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Finding the house
of your dreams is a cinch if you have the money. You can buy where you want, the
size and style you want, you can even tear it all down and remodel how you want.
"I've taken out pristine, custom-built $100,000 kitchens to replace them with
pristine, custom-built $150,000 kitchens that looked a little different," said
John C., a building contractor from Marina del Rey, California. "Not that they
seemed like the kind of people who spent much time in a kitchen anyway."
Staying within
your means
For the rest of us, buying a home is a knotty process of
checks and balances. Ironically, at a time when we most need our wits about us,
facing such an onslaught of big decisions can get emotional. The key is to
define the logic in every choice. If you live anywhere near a major metropolitan
market, you already know that $100,000 or even $200,000 doesn't buy much, and
certainly no dream house. According to figures released this week by Data-Quick
Information Systems, Inc., it is the sales of modest homes in lower-priced
neighborhoods that are driving overall median price increases. In Los Angeles
County, for example, home values jumped by 17 percent in July, which amounted to
a gain of $33,000 over last year according to Data-Quick. Most of the activity
was in low-end sales. High-end prices everywhere are said to be more dependent
on a strong stock market.
Clearly everybody's
got to start somewhere, but no matter which end of the market you're entering,
the objective is to stay within a payment you can afford on a 30-year fixed-rate
mortgage. This is why an agent should show you only houses in or below your
price range. Otherwise, you may tease yourself into an unmanageable financial
burden.
Looking for a
bargain?
Some experts recommend you time your search to fit the seasonal
changes of the market if resources are low and you really need a bargain. If
you're truly motivated to get more house for your money, timing and hard work do
make a difference. The sale of homes from January to December follows a
traditional bell pattern. Sales are slow at the start and at the end. Sellers
know their homes don't look good in the dark of winter, plus no one really wants
upheaval during the holidays. Often houses on the market off-season must be sold
because of divorce or family loss, otherwise the seller would wait for a better
time. The peak of home buying occurs around May or June, an ideal time to move
for those with children in school, but it can often be the worst time to buy.
Other buyers are highly motivated and are usually working to a
schedule.
Foreclosures
If a house is advertised for sale "as-is" or as a
foreclosure, it can sometimes turn out to be a bargain. Usually this type of
home is sold directly by the lender. You can even call local lenders and ask
whether they handle foreclosed properties. All foreclosure notices are posted in
the county courthouse. It is imperative to do a title search on a foreclosure to
rule out the presence of liens against the property or a debt in back taxes
because these obligations will transfer to the buyer. Foreclosed properties may
not have been well maintained so a careful preinspection is crucial to ensure
costly repairs are not required.
How to
search
If you'd rather avoid the hassle and uncertainty of
bargain-basement hunting, the search for a house is fairly straightforward.
Driving through appealing neighborhoods is a great start. Pick up the flyers
from the "For Sale" posts. Your real estate agent can then deliver more thorough
information from the MLS service. Each property listed there shows information
about the age of the house, the square footage, size of rooms, property taxes,
utility bills, and so on. While you can expect much advice and background
information from your agent, do your own homework to learn what people have been
paying for the various types/qualities/sizes of houses in the neighborhoods
you're searching. In a tight market you may have to work fast, but make sure you
look at a lot of properties to gain perspective.
- Audrey Arkins,
Salary.com contributor
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