Tuesday, January 24, 2012

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The Secret to Home Buying in 2012

The truth is that there really isn't a secret to home buying in 2012 or any other year, but there are five tips I recommend you read before taking the plunge, especially in this new world of post bubbles and bailouts.

The Internet is your best friend, seriously. Your next best friend is your Realtor.

The 2012 market remains in favor of the buyer. Inventory is high, prices and interest rates are low. Maximize your time and gas money by using websites that synch with your local MLS (Multiple Listing Service) and be sure to hire and consult with a real estate agent when making a home purchase. It costs nothing for buyers to hire representation, because the seller pays the bill.

Get your financial house in order, first.

Today, lenders have strict qualifying guidelines for buyers, and it's important you know what those are, before you fall in a love with a house you can't get an approval for. Talk to a mortgage broker about current requirements for a loan and then get a list of fees associated with the home buying process. Weight those against what you have in the bank. If you have money in the bank and great credit, buying a house won't be a problem. If not, you might be waiting until 2013, or later.

Scope out foreclosures, but do it responsibly.

Foreclosure are (and probably always will be) remarkable deals. However, deal or not, foreclosures are rarely in tiptop shape. When visiting a winterized foreclosure (when the heat and water are switched off) make sure to get those services turned on and make sure those services are in working order before committing to a purchase. Foreclosures do not require banks to disclose material defects, meaning that the buyer should approach (and buy) with extreme caution.

Don't forget about short sales.

If the prospect of a foreclosure lemon makes you a little nervous, consider a short sale as an alternative. While short sales are anything but short when it comes to wait time, closing and nearly everything else, they make up for it in price. In 2012, short sales will continue to be a steal for all buyers who have a salubrious helping of staying power.

Don't skimp on the home inspection.

No matter if it's a foreclosure, short sale or your garden-variety real estate transaction, never forgo an independent inspection. The $300 to $400 you invest in getting one -- even when you are buying brand new homes-- saves you money now and more money later on.

The home buying game hasn't changed too much from prior years. There is now world ending difference in 2012, any more than there was in 2011. However, the rules of home buying are getting tighter and more complex by the day, meaning that waiting too much longer to take the plunge into home ownership might not be the brightest move. Buy now, but buy responsibly.