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For Your Clients – Fully Grasping the Keys to a Dream Home

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By Mary Beth Breckenridge and Betty Lin-Fisher

RISMEDIA, June 7, 2008-(MCT)-You’ve done your homework. You’ve got your finances in order and have been pre-approved for a mortgage. Now comes the fun part: finding your new home.

Here’s what’s involved:

The Preliminaries

A house isn’t just a building. It’s the center of your life.

That’s why shopping for a home is such a subjective experience. You want one that not only fits your family’s needs and budget, but also nurtures your soul.

But you don’t want emotion to trump good sense, either. So it’s a good idea to figure out your priorities in advance. Use them as a sort of checklist to judge the suitability of the houses you like, so you don’t get swept away by gorgeous granite countertops and forget that the house you’re considering doesn’t have enough bedrooms.

You might start by listing your needs and wants, said Susan O’Neal, president of the Akron Area Board of Realtors and an agent with Howard Hanna Smythe Cramer’s office in Green. There’s a difference: Needs are features you must have to be able to function in the house and neighborhood; wants are things you’d like but could sacrifice.

Consider the basics: the number of bedrooms and bathrooms you need, the number and size of cars that must fit into the garage, whether you need lots of storage space or a room for big family gatherings. Do you want a one-story layout? A first-floor laundry room or master suite? An attached garage?

Think about the yard. Maybe you need space for children to play or dogs to run. Ask yourself whether you have the time or desire to maintain manicured flower gardens or acres of grass. Determine how important a good view or privacy is to you.

You might even measure your furniture to make sure it will fit in a room or up the stairs.
The possibilities are many, so it’s impossible to provide a complete checklist. But think about what you like about your current living situation, what drives you crazy and what you admire in other people’s homes. And if the size of your family is likely to change, don’t forget to factor that in.

The Reality Check

There’s a reason for the term “starter home.” It’s rare for first-time buyers to have the money-or the luck-to be able to get everything they want in their first house.

“You need to recognize you may not be able to get your dream home (with) your first home purchase,” said Toya Kelker, a housing counselor with East Akron Neighborhood Development Corp.’s Center for Homeownership.

A little expectation readjustment might be in order. You want to make sure your home fits your needs, but you might need to put off some of the wants until you have the money to add on or move up.

An option is to buy a house that’s below your price target and then spend the difference on fixing it up. “You can always fix anything if the price is reasonable enough,” O’Neal said.

Remember that most decorative elements are fairly easy to change, said Carla Herbert, president of Harvest Home Realty in Munroe Falls, Ohio. Hard as it is, try to see past the flocked wallpaper and concentrate instead on the more important issues, such as the livability of the home’s layout and the size of the rooms.

But be realistic, O’Neal cautioned. Most first-time buyers don’t have money or skills to take on big projects upfront, so be careful about taking on more work than you can handle.

Some loan programs let you include money for home repairs in your mortgage. But the amount you can borrow is equal to your equity in the house, and for a first-time buyer, that can be a fairly small amount, said Jeff Mills, a community development officer with KeyBank.

The Considerations

When you find a house you like, it’s tempting to want to jump right on it. But be sure to check out the neighborhood and know what you’re investing in, experts advise.

By law in many states, the seller must provide a residential property disclosure form, which points out known defects, and a lead-based paint disclosure form. Their absence should be a red flag, said Rachel Torchia, president of Gateway Title Agency in Brecksville, Ohio. It signals that the seller-probably someone who’s selling the house without a real estate agent’s involvement-doesn’t know what he or she is doing.

Be sure to check out the vicinity, as well, O’Neal recommended. Look for anything that might be noisy or bothersome, such as a highway, train tracks or an airport landing pattern, she said. If the house is on a busy street, ask yourself whether you’ll mind the noise, traffic and potential danger to children.

Take a drive to discover what’s on all sides of the property you’re considering. O’Neal recalled with a laugh how she bought a house with a beautiful backyard some years ago, “and when all the leaves fell off the trees, I realized there was an apartment building that was, like, eight stories high behind me.”

Remember that you’re not just choosing a home; you’re choosing a neighborhood. If possible, the Fair Housing Contact Service in Akron recommends you spend an hour or two there getting a feel for the area. Just parking on the street and observing can tell you a lot, it says.

You might call the local planning or police department to ask whether the neighborhood has a community group that plans activities such as block parties or crime watches. The local recreation department and school should be able to tell you about such opportunities as sports teams and after-school activities. If your household has an older member, look for a senior center or group in the area.

Consider the distance from work or family and access to public transportation. And check out the neighborhood’s proximity to the businesses and services you use often: grocery stores, dry cleaners, gas stations, recreational facilities, doctors, schools, your house of worship and so on.

The Offer

When you’ve decided on a house, it’s time to make an offer.

That’s both an art and a science that involves balancing the home’s value against your emotions about the place.

Before you make an offer, you need to get a picture of what the house is worth. If you’re working with an agent, he or she can help you with this step, but what you’re willing to pay is up to you.

Common practice used to dictate looking at what comparable houses in the neighborhood have sold for in the last two or three years, but that’s changed as housing values have dropped, O’Neal said. Now she looks at comparable houses for sale in the area and compares the amenities to determine whether the house is really worth the price being asked.

As a buyer, you’ll probably have a feel for that if you’ve looked at a number of houses, O’Neal said.

Then comes the emotional aspect. If this house is absolutely, positively the perfect house for you-if your heart will be broken if you don’t get it-then you might be willing to pay more to boost your chances of getting it, she said.

On the other hand, if you’re not so emotionally tied to the house, you can try making a lower offer to see whether the sellers will bite. In the current market, some home sellers are willing to take lower offers than they would have otherwise, said Herbert of Harvest Home Realty.

Her philosophy is it doesn’t hurt to ask. But Jim Camp thinks otherwise.

Camp, a partner and general manager with Cutler Real Estate, urges buyers to be realistic.

“We have some people who are bottom feeders or low-balling the offer $20,000 less, which is ridiculous,” he said. “All it does is irritate the seller, and they’re never going to accept that type of offer.”

A typical offer, he said, would be more in the range of 3 to 5 percent below the asking price.

The Paperwork

Once you’ve settled on an amount to offer, you write up a purchase agreement. It’s a document that spells out how much you’re offering and under what terms. Agents usually use a standard form, or you can buy one from an office-supply store.

The purchase agreement needs to spell out all the particulars of the deal-for example, which appliances will stay in the house; whether inspections will be done, and by what date; whether a home warranty will be purchased, and who will pay for it. This is the point in the negotiations when you ask for what you want, with the understanding that the seller may or may not agree to your terms.

The signed agreement is then presented to the seller-by yourself, your agent or your lawyer. Unless the seller rejects your offer outright, you can usually expect some back and forth before you reach agreement, Camp said.
Once the offer is accepted, you need to make a formal loan application within five days, even if you’ve been pre-approved, O’Neal said. You usually have 14 to 30 days to get formal loan approval, after which you can close on your house if all the other terms of the agreement have been satisfied.

© 2008, Akron Beacon Journal (Akron, Ohio).
Distributed by McClatchy-Tribune Information Services.

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