Hints for Buyers

A disproportionate amount of marketing these days is aimed at the home seller and often the buyer is forgotten in the process. So if you are thinking of buying, read ahead carefully.

1. Plan Ahead

From the moment you think about buying a home, start planning. Home buying is time-consuming and a demanding process. Start by gathering copies of all credit ratings you have received from previous lenders. Are you currently renting? Check your lease for an early release clause. If you'll be subject to penalties, try to time your home purchase with the expiration of the lease or try to find a suitable tenant to replace you. During this planning phase consider your life over the next five to seven years. Do you plan to start a family? Will an in-law eventually move in with you? Will you be working from home? The number and layout of the rooms you require will depend on your answers. If you qualify for financing based on a dual income, will you be able to survive on one salary in order to fulfil a long-range plan, such as one parent staying home to raise a child? Once you've answered these questions, establish a plan. Then direct the process with reference to the plan. Don't let the process dictate to you.

2. Understand The Home Buying Process

First time homebuyers need to ask questions. Lots of questions. So choose a real estate agent that has experience working with the uninitiated and is willing to explain the entire home buying process-from viewing homes to negotiating, to preparing an agreement for sale, to financing, to settlement.

3. Don't Get In Too Deep

It can happen when home buyers shop outside their budgets or overextend themselves. What can you do to avoid getting hooked? Monitor your expenses for a couple of months. Then, based on your findings, develop a budget that truly reflects your lifestyle. Talk to a real estate agent that can provide insight into new home expenses. Then revise your budget.

4. Have A Loan Pre-Approved

It's smart to ask your lender to pre-approve, rather than pre-qualify, you for a loan. Pre-qualification only tells how much you can afford. Pre-approval goes a step further. Your lender will thoroughly evaluate your application - including verifying employment information and income - then clear you for a loan of a determined amount. Having your loan pre-approved gives you a sizeable advantage. Your new status as a pre-approved buyer makes you more attractive to the seller. Once you learn how much of a home you can afford, stay within your budget. Just because you've been approved for a certain amount doesn't mean you'll feel comfortable with monthly payments at the high end of the range. Ask yourself if you can live with these payments.Do they fit your established budget? If not, rethink your spending limit. Your new home should give you great pleasure, not hold you hostage. When you relay your price range to a real estate agent, ask to view properties within that range only. By restricting yourself, you'll avoid disappointment later on.

5. Be Ruled By The Head And Not The Heart

Curb appeal can be a powerful force. It's the first-time buyer's kryptonite. By disengaging the mental faculties, it leaves the homebuyer emotionally vulnerable. To counter its effect, you must be objective. Brutally objective. Look at many homes, including an assortment of types of homes. When you view a property, list the positives and negatives. Take along a tape measure and record the measurements of all the rooms. Make certain your furniture will comfortably fit into the space. Visit at various times of day to see how much natural light floods the rooms and check for changes in traffic patterns, especially at local rush hours. Have an inspector or engineer pick apart the property. And recruit a friend to view the home and provide you with objective feedback. Ask if he or she can picture your family living there and discuss the whys and why nots. Jot down the points for later review. Also, think about how long you plan to own the house. Would it be difficult to resell? List the negatives. Could you eliminate or reduce them?

6. Buy Into A Known Location

Don't stop your inspection at the property line. Examine the surrounding area. Is it safe, well maintained and moderately quiet? Is it convenient to work, schools and shops? Ask about zoning and that lovely vacant land across the street. Could the highway nearby be widened in a couple of years? If you're not familiar with the area, ask friends and colleagues about it. Do your research.

7. Sign With A Full Understanding Of The Financing

Here's where it helps to do a quick study. First-time homebuyers have to contend with an assortment of mortgage types and the associated jargon. Your real estate agent can be a great resource. Shop around and compare. When you decide on a lender (a bank, your credit union, or a mortgage broker) and a mortgage, get every detail in writing, in particular, the variable interest rate, the fixed interest rate, application fees and ongoing bank charges. You should also request an estimate of your purchase costs including Government stamp duty, legal fees and incidentals. Inquire about repayment penalties. Have the lender attach an addendum to your mortgage document that specifies that no penalties will be imposed for prepaying the loan. This step could save you a good deal of money. Before you get to the table, read all the documents related to the mortgage, have them explained to you and have your solicitor review it if you don't understand what the mortgage documents mean. You're committing to signing a binding, legal document. Make certain you understand the conditions of the loan. Learn from the mistakes of others. It's the best way to ensure a first- time homebuyer a good night's sleep.