100 Real Estate Tips in 100 Days (Day 36)
When you finally find your perfect home you want to do everything in your power to get it. Pay attention to some basic rules so you don't end up sabotaging yourself. Here are just a few of the really big no-no's:
- DO NOT make any large purchases from the time you start the buying process until after the closing. Unless you are paying cash, the mortgage credit process takes a dim view of adding to or changing your debt structure. That means no credit card applications, no automobile purchases, no furniture purchases, and no writing large checks to pay for anything. Always speak to your mortgage loan officer about monies you feel you must spend. Life sometimes happens at inappropriate times, but do not change your financial situation without discussing it with your lender. Such changes many times lead to a mortgage loan denial.
- DO NOT commit to a mortgage loan based on the interest rate. The cost of obtaining the mortgage loan and the TOTAL monthly payment are more important than the interest rate. Loans with any type of escalating interest rates can destroy your housing happiness down the road.
- DO NOT buy without representation. That goes for new builder homes also. Representation means a contractual agreement between you and a licensed Realtor, where the Realtor is working exclusively for you. I am not going to get into the arguments about dual agency or transactional brokerage, or any one of twenty different names for all of the other types of real estate sales practiced in the United States. Consumers, whether buyer or seller, should have exclusive representation, or, at the very least, have a sophisticated understanding of the laws of agency in the state they are buying in with full disclosure of sales persons business practice. The laws differ greatly from state to state, so take the time to understand who is working for whom.
- DO NOT buy without conducting proper due diligence of the house and area. Have the house inspected by a general house inspector. If there are any doubts, pay the money for specific inspections for such things as HVAC systems, sewage systems, roof overlays, Radon gas, mold, or anything that may affect the value, live ability, or safety of a structure you plan to live in, or place your family in. If schools are an issue, visit the school. If fire protection is an issue, visit the local fire department. Knock on the doors of a few neighbors, be friendly, and ask about the neighborhood. It makes no difference how competent your Realtor is, you have a responsibility to perform due diligence for your peace of mind.
- DO NOT strip the equity by refinancing to take cash for other purposes. Too many people did that in the early part of the first decade of the new millennium, adding to the foreclosure grief in the late part of the same decade. The home you live in is a long term investment, not a big piggy bank or ATM machine. If you wish to invest in real estate, then buy real estate specifically for that purpose.
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About 100 Real Estate and Relocation Tips In 100 Days
This series of 100 tips in 100 days is a crash course in all the questions I've ever been asked about Denver, Colorado and purchasing a home here. If a move is in your future, you will find this series helpful, be sure to subscribe to the RSS feed or add the RSS to your Outlook, so as to not miss a post!
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