5 Things Home Buyers Need to Be Aware Of
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Right now, there are a lot of good deals to be had when it comes to buying a home. Home prices are low, and mortgage interest rates remain relatively low. And, it looks like Congress is getting serious about some sort of extension to the home buyer tax credit. It really is a great time to buy — if you can find the right deal. However, in the frenzy, it is important to slow down and evaluate whether or not you really are getting the best deal. Carolyn Warren wrote the book Homebuyers Beware: Who’s Ripping You Off Now? What You Must Know About the New Rules of Mortgage and Credit. Here are 5 things, shared in an email, that Warren points out about what you should know about home buying:
- Some prices are too good to be true:
“That ultra-low price might be nothing more than a lure to bring in bids. Right now, many homebuyers are bidding on 5 to 10 bank-owned properties before they get a bite due to bidding wars and all-cash offers. If you want to avoid that type of stress, make an offer on a privately-owned property instead.”
- Don’t think that “exclusive” always is:
“Realtors like to post signs saying a property is “exclusive” with them, but what that really means is that you cannot go to the home owner directly with your offer and that all offers need to go exclusively through the listing agent. That’s normal, whether the sign says “exclusive” or not. Naturally, you have the right to your own agent representation, and you should not forego that right. If you plunge into the home buying arena using the seller’s agent, you are setting yourself up to pay more.”
- Use your own Realtor when buying new construction:
“Using the builder’s agent as your dual agent is like using your opponent’s attorney as your attorney, too. It’s folly!”
- Avoid a “no points” mortgage:
“Why would any sane person leave out points, which are income tax deductible, and then pay just as much in lender fees instead?”
- Your bank may try a few tricks:
“Never sign anything or commit to a loan without first reviewing a Good Faith Estimate and getting your questions satisfactorily answered. (And by the way, if you ask what a certain odd-sounding fee is for and get a runaround answer such as, “Oh, that’s just standard,” then beware. You are probably being over-charged.)”
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