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TIPS ON HOME BUYING
New and Used Vehicle Buying
Seven Tips on Home Buying
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.
This article was submitted by the Michigan
Association of CPAs.
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Home Inspection FAQ
What is a "home inspection"?
A home inspection is an objective visual examination
of the physical structure and systems of a home, from
the roof to the foundation. Having a home inspected
is like giving it a physical checkup. If problems or
symptoms are found, the inspector may recommend further
evaluation.
What does it include?
The standard home inspector's report will review the
condition of the home's heating system, central air
conditioning system (temperature permitting), interior
plumbing and electrical systems; the roof, attic, and
visible insulation; walls, ceilings, floors, windows
and doors; the foundation, basement, and visible structure.
Why do I need a home inspection?
The purchase of a home is probably the largest single
investment you will ever make. You should learn as much
as you can about the condition of the property and the
need for any major repairs before you buy, so that you
can minimize unpleasant surprises and difficulties afterwards.
Of course, a home inspection also points out the positive
aspects of a home, as well as the maintenance that will
be necessary to keep it in good shape. After the inspection,
you will have a much clearer understanding of the property
you are about to purchase.
If you are already a home owner, a home inspection
may be used to identify problems in the making and to
learn preventive measures which might avoid costly future
repairs. If you are planning to sell your home, you
may wish to have an inspection prior to placing your
home on the market. This will give you a better understanding
of conditions which may be discovered by the buyer's
inspector, and an opportunity to make repairs that will
put the house in better selling condition.
What will it cost?
The inspection fee for a typical one-family house varies
geographically, as does the cost of housing. Similarly,
within a given area, the inspection fee may vary depending
upon the house’s size, particular features, and
age. The inspection fee may also vary if additional
services, such as septic, well, or radon testing, are
requested. It is a good idea to check local prices on
your own.
However, do not let cost be a factor in deciding whether
or not to have a home inspection, or in the selection
of your home inspector. The knowledge gained from an
inspection is well worth the cost, and the lowest-priced
inspector is not necessarily a bargain. The inspector's
qualifications, including his experience, training,
and professional affiliations, should be the most important
consideration.
Can’t I do it myself?
Even the most experienced home owner lacks the knowledge
and expertise of a professional home inspector who has
inspected hundreds, perhaps thousands, of homes in his
or her career. An inspector is familiar with the many
elements of home construction, their proper installation,
and maintenance. He or she understands how the home's
systems and components are intended to function together,
as well as how and why they fail.
Above all, most buyers find it very difficult to remain
completely objective and unemotional about the house
they really want, and this may affect their judgment.
For the most accurate information, it is best to obtain
an impartial third-party opinion by an expert in the
field of home inspection.
Can a house fail inspection?
No. A professional home inspection is an examination
of the current condition of your prospective home. It
is not an appraisal, which determines market value,
or a municipal inspection, which verifies local code
compliance. A home inspector, therefore, will not pass
or fail a house, but rather describe its physical condition
and indicate what may need repair or replacement.
When do I call in the home inspector?
A home inspector is typically contacted right after
the contract or purchase agreement has been signed,
and is often available within a few days. However, before
you sign, be sure that there is an inspection clause
in the contract, making your purchase obligation contingent
upon the findings of a professional home inspection.
This clause should specify the terms to which both the
buyer and seller are obligated.
Do I have to be there?
It is not necessary for you to be present for the inspection,
but it is recommended. You will be able to observe the
inspector and ask questions directly, as you learn about
the condition of the home, how its systems work, and
how to maintain it. You will also find the written report
easier to understand if you've seen the property firsthand
through the inspector's eyes.
What if the report reveals problems?
No house is perfect. If the inspector identifies problems,
it doesn't necessarily mean you shouldn't buy the house,
only that you will know in advance what to expect. A
seller may adjust the purchase price or contract terms
if major problems are found. If your budget is tight,
or if you don't wish to become involved in future repair
work, this information will be extremely important to
you.
If the house proves to be in good condition,
did I really need an inspection?
Definitely. Now you can complete your home purchase
with your eyes open as to the condition of the property
and all its equipment and systems. You will also have
learned many things about your new home from the inspector's
written report, and will want to keep that information
for future reference.
How do I find a home inspector?
The best source is a friend, or perhaps a business acquaintance,
who has been satisfied with and can recommend a home
inspector they have used. In addition, the names of
local inspectors can be found by searching the American
Society of Home Inspectors® database or in the Yellow
Pages where many advertise under "Building Inspection
Service" or "Home Inspection Service".
Real estate agents are also generally familiar with
the service, and should be able to provide you with
a list of names from which to choose.
Whatever your referral source, you will want to make
sure that the home inspector is a Member of the American
Society of Home Inspectors (ASHI®) in order to be
certain of his or her professional qualifications, experience,
and business ethics. A list of ASHI Members in your
area is available upon request from the Association's
headquarters.
What is the American Society of Home Inspectors?
The American Society of Home Inspectors (ASHI) is the
oldest and leading non-profit professional association
for independent home inspectors. Since its formation
in 1976, ASHI's "Standards of Practice" have
served as the home inspector's performance guideline,
universally recognized and accepted by professional
and government authorities alike. Copies of the Standards
are available free from ASHI.
ASHI's professional Code of Ethics prohibits Members
from engaging in conflict of interest activities which
might compromise their objectivity. This is the consumer's
assurance that the inspector will not, for example,
use the inspection to solicit or refer repair work.
In order to assist home inspectors in furthering their
education, ASHI sponsors a number of technical seminars
and workshops throughout the year, often in cooperation
with one of its nearly 50 Chapters. ASHI also serves
as a public interest group by providing accurate and
helpful consumer information to home buyers on home
purchasing and home maintenance.
Who belongs to ASHI?
Members of ASHI are independent professional home inspectors
who have met the most rigorous technical and experience
requirements in effect today. To become an ASHI Member,
an inspector must pass two written technical exams,
have performed a minimum of 250 professional fee-paid
home inspections, and maintained his or her candidate
status for no less than six months. ASHI Members are
required to follow the Society's Code of Ethics, and
to obtain continuing education credits in order to keep
current with the latest in building technology, materials,
and professional skills.
This article was submitted by the American Society
of Home Inspectors, the national professional organization
of home inspectors whose mission is to meet the needs
of its membership and promote excellence and exemplary
practice within the profession. The American Society
of Home Inspectors was formed in 1976 as a not-for-profit
organization to build public awareness of home inspection
and to enhance the technical and professional performance
of home inspectors. Submission of this article does
not imply an endorsement or recommendation of the Financial
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