tQ: I plan to buy a home by the end of the year. This will be my first home purchase, and I would like some tips on how to go about buying.
I am single and will be buying the home on my sole income. I am not interested in buying a condominium nor do I wish to be taken advantage of by a Realtor. Please advise.
A: The question of buying a home cannot be simply answered in one column. Since you apparently have some time, begin to read a number of publications on home buying, including articles in magazines and periodicals published by government agencies, trade associations and private concerns.
You should also familiarize yourself with the "cast of characters" involved in a real estate transaction, including the real estate agent, the mortgage lender, the seller and the attorney.
First, determine how much you can afford to pay on your monthly mortgage. This will be important in determining what house you buy, including the location, cost and size of the property. You should also investigate neighborhoods in the Washington metropolitan area.
Contact the local county or city office in the jurisdictions you are considering, and determine the plans for the area. For example, if a major highway or shopping center is planned for the neighborhood in question, these facts are important in your decision making.
Perhaps the best way to get a flavor of the home-buying process is to shop around. On Saturday and Sunday, many homes for sale are open for inspection. You will soon learn the kinds of questions needed to be asked, merely by going to a number of these open houses.
If there is a real estate agent involved, he or she will no doubt want to get your name to follow through on additional leads. Don't be afraid of working with an agent, but keep in mind the basic idea that this agent is not your representative.
A real estate agent is paid by a seller, and thus owes his or her allegiance to the other side.
There are at least five provisions that you must include in any contract for the purchase of real estate.
Contingency on financing. The contract must be contingent on your ability to obtain satisfactory financing, within a 30- to 45-day period. If you cannot get the financing, you should be able to get your money back in full, and the contract will be considered "null and void."
Contingency on inspection. No matter how nice the house may look on the outside, there may be structural or other defects that will affect your decision to purchase.
Make the contract contingent on a building inspection report, satisfactory to you. You will have to pay for this inspection, but then the inspecor will be working for you.
Mechanical and other equipment in working order. The plumbing, heating, electrical equipment air conditioning system (if any) should be in good working order at the time of settlement. You should have the right to a "presettlement inspection," which you will make the day of settlement.
After all, between the time you sign a contract and finally go to settlement, many things may go wrong with the house. Unless you have a provision in the contract requiring these facilities to be in good working order, the burden of repair may fall on you.
Termites. The contract should require the seller, at his or her expense, to pay for a termite inspection. You should get a written report at settlement indicating that the property is free and clear of any active termite infestation.
Select your own title attorney or insurance company. Often, sellers and real estate agents would like you to use the service of their favorite attorney or title company. While there is nothing legally wrong with this arrangement, you should shop and compare prices before deciding what attorney or title company will conduct your settlement. Don't forget that you want a professional that will be working for you, with no conflict of interest.
You should also get professional help before signing any real estate contract. Your attorney will be able to assist you in the drafting and review of the contract, as well as giving you guidance and advice throughout the process.
Perhaps the most important point to remember in this entire process is that you have the absolute right to shop around for the best deal. Everything in the sales contract is negotiable, despite what others may tell you.