Loni Lueke REALTOR® - The Do's and Don'ts in your Homebuying Process

The Do's and Don'ts in your Homebuying Pr ying Process

Loni Lueke REALTOR®

Table Of Contents

Why Working With A Real Estate Agent?

Being A Homeowner Cost A Lot Of Money - Doesn't It?

What Are Your Needs And Desires?

Have You Heard Some Horror Stories? Here Is How To Avoid It

And Now: Searching For The Right Home

Negotiation: The Dos And Don'ts

Time For The Home Inspection

Shopping For A Home Loan

Programs And Tax Benefits For Home Buyers 53

10. Finally: Ready To Close

11. Moving Can Be Fun

"Finding the perfect property means, improving the quality of your life!" Loni Lueke I was 18 when I met my first husband, a real estate agent. About the same time, I fell in love with real estate, and I quickly started working in the office and learned all the different aspects of selling and buying properties. Although I became a communication coach later in life, I never lost my affinity for real estate and I continued to purchase, sell, remodel, and invest in properties. In 2014, I made the decision to move from Berlin, Germany to the Hilton Head Island/Bluffton area in South Carolina. As a local, I’m in love with our area, the people, and the quaint, relaxed feel of the Lowcountry, and as a German, I have a unique understanding of the expectations clients from overseas may have when considering purchasing property here. These two views allow me to help various types of clients with their particular needs and wants. Through my 30 years of experience in real estate, and as a communications coach for CEOs and politicians in Germany, I have learned that open, trustworthy communication is the cornerstone for building a solid working foundation. It has helped me to not only gain the trust of my clients but also to solidify the skills needed to meet the needs of buyers and sellers effectively and effortlessly. I aim to provide the highest level of service and to help my clients achieve their real estate goals, whether they are looking for their primary residence, a second home, or a solid investment property.

CHAPTER 1 Why Working With a Real Estat eal Estate Agent? When you are in the market to purchase a home, you don't need a salesperson but a real estate expert who explains the process and helps you to avoid bad surprises during the process and beyond. In South Carolina, we have listing agents who work on behalf of the seller, and we have buyer’s agents that represent the buyer through the entire purchase process. It is important for the buyer to know that, with rare exceptions, the commission for this service is paid by the seller. Usually, the seller agrees to pay a commission to the seller's agent who can then keep the entire commission if he/she represents both sides (seller and buyer). If a buyer is represented by his own agent, the commission will be split between the two agents. A buyer who goes directly to the listing agent and allows the agent to "manage” both sides of the transaction is dealing with an agent who has conflicting responsibilities. One job for that agent is getting the best price for the seller and the other one is negotiating the best purchase price for the buyer.

MORE ACCESS TO THE REAL ES O THE REAL ESTATE MARKE TE MARKET

A real estate agent will have better access to the market and special knowledge of local conditions. The agent is a full-time liaison between sellers and buyers. An agent will have ready access to all active listed homes on the market and often knows what is coming up soon. A real estate agent will track down homes that meet your criteria, contact the seller's agent to secure appointments for 1

viewing the homes, and can provide additional information about the property to the buyer. On their own, buyers have a more difficult time with these things. This is exacerbated if the buyer is moving due to relocation or employment opportunity and does not have the time to dig deeper into the local market situation. If you relocate, find an agent who is experienced in relocating and can provide additional service.

NEGOTIATING IS HARDER ON YOUR OWN

A real estate agent will keep the transaction at arm's length, such that personalities and emotions do not become involved. Price negotiations require special skills and an understanding of the psychology of offering and counteroffering. Each negotiation is different depending on the situation of the seller and the buyer and their willingness to collaborate. Agents keep the transaction dispassionate and rational. For example, a buyer (you) might like a home but despise its wood- paneled walls, shag carpet, and lurid orange kitchen. When you work with an agent, you can express your opinions on the current owners’ decorating skills and complain about how much it will cost to upgrade the home without insulting the owner. Your agent will translate that to the seller — that you very much like the property but can see having to spend a certain amount on decorating costs, and thus can offer that much less.

CONTRACTUALLY SPEAKING…

There are many contracts and documents involved in purchasing a house. The stack of paperwork is more than an inch thick. The transaction involves a real estate attorney who handles the title work and documents, both of which require detailed and accurate completion. Buying a property is not just a “fill-in-the-blanks” transaction. One mistake, let’s say in title work, could haunt the buyer well down the line after purchase. This very situation has happened.

A property that sat on a double lot was put on the market. The neighbor bought it to carve off a bit of the second lot to expand his own yard. The neighbor/new owner then put the home back on the market, and it sold. Months later, through a property tax notification, it came out that in preparing new deeds for the properties, the expanded yard area was correctly titled in the name of the neighbor; however, the house had been transferred to the new home buyer. The new homeowner now owned both houses, and the original neighbor owned his expanded driveway and yard. Fortunately, they were good neighbors and settled the matter with a few signatures. A real estate agent regularly deals with these contracts, conditions, and unexpected situations and communicates closely with the attorney about how to use the contract to protect you.

YOU WON'T NECESSARIL N'T NECESSARILY SAVE MONEY

The point of not using a real estate agent is to save money, right? Otherwise, why would someone turn down professional assistance in finding a home? It's unlikely that both the buyer and the seller will reap the benefits of not paying real estate agent commissions. It works like this: an owner selling on his own (FSBO) will price the house based on the sale prices of other comparable properties in the area. Many of these properties will be sold with the help of an agent; therefore, the seller profits in getting to keep the sale price at the level of homes that are sold with the 6% commission included. Buyers looking to purchase a home "Sold by Owner" without an agent may believe they can save money on the home by not having an agent involved, therefore they look solely at FSBO houses. They might expect money to be saved and make an offer accordingly. But unless the buyer and seller agree to split the saved commission, the buyer may pay more than necessary. Here is a short list of the advantages that using a real estate agent can bring to your buying experience:

· Education and experience · Neighborhood knowledge · Price guidance · Market conditions information · Negotiation skills and confidentiality · Ability to handle the paperwork correctly · Knowledge about the law to purchase Real Estate in your state · Ability to handle closing questions

A REAL ESTATE AGENT IS.... GENT IS....

Simply put, a real estate agent is someone licensed to list and sell real estate, land, residential homes, multi-family properties, commercial, and industrial buildings. A Realtor®, however, is somewhat different. A Realtor® is a member of the National Association of Realtors®. While an agent is always a real estate agent, a real estate agent is not always a Realtor®. A real estate transaction usually includes two agents. The duties of a seller's agents are written in the listing contract with the seller. A buyer's agent should have a buyer-agency agreement with prospective buyers that defines the duties of the buyer's agent and makes it legal that the agent works on behalf of the best interests of the buyer. A Realtor® must also follow the "Code of Ethics"

CHOOSE THE BEST AGENT FOR YOUR NEEDS UR NEEDS

You might feel the urge to pick the first real estate agent who appears competent and tells you what to avoid. As with any profession, there are degrees of professionalism, dedication, and experience. Take your time to look at the agent’s website, social media, and testimonials to get a first impression, and then talk to different agents until you get the feeling that the agent really understands your situation and what property you are looking for. A buyer's agent should ask questions and listen to your answers.

SC law requires that the agent gives you an explanation about the different agency relationships at the first substantial contact. This isn’t required in GA. When you have found the agent who should represent you in the buying process, you sign what is commonly called a "Buyers Agency Agreement". This allows your agent to speak with others involved in the transaction on your behalf. According to an article in Forbes Investopedia, working with the seller's agent is a mistake. "Any information you reveal will become leverage that the seller can use in a negotiation with a buyer.” A buyer's agent is legally required to maintain your confidentiality, disclose material facts to you, and maintain loyalty to you. These are fiduciary duties described in the buyer’s agreement. The agent will inform you about all available properties on the market that meet your requirements. However, he or she will ask you to get pre-approved before showing any homes which will make sure that you'll get only homes in the price-range you are approved for. It’s easy to find real estate agents who tell you they can take the job but finding agents with special credentials — those who have gone that extra step to take additional classes in certain specialties of real estate sales — are worth looking into. My credentials are · Certified International Property Specialist (CIPS ®) · Pricing Strategy Advisor (PSA®) · Short Sale & Foreclosure Resource (SFR® ) · Certified Relocation Expert · Certified Express Offers Expert · Additional NAR Training in Relocation and Investment properties. Similarly, if you choose to use a real estate agent who is also a member of the National Association of Realtors®, it will be a bonus. However, ensure they have credentials that are relevant to your need(s).

RESEARCH LICENSING

Your state will have a licensing board for all active Realtors® and agents which you can easily access. You will also be able to see their contact information, disciplinary actions, complaints, or any other information that may help influence your decision — especially since most of the information is now posted online. A good agent will know about the other properties for sale in the area. Also, a good agent always does their research regarding the events in the current market and those homes that are out there for the taking. In short, you want an agent who is both an expert on the current market and someone who always stays on top of things. Learning the type of market presence that a real estate agent has is the best way to find the right agent for your needs. This would be an agent who specializes in one or two real estate markets and understands which types of homes and amenities are available within your price range. READY TO TAKE THE P AKE THE PLUNGE AND L GE AND LOOK FOR A PLACE YOU'LL CALL HOME? Home buying can be exciting and exhilarating, but it can also be complex and stressful which is why having a pro by your side can make an enormous difference. Your agent assists you every step of the way and can also save you both time and money on the road to homeownership. When you find the right one for you, the real estate agent will work day and night to ensure all your needs and requirements are met when it comes to finding the right house and help you get it. During the shopping period, you'll meet with your agent for tours of homes in which you might be interested. He or she will give you insight into the floor plans, the positive selling points, and information about the neighborhood. They may also give

you a rundown of local activities, restaurants, shopping centers, and schools nearby. If negotiations need to be made over the price, you won’t have to haggle for yourself. Your buyer's agent will do that for you as well as prepare the offer. They will check the contract documents and communicate with the attorney, lender, inspector, and the seller's agent to make sure everything is moving towards a smooth closing.

WHAT IS A DUAL AGENCY?

A "dual agency" relationship occurs when a buyer is being represented by a brokerage firm that controls the listing. Once an agent represents both the seller and the buyer within the same transaction, the situation is known as "dual agency." In multiple states, this is illegal because of the conflicts of interest that can arise regarding the broker. All agents hold the same responsibility, which is to inform their clients of all potential risks that could arise due to conflicts of interest. Legally, agents are not allowed to work on both sides of any transaction without consent from the clients. If you're selling your home and you don't want your agent to also work with the buyer of your home, it's your right to say so in the listing agreement. This is also true for buyers. A buyer can get out of an agreement with an agent if they are interested in purchasing a home their agent is listing. When it comes to dual agency, there are definite advantages for the seller: · Your agent brought you the buyer knowing that you're selling, even if your property has not yet hit the market. · Your listing agent will have already covered and researched your neighborhood's market to gain buyer inquiries, which means your agent will be working from all sides of the deal to sell your house faster, and with more incentive. · Your agent works together with corporate relocation buyers

who need to find a house quickly, and they will ensure it's your house that's bought. There are also cons for the seller when it comes to dual agency, and they are: · You can't be advised by your agent as thoroughly when they must act as a dual agent because impartial facilitation is required. · Your listing agent is not allowed to negotiate the best or highest price for you if also negotiating both the best and lowest terms for the buyer. · Earning a full commission, if the opportunity arises, may tempt the agent to coerce a deal that you might not accept otherwise. · Your agent may inhibit all access to your listing through buyers with agents. To avoid surprises or missteps in a dual agency sale, always ensure you have clarified important details with your agent ahead of time. You can do this by using an exclusive buyer agency agreement, or a listing agreement.

HOW DOES REAL ES ES REAL ESTATE AGENT GE GENT GET PAID?

The National Association of Realtors® 2021 Profile of Home Buyers and Sellers states approximately 8% of homeowners opted to put their homes up for sale in 2021 without using a real estate agent or Realtor®. A handful of For Sale by Owner (FSBO) transactions dealt with sellers and buyers who previously knew each other or were directly related. Real estate agents and Realtors® — unlike professionals in different categories who bill by hourly rates or earn a salary — get paid through a transaction (commission) at the end of each sale. For example, if an agent has worked with a seller or a buyer for months, they don't get paid for the time spent if there is no transaction during that period. Agents receive a commission once the transaction goes through to settlement (closes) based on the selling price of the home. At that point, the commission is earned.

The commission itself is up for negotiation between the seller and the agent. Typically, an agent will receive a commission of 6% from the sale price, which they will then have to share with the buyer’s agent. However, brokerages allow their agents the flexibility to offer better rates for their sellers under certain circumstances, such as when the listing agent also brings a buyer.

PAYING THE COMMISSION

The overall commission is paid at the settlement period by the seller. The fee is taken from the proceeds of the sale of the home or the property. From there, the commission is then divided during the settlement process between the buyer's agent brokerage and the listing agent's brokerage.

CHAPTER 2 Being a Homeowner cost a lot of wner cost a lot of money - doesn't it?

Owning a house brings a whole new experience into your financial plans. For example, consider taxes and mortgages. When you purchase a home, it’s important to understand what can be deducted and what can’t. A powerful piece of information many homebuyers overlook is the effect of mortgage interest on their federal income tax payments. Mortgage interest is deductible and a powerful financial planning tool. Calculate the amount of mortgage interest deduction and include that in your annual financial planning. Then, make a point of checking the Internal Revenue Service (IRS) Form 1098 from the lender at the end of the year. This form shows the amount of mortgage interest that you’ve paid. Some of the nondeductible items include home repairs, general closing charges, homeowners’ association dues, as well as property hazard insurance premiums.

ADVANTAGES OF BEING A HOMEOWNER

Control over housing expenses. By selecting a fixed-rate 15-, 20-, or 30-year mortgage, the homeowner has the assurance that housing costs will not increase over the period, and, in fact, will be eliminated at the end of the term (subject to refinancing). You build equity. Some of each monthly mortgage payment goes toward the loan’s interest. Other portions may go to homeowner’s insurance and

county taxes. The remainder pays down the loan principal. Every dollar put toward your loan’s principal represents a dollar of equity — actual ownership of the property. Further, the property should appreciate each year, adding to equity (the difference between the current fair market value of a property and the amount of debt owed against it). With certain blip periods such as the 2007 housing bubble burst, home prices in the US appreciate nationally at an average annual rate between three and five percent (home value appreciation in different metro areas can appreciate at markedly different rates than the national average). Improvements increase your home’s value. A homeowner can also increase a home’s value through home improvements, thus both making your home more comfortable and enjoyable while growing its loan-to-value (LTV) ratio. For instance, adding a bathroom or finishing a basement substantially increases the property’s functionality and curb appeal while potentially boosting its value. Tax advantages of homeownership. You qualify for major tax benefits when you buy a house, both at the time of purchase and for the remainder of the period you own the home. Homestead exemption. Many states exempt all owner-occupied homes (homesteads) from a portion of the property tax amount that would normally accrue. For instance, Louisiana exempts the first $75,000 of a home’s value from property tax assessments, such that a $200,000 home in New Orleans is taxed as if it were only worth $125,000. Federal tax deductions. Property taxes and interest paid on your mortgage can be deducted if you itemize your federal income taxes, reducing your income tax burden. Additionally, discount points can be claimed on the loan. There are generally two types of mortgage points: discount points and origination points. Each of these points is equivalent to 1% of your mortgage. Discount points

involve prepaid interest, are tax-deductible, and can reduce your total mortgage payment. The interest rate on your mortgage typically lowers by 0.25% per point you buy. Current mortgage rates are relatively low. Interest rates rise and fall through the years. Several years ago, interest rates were higher, and it was more expensive to obtain a mortgage. Since these costs have been reduced, it is now easier and less expensive to own a house. Ownership rights and creative freedom. Your decorating and home improvement choices are just that — yours, provided they don’t break building codes or violate homeowners’ association rules. You can paint walls any which way, add fixtures, update or finish your basement, or build a patio or deck. Changing your environment to suit your whims is a freeing aspect of homeownership. A sense of belonging to the community. Homeowners tend to stay in homes for longer than renters and are more likely to grow roots. They might join a neighborhood association, sponsor block parties or National Nights Out, volunteer at a nearby community center, join a school group, or align with a business improvement district. Renters might not do any of those things, particularly if they know their lease is up in a year and they might move.

SAVING MONEY BY PREPAYING YOUR MORTGAGE

It’s a great idea to prepay your mortgage if you can. By doing so, you can reduce the costs incurred together with interest and save thousands of dollars in the long term. To prepay the mortgage means that you pay the amount you owe to the lender before the due term. To do so, it’s important to understand some of the most popular methods of doing this. Some people decide to pay a monthly sum above the mortgage payment. This amount gets applied to the principal (not the interest) and doing so consistently can save you a small fortune in the long run. Another way of reducing interest is through a system of making thirteen payments in a year instead of twelve.

This is part of shopping for a mortgage. Some mortgages have a flexible policy, which allows you to make extra payments as you consider fit and without restrictions. In other cases, however, the terms of overpaying a loan are strict and require a penalty for those who are planning on prepaying the mortgage. These terms are detailed in the prepayment penalty disclosure section of the documents. Be sure to examine the documents carefully. In addition to that, there is an intangible pleasure attached to owning your own house: a sense of freedom and independence. The home you live in belongs to you and only you (and, perhaps, your spouse), and you can do what you want with it. You are not daunted by increases in rent or the risk of losing your lease. You are free to make improvements and changes. Also, owning your home gives your children the guarantee of attending the schools in the area on a more permanent basis; you never have to worry about a notice from the landlord to vacate your rented house or apartment for any of a variety of reasons over which you have no control.

CHAPTER 3 What are your Needs and Desir our Needs and Desires? You have decided to buy a home; what sort of home will it be? Do you already have a concrete vision in mind of what type of home and which features and amenities you want, or are you still in the decision process? Your dream house should fulfill both your needs and desires. The need is usually for a good roof over your head, a sturdy structure, good working fixtures and appliances, living space (e.g., bedrooms, living room), and functional rooms (e.g. kitchen, bathroom[s]). Your home purchase priority should ensure all your needs are met. If your needs are fulfilled, turn to your desires. Perhaps you envision a home on the beach or in the woods, a gourmet kitchen, a wood-paneled den, a crystal chandelier over a banquet table in the manor-sized dining room, or an Olympic- sized swimming pool with a hot tub and sauna. Sometimes, you won't find everything you desire in a home; if you do, you may not be able to afford it. It's important to prioritize the things you want in a house by their importance in your search. Decide your needs vs. your desires. • Would you like a swimming pool or do you need one for health reasons? • In what areas or neighborhoods might the home be located? • What features would make the home special? • How important is a big backyard? • Do you want or need an oversized garage? The question is: What's within your price range? Budget usually constrains us most in selecting a home. While

some things are necessary for any home (as mentioned, a good roof and working appliances), others will stay on the list of desires for now (like the sauna).

MAKE A LIST, CHECK IT T , CHECK IT TWICE

You may have an impression of what you want in your new home. Putting that to paper and having a complete checklist can be helpful. Before starting your hunt for a new home, it's advisable to list all your basic needs and desires and then prioritize them by figuring that all needs must be met in any house under consideration. This will make the search easier and help weed out the ones that don't meet the basics. However, finding a home that meets all requirements may be impossible. What compromises will you be willing to make? It's a good idea to work from outside-the-house factors to inside-the-house. For example, location is perhaps the primary concern, and both “needs" and "desires" might be involved. A "need" would be "must be within 25 miles of work." Another need might be "on the west side of the city" (because work, family, friends, and recreation activities are all located there). A desire might be something like "would want Westwood" (a favored neighborhood). Location needs may include proximity to schools, frequently used recreation facilities, or mode of transportation (bus or suburban rail access). Whether an item is a need or a desire depends on circumstance. Closeness to family might be a need for a couple with young children or elderly parents to care for — or a desire if those factors aren't involved. It's items like these that make a checklist most helpful. After location needs and desires are compiled, housing factors can be considered. Needs include having all essential house structures and systems in good working order.

Accepting a house with the need for a new roof because the owner is willing to knock $7,000 off the listing price — but it will cost $10,000 to replace the roof in two years is not a sensible deal. Needs might include a minimum number of bedrooms and bathrooms, no steps, a fenced yard, perhaps a first-floor laundry facility, and any feature the prospective buyers have decided they cannot accept a home without. Desires are features that make the home more attractive or enjoyable — an upgraded kitchen, walk-in closets, big main bedroom suite. Of course, one buyer's need is another buyer's desire. The point is to know your own needs and desires to assess potential properties and easily make the process smoother. Make a plan! Buying a house is not a simple process. Some of the planning should be done before contacting a real estate agent or looking at homes. Choose a general location. Work the costs as well as your budget. Get in contact with lenders ahead of home shopping to know the price range of homes you should look at. Knowing the difference between your needs and your desires makes it easier for you to compromise if necessary. Needs are basic requirements that just can't be ignored. On the other hand, desires can be left behind if the situation demands it. A pool can be added later, and paint colors can always be changed.

A NOTE ABOUT PETS

Consider your pets in your home shopping. Homebuyers who own pets have specific requirements — they must provide for their pets. A third of millennial-aged Americans (ages 18 to 36) who purchased their first home (33%) say the desire to have a better space or yard for a dog influenced their decision to purchase the home according to a survey conducted online by Harris Poll on behalf of SunTrust Mortgage. Dogs ranked among the top three motivators for first-time home purchasers and

were cited by more millennials than marriage/upcoming marriage (25%) or the birth/expected birth of a child (19%). The neighborhood where you're going to buy a house must have no restrictions on pets — or livestock if that's something you desire. Do you raise American Staffordshire Terriers, also known as pit bulls? Some neighborhoods ban this breed. What about goats? Vietnamese pigs? Have you always wanted fresh eggs from your own chickens? Include your animals in location planning. Most pet owners choose wood or other hard-flooring over carpet, not wanting to risk pet damage or odors. An appropriate-sized fenced backyard is on the "needs" list for many pet-owning house buyers. Consider the arrangement of rooms and the house's structure to ensure it's suitable for your pets too. Traffic in the area could be another checklist item. Pet services, such as veterinary, grooming, and exercising, should be conveniently located nearby.

LOCATION, LOCATION, LOCATION!

You must limit your search to a neighborhood that offers the closest possible match to the kind of lifestyle you like and want to live. In addition, based on the 2021 NAR Generational Trends Report, 62% of homebuyers prioritized the neighborhood's quality as a reason for purchasing a house and the primary reason for their neighborhood choice. Location is so important that people are willing to give up "must-have" features to buy into their desired neighborhood — 72% would forget about a pool, 55% would lose a finished basement, and 33% would accept less square footage. What matters is living in a safe place with good schools. According to Trulia, 69% would drive through the neighborhood during different times of day to determine if the neighborhood was the right fit. You can't go shopping for a home without choosing a location where you'd like to live. Probably the most significant decision when buying a home is where it is.

Location influences your everyday life. Your property does not exist in a bubble; it's part of a bigger community. It's important to find a neighborhood or area that suits your needs. Do you want the peace of secluded woods or the energy of a bustling city center? Do research before starting your search. Drive through the area and see if all the stores, activities, and features you want are there. Eat at local restaurants and walk through a nearby park. As price is mainly based on the location and condition of the property, when someone starts looking for their future house, it's important to consider the location and how far it is from schools, shopping areas, and other facilities. Home means comfort, and comfort can't come if the location isn't suitable.

CHAPTER 4 Have you hear ou heard some Horr d some Horror Stories? Here is how to avoid it

You’ve seen frightening stories like this on TV. Perhaps you’ve heard about them from neighbors or co-workers, but you still haven’t witnessed anything like them yourself. Be warned. The first time is one time too many. Now that you’re in the market for your first home, or maybe a second or third, congratulations! Buying a new home is one of the most significant achievements for many people. Unfortunately, homebuyers — especially first-time buyers — can be the victims of real estate horror stories. Absolute horror, from Alex was excited about making her first home purchase. Being in the Washington, D.C., area, she was limited with pricing options, with many of the lower-cost homes around $250,000. She went to several banks and got preapproved for different amounts at various lower interest rates. She found her dream condo, and after some deliberating, she decided to go with the lowest rate of 4% offered by her lender. She completed her paperwork and submitted it with her 10% deposit. The rate wasn’t her only deciding factor. Personnel had been friendly and great at communication, making her feel very comfortable about the process. Now, suddenly, it seemed like all the bank corporations had dropped off the map. A closing process that should have taken 30 days or less turned into several months of waiting and a the buyer’s perspective. Here are a few examples.

larger deposit of an additional $20,000. They ran her in circles until the seller told her, through the real estate agent, that the deal was over if she didn’t find another solution. Luckily, the seller’s real estate agent referred her to another lender and was able to help her to obtain another loan (although at a higher interest) much more quickly. It turned out the first lender was a scammer. In another case: Ron and Jenna planned to upgrade to a new home. After a long search, they found it — or so they thought. A bright and colorful kitchen, open living and dining areas, three bathrooms, high ceilings, a fireplace, and even a covered porch made the home seem perfect. They were especially thrilled that the price was only $335,000. That was a steal. They signed the contract and were in the house more than a month later. Less than six months later, the horror story began to unfold. Jenna was cleaning one of the bathrooms when she noticed tiny little ants with wings. Following Ron’s advice, she called the exterminator. When he arrived, he delivered the first blow — these winged ants were termites. The exterminator went under the house to assess the damage. He found that the floor under the bathroom was not only completely infested but also the other two bathrooms, and the infestation was spreading to more of the house. The total to repair this problem came to over $12,000! That’s a huge amount of money to invest in a house unexpectedly you’ve lived in for less than six months. THE KEY LESSON IS: KNOW THE HOUSE YOU ARE GOING TO PURCHASE Take the time to educate yourself, and a good real estate agent should help you move forward in the right direction and connect you with other experts to help avoid these pitfalls. Getting a home inspection is important, but it’s still not a guarantee that everything works as it should. Inspectors can miss some problems and things could work during the

inspection and fail a week later. In the case of Ron and Jenna, the previous homeowner supposedly installed the sump pump in the basement. It failed shortly after Ron and Jenna moved in and the basement flooded. You have to be prepared for unexpected things like this. Be careful. Be smart. Do your homework before signing paperwork or jumping into a new home. Choose the right experts to help you. Too many people spend more time shopping for a car than they do on a home — a much larger and more permanent investment.

CHAPTER 5 And now: Searching f ching for the Right Home Buying a home is an exciting event, but the process of finding the right one can be daunting. It's a significant investment and emotional decision. Searching for a permanent home often follows another emotional event like a new job, starting a family, kids leaving for college... and the home search becomes a change of your lifestyle. This makes doing your homework to avoid costly mistakes all the more important. The same applies to purchasing a second home and for investing in real estate. Get prepared for the purchase and get advice from your realtor and a financial advisor before you start your house hunt.

VIEWING HOMES

For most people, the prospect of viewing homes they like is a thrilling experience. You do know what you are looking for. You did your homework; you have your down payment secured, a mortgage pre-approval, and your list of the needs and desired criteria. That will save you significant time and effort, and you’ll avoid running around to view homes that don’t suit you. After you’ve decided upon your criteria, call your real estate agent. Tell them what you’re looking for and your price range. They will get to work on your behalf, shortlisting the properties that meet your criteria and scheduling a showing tour. The goal is to find that perfect home you've been dreaming of!

SCHEDULE ADEQUATE TIME

When viewing homes, ensure you got enough time to view the house from a critical perspective. Look into all closets and crawl spaces. You may live there for years to come, so five minutes of strolling around will not be adequate to form an opinion. Research suggests that buyers who spend a long time viewing a home are more likely to pay below the asking price.

BE THOROUGH

Make sure to schedule enough time to view the home. Be thorough when checking it out. Open drawers, cabinets, and cupboards. Look behind furniture and under it to find stains or signs of wear. Lift rugs if necessary; you're about to make a substantial investment, and you need to know exactly what you'll get. An artfully positioned chair could hide something, so feel free to look where you need to. Of course, if you've dismissed the home from the start, do only a minimal walkthrough or don't even bother with the inspection. But if the property has potential and is something you like, open every door and look in closets.

WHAT COMES WITH THE P MES WITH THE PROPERTY?

Confirm what is included with the property sale. Are appliances, such as refrigerator, dishwasher, washer, dryer,... included in the sale? Your agent will take care that you get all information in writing if you decide that you would like to buy the property.

DON'T BE FOOLED BY S LED BY STAGING

Sellers use clever tricks to make a home more appealing. They can strategically light a room to draw attention away from a problem or apply fresh coats of paint to cover water damage or mold issues. When viewing the house, look beyond the immediate aesthetics of the interior. Focus on what you'll get when the furniture and interior décor are stripped away.

KEEP EMOTIONS AT BAY

When viewing a home initially, try not to get attached. Rapid emotional attachment may cloud your decision-making or allow you to overlook failings in the house you might see differently without an emotional lens. An agent can help you to keep emotions out of consideration and only consider the potential property as a building you need to inspect.

VIEW MULTIPLE TIMES LE TIMES(if possible)

If you have found a likely prospect that strongly interests you, view it at least a second time. You're more likely to identify potential problems if you view the house at a different time of the day. You'll also glean knowledge of the neighborhood at various times. Is a street that's not busy in the late morning a commuter route in the early morning and mid-afternoon? This way, you'll know what traffic is like in the area and the noise levels that occur at different times.

CONSIDER THE OVERALL CONTEXT

When viewing, don't just consider a property on its own; view it in the context of its location. What's the area like? Is the property adjacent to a train track or a noisy intersection? Is there a pub or restaurant close by that gets loud at night? How close are you to the things you might need, such as schools, public transit, a grocery store, or a hospital? These are important questions to consider when viewing properties, as they can add or subtract from the overall enjoyment of your home.

LET YOUR AGENT DO THE J O THE JOB

Don't go viewing on your own. There's a security factor in traveling to unoccupied houses alone. Let your Realtor® do their

job. If you come across a property that interests you and your agent hasn't told you about it, it might not meet all your criteria. If you think you want to view it, give your agent the address and phone number. Your agent can then arrange a proper viewing for you together without the owner being present.

THE CONDITION OF THE PROPERTY

When assessing a home for potential purchase, there are important items to look for — the primary one being the property's condition. Although you would have an inspector checking the condition of the house after your offer got accepted, you can check some items upfront. Here are some examples. Is the home structurally sound? Walk around the interior of the home, checking the walls and ceilings for cracks. Hairline cracks are to be expected in some places. Check the exterior for cracks. Cracks could be a sign that the property isn't structurally sound. Points at which extensions join are places to look, as cracks often occur there. Also, look for loose or broken tiles on the roof or broken guttering, evidence of damage to the drywall, and weaknesses on the floors. It's acceptable to ask how long it's been like that and whether it will be fixed. Have a structural engineer assess the situation if you see significant cracks or bowing walls. Look (and smell) closely for evidence of mold. Mold and mold damage are major problems that will cost a lot to clean and repair. Don't just look for it — use your nose as well. Mold frequently gives off a musty smell while showing no visible signs. Inspect all crawl spaces, basements area, and walls. Plaster that's flaking, watermarks on walls or ceilings, or even a fresh coat of paint in part of a room could be indications of mold. Ensure heating, air-conditioning, and electricity is in good working order. Other aspects to consider when looking at the property's general

condition are the heating and air conditioning systems. During the inspection, the inspector will assess that they're the appropriate models and capacity and working correctly. The review also includes the electrical panel. It must be easily accessible and in good working condition. Inspect basements and attics. Check the attic for water leakage issues. Look for water damage or leaks that may have affected the attic's insulation, walls, and ceiling. The inspector will check that the insulation is adequate for where the property is located. In the basement, look for evidence of moisture problems. Is there water leaking onto the floor or water around the foundation? There should be no cracks in the basement walls, and any wood such as those in exposed beams should be in good condition. Look at pipes and turn on taps. It's essential from a health perspective to determine that the pipes aren't made of lead. Check that the plumbing is up to date. Run taps to ensure they work properly and that the water pressure is strong enough. Also, check the age and condition of the water heater. Is the exterior of the home in good shape and well-maintained? Check for evidence of water around the foundation, which may indicate drainage issues. The ground should slope away from the foundation. If there's a porch, it should have a foundation, not simply sit on the soil. Check that the siding of the home is in good repair. Look at the landscaping on the property. It shouldn't be unkempt and unsightly, as that can indicate a lack of care. If there is one, the sprinkler system should be in proper working condition.

PROPERTY HISTORY

It's a good practice to know all you can about the property's sales history under consideration. Don't simply settle for the information contained in the customer listing copy. Ask your agent for more detailed information. Find answers to how long

the property has been on the market and whether it was previously listed, withdrawn, or relisted for a lower price. These kinds of questions can help you decide how much to offer. You'll also need detailed information on the property, most of which will be available from the public records. A bit of research online will disclose the owner's name, the actual age of the home, mortgage history, parcel number, previous property sales, property deeds, and any judgments or liens filed against the seller. Information about the property taxes and whether they're paid or in arrears will also be available in the records. You'll be able to see if there were permits obtained to make improvements to the home. These permits could complicate the sale of the property if workers attached liens or improvements were not done up to code. Please don't skip this search because it reveals important information about the property you're interested in and could save you money. You can get this information through your agent since most agents subscribe to services that give them access to such data. Real Estate transactions in South Carolina are handled by an attorney who takes care that you get all vital information about the property.

MAKING THE CHOICE

Once you've done all your homework, you need to decide whether or not to submit an offer on the house. You must step back and evaluate all the information available from viewing the house, inspecting its condition, and obtaining public records. Keep in mind: • You will likely need to compromise on some of your priorities. No home is entirely perfect, and the first home is often a "starter" on the way to a dream home. However, even if it fits your needs, desires, and lifestyle, there will be things you wish you could change. Examples might

include hoping the home was facing the lovely park you saw nearby or in another, fancier neighborhood. You'll need to decide the factors that are most important to you. If you prefer the area over the house, you may choose to look for a different type of property within the same community. • If finances are the issue, you might want to discuss with your bank whether they would be willing to increase your mortgage. But use caution, and only do this if you can afford it — there's no point in getting into financial trouble just to get a specific property when more affordable ones could do just as well. Lower your expectations on the condition of the home. If the inspection revealed a few small problems, you could still buy the property and do the repairs yourself. If there are bigger problems, your agent will negotiate the repairs with the seller's agent on your behalf, and usually, you can choose to get the repairs done or get a credit to repair it yourself. • Be prepared to walk away if there is no agreement with the seller possible. This echoes our earlier point about not getting emotionally attached until you have bought and moved in. If, at the end of the day, you find out the compromise required is more than one you're prepared to make, just walk away.

CHAPTER 6 Negotiation: The Dos and Don'ts So, you’ve pre-viewed dozens of homes; you went to several open houses; you may have talked to builders; you’ve found the ideal neighborhood, and you’ve searched for the best available offers. Or maybe you were lucky, and it was love at first sight, and you're eager to close the deal as soon as possible. Congratulations! But before the closing comes the most critical and challenging part of the home-buying process: the price negotiations. You know how much money you have and your available financing options. You likely know how much money you wish to spend for the home you fell in love with. If you're a first-time home buyer, a veteran, police, or military employee then special federal programs and state loans could help you with the down payment and mortgage interest rates. Considering all the opportunities and possibilities will give you flexibility during the negotiation process.

MAKE YOUR FIRST OFFER THE B FFER THE BEST OFFER

Making your first offer is an important step that needs significant preparation and analysis. Go in knowledgeable and consider all the components of your offer when submitting the proposal to the seller. When you work with a real estate agent, he or she will do the negotiating on your behalf. A Comparative Market Analysis (CMA), which your real estate agent can provide, is critical to finding the right price. It calculates the primary conditions such as the number of bedrooms, bathrooms, existence/size of the yard or swimming pool, etc. Then, it compares your potential home to similar houses on the market in your area. This model will give you an 33

idea of the average local cost which will be essential information to find the best price for your offer. After the approximation, add or remove the components that affect the value. For example, you could know that the current owners have recently changed all the plumbing in the house. Or, conversely, that the plumbing is 25 years old and will probably start breaking down soon. Get estimates for any necessary repairs or ask if the seller will do the repairs before selling. Research the market trends. Has the local market gone up or down over the last few years? Do people buy or sell more? Are there houses being built that will soon be for sale? For example, teardowns and new construction would indicate rising local home prices. Get informed about the masterplan for the area. Will there be a change in zoning, construction of big commercial properties, plans to remove trees or any green space, or are they going to build a park or playground etc.. Depending on the plans, a neighborhood can change in value and therefore increase or decrease the price of homes. Those calculations and forecasts may take time and effort, but they will ideally leave you with options to consider and choose from. It won't take a professional as long to evaluate all the pros and cons and help you with your decision. The real estate agent's services will be beneficial by connecting you with the sources who can provide you with reliable information. He or she will assist in this process and usually help to find the best offering price based on the factors involved. After you agree on a price, the agent will send the proposal to the seller's agent. The seller's agent will present the offer to the seller and your offer will be accepted, you’ll receive a counteroffer, or it will be rejected. The communication about the offer is between the seller’s and the buyer’s agents and they are communicating with their clients. This way, the emotions between seller and buyer are filtered and the negotiation is about the facts. However, there are always emotions in place. On the seller's side, this could be anything that happened to make the seller leave a home for a good, or not so good, reason.

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96