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Linda and Bob Reeder
Eight "Sins" to
Avoid When Buying
a Home in St. Louis
Failing to have a plan
Thinking, "I can't afford a home"
Failing to "properly" select your Realtor®
Failing to get pre-approved for a mortgage loan
Choosing a loan based only on the interest rate
Not obtaining a home inspection from a qualified inspector
Not knowing your rights and obligations
Not making your own inspection.
Avoid these "sins" or it could cost you thousands!
1. FAILING TO HAVE A PLAN: Deciding to buy a home is probably the biggest
financial decision you'll ever make. It's an exciting decision, but it's
serious business, too, and you deserve serious advice. Zig Zigler, a famous
motivational speaker, once said that people don't plan to fail - they fail
to plan. With a game plan, you will eliminate many of the headaches involved
in this complicated transaction. You need a clear plan when deciding to buy
a house. Evaluate your current situation Do you currently own a home? If so,
will it be necessary to sell before making another purchase? Are you
renting? How much time is left on your lease? Do you and your family plan to
use the back yard? What is important about the location of your house? Do
you want to live within 10 minutes or one hour from the office? Make a list
of features which are important in your home. Write down desirable locations
you would consider, an acceptable price range, number of bedrooms and
bathrooms, and any other amenities. Be specific. It is unlikely that you
will find a home that offers every feature you desire; however, without a
wish list, it will be more difficult to recognize a home which meets your
expectations. Provide the information to your Realtor®. Your Realtor® will
look for homes that match your criteria. This will save you time - you won't
need to look at homes that don't fit your needs and desires. A proper game
plan will save you time and reduce the hassle of shopping for a home. Spend
a little time in advance and save a lot of time and money in the future!
2. THINKING, "I CAN'T AFFORD A HOME": Many people feel that they can't
afford a home, but affording a home has never been easier. Mortgage rates
are more flexible today than ever, and the tax laws favor home ownership
like no other tax shelter. Home ownership is a durable (real) investment.
Although no one can say if a specific home will appreciate in value,
generally speaking, the odds favor the home owner. Numerous unique tax
advantages are available to home owners. The thousands of dollars you pay in
mortgage interest is deductible. This tax deduction alone can sometimes make
owning your own home cheaper than renting with after tax take home dollars.
Check with your Accountant, see the dramatic difference that home ownership
will make. Take a look at how you may
qualify for a loan.
3. FAILING TO "PROPERLY" SELECT YOUR Realtor®: It's likely that you don't
often interview people. Yet, in order to find the Realtor® who is right for
you, you may need to interview several. The quality of your home buying
experience is dependent upon your skill at selecting the best qualified
agent(s). It's interesting that in the real estate business, someone with many
successfully closed transactions usually costs the same as someone who is
inexperienced. Bringing that experience to bear on your transaction could
mean a lower price at the negotiating table, buying in less time, and with
the minimal amount of hassles. Your agent should be a skilled win-win
negotiator! Agents make it their business to provide every service connected
with your home search, from expert advice in the early stages through
careful monitoring of your closing. The more closely you work with your
agent(s), the better your needs are known and the more effectively you can be
served. Your agent(s) should have access to the MLS systems - a computerized
system that will assist you in locating the home that fits your needs and
desires. The purchase of your home could well be the most important
financial transaction you have ever made. The agent(s) you select can make it
a satisfying and profitable activity, or a terrible experience. It's your
home. It's your money. Take a look at some of the criteria you should
consider when you are
Selecting an Agent.
4. FAILING TO GET PRE-APPROVED FOR A MORTGAGE LOAN: Don't waste hours
searching for a home that is not in your price range! Save time and money by
pre-qualifying for a loan. Before you go shopping for a home, you need to
determine how much you can afford. Once you are pre-qualified for a
mortgage, you will know what your buying power is - you will save time by
looking only in your price range. This process is simple. A lender will ask
you basic questions concerning your history, run a credit report, and
determine your buying power. You can even get pre-approved for a loan!
Imagine for a moment, if, when you and your Realtor® initially draft your
offer for the home you select, you are already approved for the loan - IN
ADVANCE... No stress, no worrying about qualifying, no concern whatsoever
about your ability to qualify would stand between you and the home of your
dreams. In today's market, a pre-approval can be a powerful negotiating
tool. The old system saw the buyer spending many hours locating the perfect
home, carefully drafting an offer, awaiting acceptance of the offer,
consulting a loan officer, filing the multitude of forms and applications,
and often this was all a waste because, for whatever reason, he was turned
down for the loan. You deserve peace of mind and negotiating power by
getting a pre-approved loan before you make an offer.
5. CHOOSING A LOAN BASED ONLY ON THE INTEREST RATE: We've been told that
a fixed rate mortgage at today's rate is the best mortgage loan. Many
different types of loan programs are available. It is a mistake to think
that just because Uncle Harry got an 8.5 percent 30-year fixed rate you should
get the same loan. You should get together with an expert who can explain
the many different types of loan programs. Each program may have its own
series of special benefits for you and your specific needs. When considering
such an important decision, it is best to explore all possibilities. It may
well be that a fixed rate is the best type of loan program. It may also be
that you can save a significant amount of money by exploring alternative
adjustable programs. A full service lender with relationships throughout the
mortgage industry is a must in today's market. Lenders need the flexibility
of the small business owner with the clout of a large company. Today there
are almost as many different loan programs as there are housing options. A
few considerations are anticipated time in the home, available asset base,
current income situation vs. future income situation, etc. It is wise to
pick a program that fits YOUR lifestyle. Example: If you pay off a loan in
fifteen years versus thirty years you will obviously save a lot of money in
interest expense. It is important to note that this savings is due to
repaying the loan in half the time. The savings is not due to a significant
savings in interest rates. You would expect that there would be a much lower
interest rate since the loan has a quicker repayment and, therefore, a loan
with less risk. The difference in interest rate is not that significant.
Rates on 15 year loans may be 1/4 percent to 3/8 percent better than 30 year
rates. Payments on 15 year loans will be approximately 25 percent higher on
a monthly basis. MYTH: I should go to my bank to get the best loan at the
cheapest interest rate. Typically a commercial bank will own a separate
business entity which shares the bank's name and happens to offer mortgage
financing. But, this does not mean that you will get a special deal just
because you are the bank's client. The bank's mortgage subsidiary has no
special access to your financial records as you might expect. The bank's
mortgage subsidiary must request your financial records from the bank just
as any other mortgage company. Your mortgage loan process will not be
simplified or viewed differently from any other applicant making a request.
The perception of most people who go to their bank's mortgage subsidiary is
that their loan payments will always be made to their bank; thus, all of the
individual's banking needs will be under one roof. Most mortgage
subsidiaries sell their loans on the secondary market and may sell the loan
servicing just as any other mortgage company will. Another important
consideration is that a typical bank mortgage subsidiary works with a small
number of mortgage products. You may not find a wide variety of loan
programs and your loan officer may not have a good comprehension of all the
different programs offered. It is doubtful that they can adequately advise
you as to the best program for your needs. It is possible that you, or the
property you are buying, may need to have special underwriting to approve
your loan application. Just as you should interview your Realtor®, you should
also interview your lender. Not all lenders look after your needs. Select a
lender who is willing to discuss your needs and help you choose the loan
program that is best for your situation, not the best for the Lender!
6. NOT OBTAINING A HOME INSPECTION FROM A QUALIFIED INSPECTOR: A home
inspection reports on the structural and mechanical condition of the home.
After the inspection, you will have the facts you need to make a decision
about buying your home. A well-qualified building inspector who has adhered
to federal licensing standards and is ASHI certified, can spot problems that you might not be able
to see. Expect problems to be clearly explained, and a written report
delivered within a day or two. Most contracts are written conditional on the
outcome of several inspections. These inspections may include several items,
including inspection for wood boring insects, excessive amounts of radon
gas, structural soundness, and the condition of the heating, wiring and
plumbing.
7. NOT KNOWING YOUR RIGHTS AND OBLIGATIONS: Real estate law is extensive and
complex; the contract for sale and purchase is a legally binding document.
An improperly written contract can cause the sale to fall through or cost
you thousands of dollars for repairs, inspections, and remedies for title
defects. You must be certain which repairs and closing costs are your
responsibility. You must know whether the property can legally be sold "as
is" and how deed restrictions and local zoning will affect the transaction.
If there are defects in the title, or if the property is in conflict with
local restrictions, you or your Realtor® must remedy them. Otherwise, you
could lose thousands! We will assist you! We will make sure you understand all
the technical lingo in the sale of your home. A commercial for a local
vendor states that "Our best customer is an educated consumer". How true! It
is our job to know the laws governing real estate transactions. We are involved
in an on-going training program to keep up-to-date with these laws. You
deserve to have an agent who is not only knowledgeable about the transaction
but is also willing to educate you throughout the process so you will feel
more comfortable.
8. NOT MAKING YOUR OWN INSPECTION: You probably would not want to rely
on the seller to point out defects in a house he is attempting to sell.
There may even be hidden problems of which he is unaware. If a major defect is found, you have
the option to cancel the contract and have your deposit returned, bargain
for a lower price to compensate for the cost of repairing the problem, or
have the owner make needed repairs before the sale. Even before you get to
the point of a contract and having a professional inspector look at the
house, there are many items you can check yourself as you are shopping for a
home. Structure - Basement, check the foundation for cracks or water marks.
Floors, are they level? Does the roof sag? Water damage - Look for unevenly
painted ceiling or wall; mildew odor in basement; signs of re-plastering or
re-tiling in just one area of a room. Water pressure - Flush toilet and turn
on both hot and cold water faucets at the same time to test. Plumbing - Ask
what type pipes are installed and their age. If applicable, ask when the
septic system was last inspected and cleaned. Stand near the tank to detect
odor or soggy ground. Wiring - A 100-amp system is typical in modern
construction and uses a one-inch main line; this can be seen leading to the
fuse box. Appliances such as dryer or range require a 220-amp line. Notice
if lights flicker or don't work. Check for electrical outlets . . . usually
at least 2 in each room. Energy efficiency - Ask to check last year's
heating and cooling bills. Pests - Be alert for small accumulations of sawdust in the basement. This
might indicate an insect problem. Ask to see the seller's survey made when
the seller bought the house. Avoid
"surprises" by keeping your eyes open. Be certain that you are clear on
items which convey with the property and repairs which the seller agrees to
make. Have this list with you when you go for your walk-through. You can be
successful in the home buying process. During the entire process you should
remember to buy with "resale" in mind. In short, be alert! Be curious!
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Linda and Bob Reeder provide St. Louis Missouri real estate information and resources in order to assist home owners and home buyers with the process of buying and/or selling their St. Louis home or other residential real estate (house, condo or other property in St. Louis MO). Linda and Bob Reeder are top St. Louis real estate agents and will assist you in getting the best value for your purchase or sale of a St. Louis MO home. Their on-line services include free search of the St. Louis area (includes St. Louis MO homes - St. Louis houses and St. Louis condos) Multiple Listing Service (MLS) with NO REGISTRATION, Email updates on new listings as they become available, and more. They provide you the information to help you learn more about St. Louis condominiums, St. Louis houses, and other St. Louis MO real estate. Bob Reeder is a Graduate, REALTOR Institute (GRI). Linda Reeder is also a GRI and is designated a Certified Residential Specialist (CRS) and Coldwell Banker University Graduate (CBU). Additionally, Linda Reeder is also an Accredited Buyer's Representative (ABR). When you want a top St. Louis REALTOR, Linda and Bob are your best choice. Linda and Bob can help you obtain financial services, professional building inspections, assist you in maximizing your relocation benefits, advise you on how to prepare your home for sale to maximize your selling price, and make your St. Louis home buying or St. Louis home selling process go smoothly and successfully. When you need a Realtor in St. Louis MO, call us. Linda & Bob
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