent typically offers half of the negotiated commission, per listing agreement, to buyer's agent. A buyer's agent can offer many services to their "buyer clients" that a listing agent will not offer including:

• Unbiased opinion on market value of property. Most seller's agent will cherry pick the recent comparable sales in order to make the property look much more attractive.

• Historic information about the property including "true" days on market, price changes, etc.

• Advice and opinions about the list price, property condition, and market conditions. A seller's agent can only offer you facts and must disclose any known material defects. They can not offer you opinions or advice!

Real estate finance can be very confusing. With no strict government regulations, the mortgage industry has thousands of lenders quoting prospective borrowers a wide range of interest rates. Two words that you MUST remember when selecting a home loan is: SHOP AROUND!!! You may have heard that pulling your credit report numerous times will hurt your credit scores. While this is true, an exception to the rule is pulling multiple reports while applying for a mortgage loan within a 2 week period will be treated as one inquiry. Talk to a few mortgage brokers, and your bank or credit union. Your goal is to find a mortgage with the best interest rate and best loan terms. Look for low mortgage fees or no mortgage fees. The fees your broker is charging you will show on the Truth-in-Lending disclosures the lender provides, as required by federal law. Fees such as processing fee, underwriting fee, and warehousing fee are also called "junk fees" and are negotiable. Most brokers also charge a 1-2% loan origination fee (also negotiable). Shop around and secure the best financing currently available. Your lender will provide you and your Realtor a pre-approval letter.

*Just because you get a pre-approval letter does not tie you to that lender or broker. You are still free to shop around during the home buying process until you sign your loan papers at closing.

Now you have free buyer's representation, a pre-approval offer on a fantastic loan and are knowledgeable about market values in the area you plan to buy. With all your preparation you are now ready to view homes and make an offer on any great deals you see out there in your marketplace!