Buying a home, these tips will help.

Without a doubt, buying a house in Chicago or anywhere else is an exciting prospect. But those that go into it without really knowing what they’re doing quickly find out (the hard way) that it is a long, often tough process, not just an extremely expensive shopping spree. But are you sure you’re ready buy a home? Think you’ve got what it takes? Before you head down to the realtor’s office, ask yourself these few questions:

  1. Do you have a steady source of income? Have you been employed on a regular basis for the last 2-3 years? Is your current income reliable?
  2. Do you have a good record of paying your bills?
  3. Do you have few outstanding long-term debts, like car payments or student loans?
  4. Do you have money saved for a down payment?
  5. Do you have the ability to pay a mortgage every month, plus additional costs?

If you can answer “yes” to these questions, you are probably ready to buy your own home. Congratulations! Now to choose one – the right one. Everyone’s sure to have an idea in their heads as to what they want and where, but there are other things that need to be brought into consideration. Even the terminology can be hard to understand; if you come across terms you’re not familiar with, fear not: a “home buying glossary” has been added at the bottom of our guide. Now, take a look at some of the tips, ideas, and reminders that VirtualChicagoLand has put together to help you make the right decisions when you begin your search for a new home.

  • If you have to resell soon, don’t buy an unusual home. They can be easier (and cheaper) to acquire, but hard to get rid of. Buying a house whose style is uniquely individual will probably minimize rather than maximize its resale value because the house will appeal to a somewhat more limited number of potential buyers.
  • Even if the quality of a school district doesn’t matter to you now, try to remember that it might someday to another buyer.
  • Expect lower maintenance costs with a brand-new home. Conversely, older homes may need work done immediately, which can add up to a lot – especially on top of a new mortgage.
  • Never tell a seller’s broker how much you’ll raise your offer for a particular house. That’s just common sense, but it happens.
  • When interest rates are low, opt for a fixed mortgage.
  • Pay attention to floor plans. Changing layouts of rooms later can be costly. This happens more than one might imagine, especially when a couple starts having kids and when the kids get a little older.
  • When you buy a home, you can deduct on that year’s tax return points paid by either party on the purchase of your own residence.
  • If the present owner has a title insurance policy less than 3 years old, you could have substantial savings by buying a reissue of that policy rather than a completely new one.
  • Pay attention to the original listing date of the homes you inspect. Sellers tend to be more flexible in the price the longer the home is on the market.
  • A house that’s sited to take advantage of the sun, the wind, and the local typography costs less to heat and cool and can save thousands of dollars over the years in utility bills. Few people think of this, and designing a house with this in mind is a relatively new practice. But it really is something to keep in mind.
  • If you think you may need more space in the near future, be sure the house and lot will allow for expansion.
  • Redoing a kitchen is likely to be expensive. Be sure of what you need and want before you buy.
  • Don’t buy a house with foundation problems. Although most foundation problems can be corrected, repair work is usually EXTREMELY expensive.
  • Before you buy a house that may have a wet basement problem, get a good unbiased diagnosis from a professional with moisture control experience. The solution could be costly.
  • A roof that complements the style of a home and is carefully maintained adds to the home’s visual appeal and its resale value. Though it sits on top of the house, the roof is noticed more than people realize.
  • A light-colored roof reflects heat and is best in areas where air-conditioning is the greater energy user. In colder weather climates, a dark roof is preferable because it absorbs more heat. In temperate climates, a middle-range shade is best.
  • The three most popular wall choices are brick, wood siding, and stucco. About half of all home shoppers prefer brick for exterior walls; about one-third prefer wood siding; and about one-fifth prefer stucco. Ironically, stucco is usually not a worthwhile choice, as it cracks easily (hit baseballs, falling limbs, etc.). This allows moisture and insects into your inner wall.
  • Wood floors suggest warmth, quality and good taste; they are an asset when it comes time to sell a house.
  • Most home shoppers prefer a combination of ceramic tile and vinyl wallpaper as a covering for bathroom walls, creating a positive effect on the house’s resale value. Ceramic tile is usually installed wherever water comes in contact with the wall.
  • Plant deciduous trees, shrubs and vines on south and west sides of the home to provide shade in the summer and sunshine in the winter. Remember trees enhance the beauty and value of a lot and house.

So, after hours of after-work and weekend searching, you’ve weighed all the smart pros and cons and found the perfect home for you and your family: its time to buy.

Unfortunately, you’re not alone. People are buying homes left and right, and the top-drawer homes and areas are going to be popular. Its time to make an offer. With available homes diminishing daily and multiple offers being extremely common, it is of great importance that you position yourself to have the “Best Chance” to get your offer accepted. To enhance your chance of getting the home of your choice remember to do the following:

Get pre-approved for the purchase:

This takes very little time and is a great asset. At this time, identify the price range for which you qualify and which fits your lifestyle.

Submit a strong competitive offer:

Submit the offer as if there will be multiple offers; it is almost guaranteed that there will be.

Include substantial ‘earnest money’ deposit:

Acceptance of an offer is sometimes determined by the amount of the deposit. A larger amount may signify a bigger commitment to the seller.

Minimize or eliminate contingencies:

The fewer contingencies, the stronger the offer.

Make a buyer profile available:

How much time you’re on the job, your flexibility, your reason for purchasing seller’s home, etc. The easier you make it for the seller, the better off you’ll be.

Be prepared to preview a new property quickly:

Homes sell sometimes in hours. Be prepared to make decisions quickly and be accessible to change the terms instantly.

CONGRATULATIONS! Your offer’s been accepted. Now you need to cough up the dough. If you haven’t already gotten all your financial ducks in a row, you’ll have to speak with a lender. When you do, there are important things you should know. Make of these questions for your lender:

  • Are both fixed-rate and adjustable mortgage loans available?
  • What is the interest rate?
  • How long can I “lock-in” the financing at the current interest rate?
  • Is a float down lock available in case rates drop after I have locked in?
  • What are the other fees a lender may charge me in conjunction with my loan?
  • Are funds for a second mortgage available?

On adjustable loans:

  • How often will the interest rate be adjusted?
  • Is there a maximum limit on each rate change?
  • How often will the monthly payment be adjusted?
  • Is there a ceiling on payment adjustments?
  • Can the term of the loan be extended?
  • What is the maximum rate that can be charged over the life of the loan?
  • Is there any potential for negative amortization?
  • Is there a pre-payment penalty clause? This involves extra charges for paying off the loan before maturity. About 80% of all loans in the United States are paid off early.
  • What is the “grace” period? How late can a monthly payment be made before a late charge is assessed? What will happen if a payment is missed?
  • If you sell your house, will the new buyer (if he/she qualifies) be able to assume your mortgage at the same interest rate?
  • Do you have to pay “points” to get your new mortgage? Usually lenders charge points for the cost of giving you a mortgage loan. A “point” is 1% of the loan.
  • Will the lender require mortgage insurance?
  • Is the loan serviced locally or is the servicing sold?
  • Ask for a written “good faith deposit”.Its true that all this can make the idea of buying a house daunting, but don’t worry – people do it every day. This is just a guide to help you do it the right way. With a little knowledge and the right attitude, in the search and acquirement of a new home can be an exciting adventure. Good luck!