How To Avoid New Home Surprises

It just isn't much fun to buy a new home and then discover that snakes are regular visitors in the living room.  And you don't want to move into a house with a leaky roof or a wet basement. Or discover that you picked the worst neighborhood in town - after you buy. To avoid surprises like these when buying a new home, you have to learn about the town, the neighborhood and the house. Here are some ways to do that - before you make that offer.

Your New Town

An online search by city and state (Fresno California) will usually lead you to an official city site, or a chamber of commerce website. These sites can provide a lot of useful information, but they are "selling" the city. For the good and the bad, find a local newspaper online as well. See what going on in town, and check the classified advertising section to get an idea about home prices too.

Detailed statistics on almost every town and city in the U.S. can be found at city-data.com. Click on a state, then find the city you want on the list (it covers towns of 6,000 people or more). You'll find more statistics than you can possibly use, ranging from population, average income, crime statistics, maps, photos and much more.

Visit weatherbase.com for climate information on almost every city in the U.S. Click on a state, choose the city you want, and see how many inches of rain or snow they get each year, how hot or cold it gets, etc. You'll also find a link to the current weather forecast for the town.

Call somebody from the Chamber of Commerce or a local real estate agent. Their phone numbers can be found online at realtor.com or a Chamber Of Commerce website. Make a list of questions, and ask about stores, libraries, jobs, crime and anything else that is important to you. We asked many people in many towns, "Do you own a snow shovel?" before choosing to move to Tucson, Arizona.

Your New Neighborhood

Once you have a local realtor or city official on the phone, ask about the various neighborhoods in town. If they hesitate to label areas as "good" or "bad,", ask more specific questions, like where older parts of town are, and where the most rental units are. If you listen well and read between the lines you should learn something about where you might want to buy a house.

Visit the town before buying a house, of course, and visit a good local bar. Residents there will tell you which employers are about to move in or out of the town, how fast or slow homes are selling, whether there are criminal gangs, and more. But verify what they tell you, since people do sometimes exaggerate a bit. For best results, choose a bar with customers who are most like you (income level, interests, etc.), to get the information most relevant to your needs.

Drive around town. It will help you get a good feel for where you might want to live. Stop to ask questions when you see people out in their yards, and take notes.

Your New Home

Realtor.com has a lot of information on the homes they list. You can search for other real estate listing sites. They won't mention things like whether a house is in an area with scorpions or street flooding, but answers to these questions can also be found on the internet. Google the name of the town and "forum," and if there is one, sign up (they're usually free). Read the posts, and ask about the specific area you are thinking of moving to. People usually respond, as they did when we visited a community forum and discovered that a good cat will take care of scorpions.

When you have a good idea of the problems which might be associated with a certain neighborhood, you know what to ask when you start looking at houses. Carry a home inspection checklist with you when you do look at homes, and work your way through it. Pass on your notes to the professional inspector once you decide to buy a house.

When you're sure you like a home, walk around the area. Find a person or two out in their yards, and talk to them for a few minutes. Ask about noisy neighbors, recent crime and other things that will help you decide if this neighborhood is the right one for you. Do this and take the precautions above and your New Home shouldn't have too many unpleasant surprises for you.

Copyright Steve Gillman. To see a photo of the house we bought for $17,500, get a free ebook on how to buy Cheap Homes, and a free real estate investing course, visit Houses Under Fifty Thousand .com.

Buying A Home - Three Mistakes To Avoid

Buying a home is often a stressful process, because it is usually the single largest purchase of your life. Even if it isn't your first house, it's easy to make a mistake that costs you hundreds or thousands of dollars. Here are three common mistakes to avoid.

1. Paying Too Much

This isn't about over-paying for a particular home. That mistake is tough to make if you will be borrowing to buy. An appraisal will be done, and the lender will probably refuse to lend enough for you to buy an over-priced house.

The common mistake here is following the advice of real estate agents, lenders and even your friends and family, who will often encourage you to buy a more expensive home than you can afford. They may call it an "investment" and claim that real estate always goes up in value, so you should get as much as you can. Of course, recent history shows that home values don't always go up, and this kind of thinking has a lot of families facing foreclosure now.

Buy what you feel comfortable with. If you can't easily make the payments, even after a short layoff from work, you may be overextending yourself. And watch out for lenders "solutions" to this problem (see number 2).

2. Trusting Lenders

I am not suggesting that lenders are all out to get you, or that you should look at them suspiciously, but they are not necessarily looking out for your best interest. That's your job. Their's is to sell loans. Buying a home normally requires buying a loan too, and as we can see now (2008), many loans are not suitable if you want a secure future. While there are sometimes good reasons for interest-only, adjustable-rate, and zero-down loans, most of the time these should be avoided.

Never mind what a lender recommends or suggests. Ask him only for facts, and do your own math. If the rate on your loan goes from 5% to 10%, what will the payments be? Can you easily afford that? If not, you are taking a risk that may not be justified.

3. Trusting Real Estate Agents

When you are buying a home, the real estate agent who helps you, like the lender, has his own agenda. It isn't that he or she doesn't wish you the best, but they wish even more for their own families, so the primary goals is to sell something. Also, unless the agent is explicitly working for you, she has a fiduciary responsibility to work against you if that is what is best for the seller. In other words, if she thinks you will pay more because of a comment you make, she must pass that information on to the home owner.

Even a buyer's agent can be biased. It is nice to think that they are working for you, but they still only get paid (typically) when a sale is made. That's a pretty motivation to push you into a home fast, whether or not it's the best one for you.

Pay attention to whether an agent is really showing you the houses that suit your needs, rather than the ones that he or she would buy. Many real estate agents don't listen very well, and will show you what they think you want, rather than asking you more questions. They can lead you to buy a house that doesn't suit your needs or costs more than you want.

One final note about real estate agents: They are not experts on all things. In fact, some are barely an expert on anything. I have met agents who didn't understand a simple seller-financing offer, and others who suggested that cracks in foundations were "no big deal," though they knew nothing about construction. Unless an agent has specific experience in an area, take what they say with a grain of salt, and seek out other counsel.

Buying a home that is actually right for you starts with avoiding the three mistakes above.