Buying your first home

1. Buying your first home Tom and Ivy Davey Ruhl and Ruhl Realtors

2. Why buy a home? • Income tax advantages • Investment • Stability

3. Path to buying a home • Clean your credit report • Find a buyer's RE agent with whom you’re comfortable • Determine how much house you can afford • Secure financing and qualify for your mortgage

4. Path to buying a home (cont) • Be a tough negotiator • Be willing to walk away • Have the house inspected by a professional inspector • If inspection and financing are OK, don’t get cold feet

5. How to Home search • RE agent • On-line • FSBO • Classified • Word of mouth

6. Hints: • Buy a book on Home buying • Don't be in a rush • Know the best time to buy a home • Be comfortable with your RE agent, your mortgage person

7. Houses you may want to avoid: • Adjacent to shopping center • Adjacent to traffic • Houses with a flat roof (addition) • Most expensive house on the street • Next door to a renter • Noisy area (airport, industrial)

8. Houses to avoid (cont): • Crime area • Flood zone (check it out in the rain) • One bathroom • No neighborhood code enforcement • On a steep hill

9. Houses to avoid (cont): • Home hard to sell (2 bed, 1 bath vs. 3 bed, 2 bath or single car garage) • Tiny master bedroom or small closets • Close to landfill, water treatment, pig farm • Main road • Undesirable school district • (Hint: Talk to the neighbors)

10. Houses you may want to buy: • Least expensive house in upscale neighborhood • On a golf course (some love it, some don't) • End of the block or a cul de sac • Adjacent to land zoned residential, or forest preserve • Good schools

11. Houses to buy (cont): • Reasonably close to shopping, work, grocery store • No traffic or logistics getting in or out of your street • High ceilings, large kitchen, walk in closets (resale) • 2 car garage (3 is preferable) • Energy efficient

12. Negotiating tips: • Sellers agent wants to convince you house is worth the price • You and your agent want to convince them otherwise

13. Negotiating tricks and tactics: • "Do you really want to accept another offer from another buyer?" • "If the house is such a good deal, why hasn't it sold yet?" • The listing agent says, "This house appraised for $225,000." • So what? The value of the house is what you they buyer are willing to pay. • Nit pick • You are not going to pay for the seller's mistakes (maybe they paid too much.)

14. Making the offer: • Back it up with $1,000 earnest money check • Have your valid mortgage credit approval letter from your lender • Put in some "outs": • financing • termites • bad title • undisclosed liens • bad inspection

15. Home Financing Calculators • How much can I borrow? • How much will my mortgage payments be? • How much will my adjustable rate payments be? • Which is better: fixed or adjustable? • Should I pay points to lower the rate? • Which is better: 15- or 30-year loan term?

16. Home Financing Calculators(continued) • How much should I put down for a new home? • How much can I save in taxes? • What will my closing costs be? • Am I better off renting? • Am I better off refinancing?    • What home can I afford

17. Buying your first home (summary) • Clean your credit • Know how much you can afford: qualify • Take your time • Research (know what you want) • Get a good agent • Search the internet, have your agent look, check the classifieds

18. Buying your first home (summary continued) • Find your home • Make an informed offer • Home inspection • Enjoy your new home

19. Questions?