Seven Steps to Buying a Home
Home ownership remains one of the best investments you'll ever make. Just think, what other investment can you make that will not only give you a solid return on your money but will also be something you use each day?
If you are looking at buying a home, here are the seven basic steps to follow:
- Pinpoint your target. Decide where you want to live. Consider things such as commuting time, quality of schools, and proximity of stores and services. If you limit your hunt to one or two areas, you'll be able to keep closer track of available properties. Talk to people who live in that area or pick up a local newspaper to find out more about what's going on there.
- Get pre-qualified for a mortgage. This way you will know your price range and how much of a down payment you're going to need. You will also be able to move fast if you find the right property. Finally, you’ll learn in advance if there will be any hitches in securing a mortgage.
- Start shopping. Be prepared to run into a lot of real estate agents. It's important to know that agents represent the seller and not you, the buyer, unless you've hired someone specifically for that purpose. So buyer beware! Open houses are usually held on Sundays, but don't hesitate to ask for a private viewing. Read the classified ads and drive through the neighborhoods that interest you and look for "For Sale" signs.
- Ask lots of questions. Agents should be able to answer most of your questions but always ask for the seller's disclosure, which is a document on which sellers must list whatever defects they are aware of in the home. It may also show the age of the roof, furnace, and other critical parts of the house. Ask the agent for "comps," statistics which compare what other houses in the neighborhood have sold for. Check your library for books on home buying and home repair. The more you know, the better the decision you can make!
- Now get that mortgage. Even if you've been pre-approved, you can still shop for a better deal on your mortgage. You might play it safe by staying with the company that pre-qualified you, but if your credit is sparkling, it'll be easy to shop around.
- Get an inspection. Municipalities often issue "certificates of occupancy," but these are based only on limited criteria. A professional inspector is like a detective and may unveil problems you can't spot. If you are unhappy with the home after the inspection, you may be able to get out of the deal without suffering any financial loss.
- Close on your mortgage. The closing is where you sign all the papers, take legal possession of the property, and become indebted for your mortgage. Again, don't be afraid to ask questions. You're signing a legal contract, and you definitely want to know what you're getting into before signing all those forms. You may have an attorney with you at closing, although most people don't want to go the extra expense. If you want to be a little more careful, you can try to have a lawyer look over the papers in advance.
You seek the expertise of CPAs at tax and audit time, of course. But CPAs also promote personal and professional financial security year round. Visit the CPA Referral Service on the MACPA Web site to search for a CPA in your geographical area or specific area of expertise.
This article was submitted by the Michigan Association of CPAs (www.michcpa.org).