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- Buying a Home
- First Time Home Buying
- Buy vs. Rent
- The Buying Process
- Mortgage Calculator
- Community Information
- Working with a REALTOR
- Getting Pre-qualified for a Loan
- Finding a Home
- Making an Offer
- Understanding Mortgages
- Choosing a Lender
- Home Inspections
- The Appraisal
- The Survey
- Title Insurance
- Homeowner's Insurance
- Property Taxes
- Closing Successfully
Finding a Home
Above all else, the quest for your first home should be extremely exciting and a lot of fun. At the same time, however, it may be a little intimidating, especially in the struggle to narrow your search. With all of the homes on the market, how do you find the one that's right for you?
Defining the Decision-Makers
If you're single, this step is easy; you will undoubtedly seek advice and counsel from friends and/or family members, but ultimately the decision will be yours.
For couples, however, it may help to discuss ahead of time how you will resolve the differences that will inevitably surface throughout the home-buying process. Clarify your expectations: every home he's ever lived in has had a workshop in the garage, and the cars have been kept outside; of course, this home will have an attached garage/workshop. She's tired of traipsing in and out of the cold to unload groceries and can't wait to have a garage for the car - and a formal dining room for entertaining.
If children are involved, the process becomes even more complicated. They will have definite opinions about what they want in a home, and their priorities are unlikely to line up with yours. You may want to leave them out of the initial phases of the search and wait to show them the last two or three homes you are considering. This way, they can have input without bogging down the process.
Determining What You Need
By this point, you should have some idea of what you can afford to spend on a home. With that in mind, you need to begin thinking about what you want and then setting some priorities. Ask yourself questions such as:
- What type of home is most appealing to you: ranch, split-level, contemporary, two-story, etc.?
- Which construction do you prefer: brick, vinyl siding, wood siding, stone, stucco, etc.?
- What kinds of activities will take place in your home on a regular basis? If one of you is a student, for example, you will need to have a quiet study area somewhere in your home. If you plan to do a lot of casual entertaining, a rec room may be important.
- How are those activities likely to change with time? How will your needs be different when the student graduates, for example?
- How long do you plan to stay in this home? Does it need to be adaptable as kids grow and needs change, or do you plan to move in five years so that flexibility is less important?
- What kind of ambiance do you want in your home? Bright and sunny? Intimate and cozy? Formal? Informal?
- How many bedrooms will you need? Bathrooms?
- Do you want a master suite?
- Do you want a separate dining room?
- Do you need a basement?
- Do you prefer a large or small lot?
- Is it important to have a garage? Does the garage need to be attached?
- Do you want a fireplace?
- How much square footage do you need?
- Do you need a fenced yard?
- Do you need to be near public transportation?
Once you've defined some of your expectations and desires, you can begin to prioritize them. Which items are negotiable and which aren't? How much flexibility do you have?
You'll also need to decide if you want to buy an existing home or build a new one. If you decide to buy, do you prefer an older home or a new one? And how, for that matter, do you define "old" and "new"? Talk with your REALTOR® about the advantages and disadvantages of each given your lifestyle.
If you decide to build, you will have two options: work with a production builder and choose from pre-determined floor plans or start from scratch and build a custom home. In either case, you will want to thoroughly investigate the builders you are considering. Be sure to look at other homes they've built, and talk with your REALTOR® for recommendations.
Building a custom home can be an arduous process. Potential pitfalls abound from zoning problems to weather delays. If you decide to build, commit yourself to:
- Do the research necessary to know what you want before you begin the process. Don't pay an architect or draughtsman to draw plans for your house until he or she has walked the property with you, studied a survey with setback lines, and reviewed any neighborhood covenants and restrictions.
- Seek out and listen to expert advice. Be particularly careful about arranging payment for the builder so that he or she has incentive to finish your home in a timely manner.
Your REALTOR® can be an invaluable asset through this process.
Deciding Where to Buy
You may have heard that location is everything in real estate. For a homebuyer, location is very subjective; as with deciding what to buy, deciding where to buy is a matter of determining priorities. Is it important to you to be close to your work, your church, your extended family, or a particular school? Do you want to be near a recreational area? These factors will determine the area of town in which you choose to settle.
Ideally, you'll be able to find somewhere that meets these criteria and where property values are rising and zoning laws preserve the integrity of your neighborhood.
When you find a neighborhood you think you might want to live in, you'll need to do some research. Drive through during the day to check out the condition of the homes and infrastructure. Are lawns, homes, and streets well maintained? Are there any parks nearby? Are they well kept? Drive through after a rain. Do streets and lawns drain well? Drive through at night. Do the lights work, and are the streets well lit? Walk through some stores in the area. Do the people there seem like neighbors you would enjoy? Visit the local police station to find out about crime rates and the schools to assess their quality and desirability. Find out if property values have risen, declined or stayed the same over the last five years. Your REALTOR® can be a valuable resource in this part of the process. As you investigate the neighborhood, you'll also want to check out nearby neighborhoods; their condition may be a harbinger of things to come.
The bottom line is that you don't want to buy in an area where property values are declining. Signals that an area is on the decline include:
- An unusual number of unoccupied homes or homes for sale
- Single family homes being converted into multiple-family units
- Poorly maintained homes and infrastructure
- Increased crime often signaled by burglar bars over windows and doors, by vandalism and by graffiti
- Empty retail space
Before you buy in a new subdivision, you need to know something about the developer and the housing market in the area. Although you can't predict how the area will develop or who your neighbors will be, if you know that the developer is reputable and the demand for homes is high, you can be reasonably sure that the lots will sell quickly to a fairly economically homogenous group of people. If demand drops off, however, the developer may compromise his standards and build smaller homes or lower his profit margin to attract less qualified buyers.
The Search Process
You will probably use several resources in your search for the right home. These may include friends, the internet, community newspapers, "catalogs" from local real estate companies, and most importantly, your real estate agent.
Career counselors will tell you that networking, talking with as many people as you can about your career goals, is an important step in any job search. It's also a good idea in your search for the right home. Talk with your friends about what they like and don't like about living in the area they're in. If their neighborhood interests you, ask them to let you know when they hear of houses coming on the market. In a hot housing market, timing can be everything. If you can get into a home before the sign goes up in the yard, you've got an obvious advantage.
The internet is an invaluable resource for homebuyers. Estimates are that anywhere from 30-50 percent of potential homebuyers will search the internet for homes before contacting a real estate agent. Searching the internet allows consumers to educate themselves about what's on the market, and how much they can expect to pay for it, at any hour of the day or night, without leaving their homes and without having to work around anyone else's schedule.
Spend some time doing what you're doing now. By visiting our Search For A Home page, you can view all of the homes listed in the Broker's Listing Cooperative (BLC) in the Indianapolis area.
(The BLC is a cooperative effort between the real estate brokerages in a community. When an agent lists a home, he/she provides information about the listing to the organization that oversees the BLC. That organization, in turn, makes the information available to the other real estate agents in the area.)
Perhaps one of the easiest ways to look for a new home is to set up an account through MyTucker. MyTucker allows you to specify a few parameters (e.g., number of bedrooms/bathrooms, price, etc.) for homes that are of interest to you. When a home that meets your parameters is listed in the BLC, you will automatically be notified via email. If you find a home that appeals to you, you can drive by for a better look at the home and the neighborhood it's in. If you're still interested, you can arrange a showing.
Be sure to include your REALTOR®'s name when you register, so that he/she will also be notified. If you're not already working with an agent, MyTucker will assign a Tucker agent to follow up with you in a few days. He/she will be able to answer any of your questions and arrange showings for any of the homes you want to see. There is no cost for this service.
Weekends are the most popular time for real estate ads since that's when most people have time to look. Pick up a weekend edition of the paper in your area and look through the ads. If you're looking in a large metropolitan area, you might be well advised to look in a smaller, community paper rather than the large city-wide publication; advertising costs will be lower in the smaller papers and more agents will have access to them.
It may take a little time to adjust to the language and abbreviations of real estate ads. Again, your real estate agent can help with this.
Weekend papers will also have ads for open houses. This is a great way to educate yourself about what's available in your area and what you'll have to pay for it. Even if a home doesn't exactly meet the criteria you have established, you might want to visit the open house as a way of double checking your expectations. If you're working with a real estate professional, take one of his/her business cards to the open house so the agent there knows you're already working with someone else.
Real Estate Brokerage "Catalogs"
Many larger real estate companies will publish "catalogs" (or magazines) of their inventory on a regular basis. Tucker's magazine is called Tucker Talks Homes and is published monthly. It's available for free at many Marsh and Kroger grocery stores and at Union Planters banks - or from our home page by clicking on Free Color Magazine.
Alternatively, sometimes a third party will publish a catalog and sell space to local companies to advertise their listings. These publications are usually free and can be found in grocery stores or at other retailers. In Indianapolis, you can call or contact us for a copy with over 1,000 homes in full color.
Your Real Estate Agent
A good real estate agent will be your best resource to find your new home. He or she will use the BLC - and a network of professional relationships - to help you in your search. Unless you are being unrealistic in your expectations (e.g., wanting too much house for too little money), your agent should contact you regularly with updates about homes coming on the market that meet your criteria. In general, you can expect your agent to work around your schedule for visiting homes; however, you'll also want to be flexible since you've both got a lot at stake in the process.
Once you've scheduled a showing, be prompt and expect the same from your agent. He/she should have a printout of the BLC sheet for the home you've visiting. This sheet will list features of the home and provide information regarding property taxes, homeowner association fees, etc. You should bring a notebook and a camera - especially if you will be viewing several homes in a short time. This will prevent confusion later when you try to remember which feature went with which home.
If the seller or his/her agent is present as you tour the home, keep your thoughts and reactions to yourself. Don't weaken your negotiating position by letting them know how much you want the house or how much you're willing to pay for it. Don't act disinterested, but don't be overly enthusiastic. Furthermore, don't eliminate a house with a potential problem without giving some thought to how you might fix it. You are looking for the best home for your needs; you probably won't find a perfect home.