Help when buying a new Home

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Buying a house

1. Making verbal agreements!
   If an agent makes you sign a written document that is contrary to their verbal commitments -- don't do it! Example: the agent says that the washer will come with the house, but the contract says that it will not -- the written contract will override the verbal contract. In fact, written contracts almost always override verbal contracts. Buying a house is a very complex process -- but it's a lot easier when everything is in writing.
    
2. Choosing a lender just because they have the lowest rate. Not getting a written good faith estimate.
   While rate is important, you have to look at the overall cost of your loan. This includes looking at the APR, the loan fees, as well as the discount and origination points. Some lenders add origination points into their quoted points while other lenders add an origination point in addition to their quoted points. So when one lenders says 2 points they mean 2 points, whereas another lender means 2 points plus 1 origination point.
   
   The cost of the mortgage, however, cannot be your only criteria. There is no substitute to asking family and friends for referrals and interviewing prospective mortgage companies. You must also feel comfortable that the loan officer you are dealing with is committed to your best interests and will deliver what they promise. Often the company that has the absolute lowest quoted rate may not be the best company for your mortgage business.
    
3. Using a dual agent i.e. an agent who represents the buyer and the seller on the same transaction.
   Buyers and sellers have opposing interests. A dual agent in most normal situations cannot be fair to both the buyer and seller. Most dual agents represent the sellers more strongly than they do the buyer. If you are a buyer, it is much better to have your own agent who will be on your side. The only time you should even consider a dual agent is when you get a price break from using a dual agent. If that is the case, then tread carefully and do your homework!
    
4. Buying a house without a professional inspection. Taking the sellers word that they have made repairs.
   Unless you are buying a new house where you have warranties on most equipment, it is highly recommended that you get a property inspection, a roof inspection and a termite inspection. This way you will know what you are buying. Inspection reports are great negotiating tools when it comes to asking the seller to make repairs. If a professional home inspector states that certain repairs be done, the seller is more likely to agree to do them.
   
   If the seller agrees to do the repairs, have your inspector verify that they are done prior to close of escrow. Do not assume that everything has been done the way it was promised.
    
5. Not shopping for home insurance until you are ready to move in.
   Start shopping for insurance as soon as you have an accepted offer. Many buyers wait until the last minute to get insurance and do not have time to shop around.
   
    
6. Signing documents without reading them.
   Do not sign documents in a hurry. Whenever possible try to get documents that you will be signing ahead of time so you can review them. It is advisable to ask for a copy of all loan papers you are signing a few days ahead of the close. This way you can review them and get your questions answered. Do not expect to read all the documents during the closing. There is rarely enough time to do that.
    
7. Making your moving plans too tight.
   Example: you expect to move out of your prior residence on a Friday and into your new residence over the weekend. So you give notice to your landlord to end your lease on a Friday and arrange for movers to come to your house on Friday. Then, your loan closing gets delayed until the next Tuesday. You now may be homeless! New tenants could be moving into your apartment, and the movers are going to charge you for wasting their time. You could be forced to live in a motel for a couple of days!
   
   A Better Plan: allow for a 5-7 day overlap between closing and moving. In the long run it is not nearly as expensive, and it will sure give you peace of mind.