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10 tips for Buying
Real Estate in Kentucky
Buying a home can be complicated and
frightening. You acquire a large debt and assume many new responsibilities.
And in the back of your mind is that nagging question, "Did I get
ripped off?"
The American
Homeowners Foundation has prepared a list of 10 tips designed to help
you make the best home-buying decision possible.
1. Look at the purchase as an
investment. Home equity is one of the primary ways Americans save. Tax
incentives and the ability to tap into your home equity under certain
circumstances make buying a home a prudent financial investment for most
people.
2. Avoid short-term loss. Most places
have seen rapid home price appreciation. But in some places, average home
prices have dropped over the short term in recent years. It is always
possible that unforeseen conditions may force you to sell your home in a
slow market. You can make the most of your investment by buying in a
neighborhood where home values are expected to appreciate.
3. Use a buyer’s agent. A buyer’s
agent represents the buyer and is paid by the buyer to represent his or her
interests. In a traditional transaction, the real estate agent represents
and is paid by the seller. In such cases, agents must disclose all relevant
information to the seller, but not to the buyer. If you’re not a skilled
negotiator, a buyer’s agent is probably the smart choice.
4. Choose your agent wisely. Look for
an agent who is experienced in working with buyers, knowledgeable about the
neighborhood you are considering and doesn't have a reputation for being
pushy. Interview at least three agents, and ask for references. A good agent
knows you need time to sort out the many factors involved in a purchase
decision.
5. Watch interest rates. Experts
recommend you buy and sell real estate when interest rates are low--if you
can. The lower the interest rates, the bigger the mortgage a buyer can
afford. An asking price may sound too high, but at a lower interest rate,
you might be able to qualify for a loan and afford the payments.
6. Carefully inspect the home. Learn
as much as possible about evaluating the condition of a home. Avoid making
an offer on a home with a major defect. Always have a professional
inspection. If problems are uncovered, you may be able to use the estimate
for repairs as leverage to get the owner to lower the asking price.
7. Research mortgage options. Sellers
normally want buyers to apply for a mortgage quickly. Before you make an
offer, get all of your paperwork together and research what kind of mortgage
fits you best. Get rate quotes from at least three lenders. Consider getting
a loan commitment in advance. If you are able to "lock in" an
interest rate, remember that doesn’t last forever, so make certain
you’re ready to make a decision.
8. Learn about the seller. There might
be mutually beneficial opportunities. For example, a seller who is saving
for retirement or a child’s education might be willing to finance all or
part of the home purchase at a rate that is lower than you could obtain
otherwise and more than they could earn elsewhere.
9. Learn to negotiate. Money is saved
or lost in negotiation of just about every transaction. Even if you have a
buyer’s agent, you’ll have to make decisions about how much to offer and
how much to compromise on a counteroffer.
10. Study, study, study. These tips
are only the beginning. You’ll need to know a lot more if you want to make
wise decisions. Read articles on home buying, financing, negotiating, home
inspection and real estate contracts.
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