Cindy in Louisville

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Buyer's Faq

What is the first step in buying a home?

Finding out what you can afford is one of the first steps, which can be done by pre-qualifying for a home loan. This step will help you narrow your search for both a neighborhood and particular houses. A pre-qualification is a simple calculation that considers several factors, but primarily your income. There are no guarantees with a prequalificaiton, but it will be expected of you when you make an offer on a home.

What's a Home Inspection?

A home inspection is when a paid professional inspector -- often a contractor or an engineer -- inspects the home, searching for defects or other problems that might plague the owner later on. They usually represent the buyer and or paid by the buyer. The inspection usually takes place after a purchase contract between buyer and seller has been signed.

How do appraisers estimate value?

Appraisers use several factors when estimating a home's value, including the home's size and square footage, the home's condition and quality of the neighborhood, comparable local sales, pertinent historical information, past sales performance and indicators that forecast future value. For more information on standards, contact the Appraisal Institute at 875 N. Michigan Ave., Suite 2400, Chicago, IL 60611-1980; (312) 335-4458.

Can you buy homes below market value?

Most experts agree it takes a lot of determination to find a real "bargain." There are a number of ways to buy a bargain property:

- You can buy a home that needs repair in a neighborhood that is in transition, and improve it. Then keep it or resell it at a higher price.

- After careful research, you can buy a foreclosure property. Consider buying a house due to be demolished, and moving it to a new lot.

-You can buy a partial interest in a piece of real estate or buy a leftover house in a new-home development. 


Are new or previously owned homes a better investment?

Buying into a new-home community may seem riskier than purchasing a house in an established neighborhood, but any increase in home value depends upon the same factors: quality of the neighborhood, growth in the local housing market and the state of the overall economy.

According to a survey by the National Association of Realtors, resale homes do have an edge over new homes. The group's figures show the median price of resale homes increased 4.3 percent between 1999 and 2000, compared to 2.8 percent for new homes in the same period.

Is the price of a new home negotiable? 

It can be difficult to negotiate the sales price with a developer because they may claim their prices are based on fixed construction costs. But it doesn't hurt to try. Experts say builders more likely to be flexible on price at the very beginning and the very end of a development project. Early on, most developers want to move people in quickly so the project picks up momentum. Later, developers may be more inclined to accept lower offers when only a few units remain.

If negotiating the price doesn't work, buyers commonly negotiate for better amenities (upgrade carpet, light fixtures, etc.) or lot location. Experts say a developer will rarely pass up a deal over a couple hundred dollars' worth of carpeting, for example.

What are closing costs?

Closing costs are the fees for services, taxes or special interest charges that surround the purchase of a home. They include upfront loan points, title insurance, escrow or closing day charges, document fees, prepaid interest and property taxes. Unless, these charges are rolled into the loan, they must be paid when the home is closed.

What are standard contingencies in an offer?

Most purchase offers include two standard contingencies: a financing contingency, which makes the sale dependent on the buyers' ability to obtain a loan commitment from a lender, and an inspection contingency, which allows buyers to have professionals inspect the property to their satisfaction. 

As a buyer, you could forfeit your deposit under certain circumstances, such as backing out of the deal for a reason not stipulated in the contract. The purchase contract must include the seller's responsibilities, such things as passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.

Do I need a home inspection?

Yes. Buying a home "as is" is a risky proposition. Major repairs on homes can amount to thousands of dollars. Plumbing, electrical and roof problems represent significant and complex systems that are expensive to fix.

How do I find a home inspector?

Your realty agent is one source. But keeping them independent from the agent may be a good idea. Inspectors are listed in the yellow pages. You can ask for referrals from friends. Ask for their credentials, such as contractor's license or engineering certificate. Also, check out their references.


About Cindy

Cindy Albright-Parrish, Realtor

A Kentucky native and graduate of the University of Kentucky, Cindy's experience and familiarity with Louisville have been the foundation for a successful real estate career. She holds the real estate certifications of ABR, SRES, CRS and GRI