Many people harbor secrets fears about buying a home, and some of those fears are justified. Not everybody is cut out to own a home, and if you're one of those people, it's better to find this out now than when you're under contract.

• Renting vs. Buying.
  You might decide that renting is better for you than buying, because buying a home has its drawbacks.

   

• Reasons to Buy.
  On the other side of the coin, there are many more benefits to buying. Keep these reasons in mind if you start to get cold feet.

   

• Should You Buy a Home Before Getting Married?
  Tips for home buying with a partner or significant other before tying the knot, plus how to handle the financial details of homeownership without plans to ever marry.

Before Buying a Home, Get Your Finances In Order

Line up your financing, set aside a down payment and study the loan programs available. By doing your homework, you will know exactly how much you can pay and what it will cost you.

• Order a Free Credit Report.
  Give yourself time to clean up a credit report that contains mistakes. Dispute errors. Try to reduce your monthly debt obligations now by paying down those loan balances.

   

• Find a Lender.
  Check out places to get a mortgage and compare rates and fees. Start with your own financial institution, then interview a few mortgage brokers and choose a loan product you completely understand.

   

• Determine a Down Payment.
  The more you put down, the lower your monthly mortgage payment. Here are 12 places to find a down payment.

   

• Consider FHA Loans.
  FHA loans carry competitive interest rates, come with minimum down payment requirements and allow sellers to pay some or all of your closing costs.

   

• Get a Preapproval Letter.
  Showing the seller you are already preapproved for a loan gives you an edge during offer negotiation.

Pick a Real Estate Agent to Help With Buying a Home

With so much information available online, you might wonder why you need an agent at all. But all local markets vary from one another, and a good agent can guide you by giving you information based on experience and market knowledge.

• Why Hire an Agent?.
  An agent with experience can help you to avoid making mistakes such as choosing the wrong home or offering too much.

   

• Find a Real Estate Agent.
  Start by asking your friends and family member for referrals. Make sure you are comfortable with your agent before committing to work with that person.

   

• Follow Protocol for Working with Agents.
  Here are 10 tips to prevent you from messing up or saying the wrong thing to an agent.

Learn How to Avoid Home Buying Mistakes

The best way to avoid making a mistake it to learn from the mistakes others have made. Buying a home in a desirable location is your best defense. Remember: location, location, location.

• First-Time Home Buyer Tips.
  Start your search online, and don't rely on print because most homes are not advertised in the newspaper.

   

• Preview Homes for Sale.
  Ask your agent to look at homes before showing them to you, and tour only those that fit your parameters.

   

• Avoid the Top 3 Home Buying Blunders.
  Protect your earnest money deposit by writing contingencies into your contract. Here's how to make sure you buy the right home.

Make an Offer and Negotiate Like a Pro

Although buying a home is not like buying a car, for example, you can still negotiate to get a good price.

• Top Three Top Negotiation Tips.
  Price isn't the only consideration. Sellers often accept lower-priced offers for other considerations.

   

• Facing Multiple Offers.
  If you really love the home, chances are another buyer will want it as well. Here's how to win your offer.

   

• Dealing with Counter Offers.
  It's common for sellers and buyers to negotiate back and forth through counter offers.

Get a Home Inspection and Read Disclosures

Never buy a home without getting a home inspection. Most states have laws about the types of disclosures you are entitled to receive.

• What a Home Inspection Covers.
  Go through this list and make sure your home inspector doesn't miss anything crucial.

   

• Material Facts.
  Besides disclosing lead-based paint, which any home built before 1978 can contain, sellers should notify you of major defects.

   

• Do a Final Walk-Through.
  Always do a final inspection a few days before closing to make sure the property is in the same condition as when you agreed to buy it.

Closing on Your Home

Transactions generally close within 30 to 60 days after your offer has been accepted. Remember to reserve movers or a moving truck early because many people move at the end of the month.

• Home Insurance.
  Shop for insurance rates carefully. Often, the company that insures your automobiles may offer you the best policy rates.

   

• Title Insurance Policy.
  You might think you don't need a title policy, but it's the cheapest form of insurance you can buy, and you pay the premium only once.

   

• Home Buying Closing Process.
  This covers every step of the home closing process, from the beginning to the end.

Tips for buying foreclosures

If you're wondering how you can make your offer shine above all the rest and be the winning offer, here are a few tips to help you select the right price and terms:

1) Get the Property History

Ask your buyer's agent to find out the bank's purchase price on the Trustee's Deed or Sheriff's Deed. Generally, it is noted on the document itself, which you can get from the tax rolls or a title company. Compare that price to the price the bank is asking.

Look at the amount of loans that were once secured to the property. Somewhere between the original mortgage balance(s) and the foreclosure sale price is the amount the bank will accept, if the home is under-priced.

2) Determine Comparable Sales

In many cases, the list price has little bearing on the value of the home. The market value carries the most weight. If you are up against competing offers, other buyers will offer more than list price.

• Look at the last three months of comparable sales, a mini CMA, for that neighborhood to determine how much this REO is worth. Try to use only those homes that most closely match the REO regarding square footage, number of bedrooms, baths, amenities and condition.

   

• Look at the pending sales. Ask your agent to call the listing agents of those pending sales to try to find out the accepted offer price. Some will share that information and some will not.

   

• Look at the active listings. Those are most likely the listings other buyers will use to formulate a price because they are the only homes those buyers actually tour.

3) Analyze Listing Agent's REO Solds

Most REO agents work for one or two banks. Some listing agents are exclusive listing agents for REOs, and they do not list any other type of property. Since REO agents deal in volume, they typically apply the same pricing principles to all their REO listings.

• Ask your buyer's agent to look up the listing agent in MLS.

   

• Run a search using that listing agent's name to find the last three to six months of that agent's listings.

   

• Pull the history of those listings to determine the list-price to sales-price ratio. If most of those listings are selling for, say, 5% over list price, then you may need to offer 6% over list price, and vice versa.

4) Ask About Number of Offers

If there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.

If there are 20 offers, bear in mind that some of those offers might be all cash. Banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to be considered.

5) Submit Preapproval Letter

It goes without saying that you do not want a prequal letter. You want a preapproval letter. Get preapproved from your choice of lender in advance.

Moreover, get preapproved by the lender who owns the property. Do not expect to use this lender for your loan, but submit the prepproval letter from this lender, along with the letter from your own lender. Banks don't trust other lender preapprovals but trust their own departments.

6) Don't Ask for Repairs / Inspections

Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted.

7) Shorten the Inspection Period

If other buyers ask for 17 days, for example, to conduct inspections, and you ask for 10, you will be deemed the more serious buyer.

8) Offer to Split Fees

Some banks will not pay transfer fees, for example. If the buyer offers to split those fees, the bank will feel more amenable to accepting the offer. Same thing for escrow fees.

Many banks negotiate discount fees for title insurance. If the bank will pay for the owner's policy, the ALTA policy might cost a bit more. But it's still a good idea to let the bank choose title if you want your offer accepted.

Consider the Appraisal Consequences

If you offer over list price, bear in mind that the appraisal will need to substantiate that price. If you find yourself dealing with a low appraisal, you have options, so don't despair. Remember, the bank will most likely run into this problem with the next buyer who obtains financing.

5 Important Steps Before Selling

Buying a New Home