|
Tip #1: Proactive Research Is The Key To
Discovery
Home sellers don't just pick up the phone and
call you with a maintenance-free home with an excellent mortgage.
Reading available real estate information
materials, talking to friends and experts, and
investing your time wisely by viewing a variety of Pacific Palisades homes on the
market and researching the schools & neighborhoods is the best
way to realize the American dream.
Tip #2: Make A Plan And Get Pre-Qualified
Every important decision needs to be clearly
thought out. Developing a Pacific Palisades home buying plan can help you focus on
the important factors and organize the entire process. You may even
want to use a binder with sections on house hunting, Pacific Palisades home
financing,
service providers, etc. Loan pre-qualifying helps you determine the
home price you can afford and presents you as a genuine prospect to
the seller. A lender typically uses the 28% formula (your monthly
mortgage can't exceed 28% of your monthly income) in approving your
loan. Planning your actions and getting pre-qualified will keep
you out of the panic mode and allow you to take advantage of opportunities.
A thorough plan will save both time and money!
Tip #3: Value, Value, Value
The days of 10-30% annual appreciation
still exist. Home buyers in the 1990's benefited
tremendously from what seemed like ever appreciating home prices,
now we are seeing growth along the same lines.
Nowadays, you're looking at stable growth while guarding against the
possibilities of falling prices, low interest rates and corporate
layoffs that can dramatically affect your Pacific Palisades home values. The classic
rule of buying the worst house in the best neighborhood still
applies. If you buy with an eye towards improvement, you can
customize the Pacific Palisades home to fit your needs. The saying, "make money buying
a Pacific Palisades home, not selling one," should keep you focused on the long-term
importance of the purchasing price.
Tip #4: Create A Top 10 List of Amenities
When shopping for a home, list the features
(fireplace, fenced-in yard, new appliances, etc.) that are most important
to you in deciding on which home to buy. Establishing "your criteria"
early on will save time shopping for inappropriate homes and may keep
you from buying a home on a whim -- for example, because of a circular
stairwell -- that doesn't meet your fundamental requirements. As detailed
in Tip #3, your top reason for buying a home should be the value you
are getting. Some of your top 10 amenities should logically be sacrificed
if an incredible value is available.
Tip #5: Fixed vs. Adjustable Rate Mortgages
Which type of loan fits your particular needs?
If this will be your first Pacific Palisades home or a "transitional home" -- one you
plan to own for a short time, an ARM may be the best type of loan. If
it's going to be your dream home or one you plan to raise a family in,
then you may want the stability of a fixed rate mortgage. If you choose
an ARM, the index should be based on the Cost of Funds Index if rates
are increasing, and Treasury Bills if they are decreasing. The COFI's
are less volatile over time than T-Bills; make sure the teaser rate
is understood and what the real rate would be.
Whichever loan you choose, make sure that you
scrutinize all the closing costs. If you are required to have a
mortgage escrow account and private mortgage insurance, make sure you
understand the terms and cancellation procedures. Also, make sure there
are no prepayment penalties so that you can utilize an accelerated mortgage
plan. A good mortgage reduction plan can save you tens of thousands
in interest costs, and shorten your loan term, with only small extra
principal payments. If you experience negative changes in your job,
health, or marital status, you can revert to the standard payments in
your mortgage contract.
View Homes with Photos
Tip #6: Sign A Contract That Protects
You
Make sure that the contract you put on a house
allows you to arrange financing, inspect the home and negotiate any
problems that you uncover. Ensuring that the contract you sign will
minimize potential legal battles will let you swim in your new pool
with your family and neighbors instead of with the sharks.
Tip #7: Put Yourself In The Seller's Shoes
You are about to make one of the most important
decisions that will affect both your life and the life of the seller.
If you take time to understand the reasons the seller bought the Pacific Palisades home, their reasons for selling, and the
Pacific Palisades home improvements they have
or have not made, you'll be in a better position to evaluate the Pacific Palisades home
and negotiate a better deal. In the end, the home buying process
excludes the professionals and comes down to the individuals buying
and selling the home. A closer look at the seller may help you in deciding
whether and for how much to buy a particular home.
Tip #8: Develop A Mortgage Shopping Chart
One of the biggest decisions to make before putting
a contract on a home is how to finance the purchase. There are 10,000
lenders competing for your mortgage business. The days of simply walking
into the community bank and negotiating with the loan department manager
are over. Today, you can apply for a loan over the Internet or even
use a mortgage broker to shop for your loan with hundreds of lenders.
When choosing a lender, you want to avoid apples to oranges contrasts
by comparing fixed rates to fixed rates, not fixed to ARM's. Create
a chart that lists different types of loans, fees, and at least five
mortgage providers (including a mortgage broker).
Tip #9: Get A Quality Pacific Palisades home
Inspection
Although it is hard to believe, more people pay
for inspections before buying used cars than when making the biggest
investment of their lives -- their Pacific Palisades homes. Paying for a qualified
Pacific Palisades home inspection before you buy a home isn't just spending "a little
extra" for peace of mind; it's absolutely essential for anyone who doesn't
want to spend thousands of dollars for repairs.
Tip#10: Peace
of Mind: Home Protection Plans
To protect both yourself as a buyer, as
well as the seller, it is a good idea to purchase a home protection
plan. What exactly is it? A home warranty, or
Pacific Palisades home protection
plan, is a service contract, normally for one year, which protects
Pacific Palisades homeowners against the cost of unexpected repairs or replacement on
their major systems and appliances that break down due to normal wear
and tear. A negotiable contract between the buyers and sellers
which do not overlap or replace homeowner's insurance policy, this type
of warranty can save the new homeowner lots of headaches, as well as
put seller's fears to rest. The warranty covers mechanical breakdowns,
while insurance typically repairs the related damage, for example: if
a hot water heater burst and destroyed a wall in your home, the warranty
would repair the water heater and your insurance would pay to fix the
wall.
Information provided by
The American Homeowners Association, Copyright© 1998
|
