There are some definite "red flags" to look for when considering a home to purchase, most of which can be identified by following the advice of a buyer's agent, researching options, and conducting inspections on a home.  By learning what to look for, you can avoid these common red flags and successfully purchase the home of your choice.  Some of the most common red flags are described below.

 

Location.  Identify traffic patterns, commercial businesses, and schools near the home you are interested in to make sure that they are agreeable to you.  Although purchasing a home that is in a high traffic area can potentially save money as homes in such areas are usually less than homes on quiet streets, it will have an impact on the value of the home when you sell it.  Regarding commercial businesses near the home, look for business that are quiet and have normal operating hours.

 

Sloping Floors.  Be cautious of homes that have sloping floors as that is an indicator of some sort of structural problem or a settling issue.  Both of these types of problems can be corrected, but usually at a high cost.  It is best to have a structural engineer inspect the home and provide you with their assessment.

 

"AS IS" Properties.  "AS IS" is a real estate term that is used in the description of the property.  The definition of it is that the owner of the home being sold will not make any repairs or corrections to it.  AS IS properties are a red flag for home buyers who want to move into a home that is "move-in-ready" and requires little or not repairs prior to moving in.  AS IS homes usually are either run down, out dated, or in need of some sort of repair.

 

Bank Owned Properties.  If the home you are interested in is owned by a bank or a foreclosed on home, it is best to hire a buyer's agent who is a specialist in dealing with foreclosures.  The process for purchasing these homes is different than purchasing from an owner-occupant, so it is critical you have an expert working on your behalf.

 

Short Sale Properties.  A short sale is when the owner of the home is negotiating with their mortgage holder to take less than what is owed on the home as payment in full.  Again, like bank owned properties, homes that are sold as a short sale follow a different process than a normal real estate transaction, so it is best to hire a buyer's agent who specializes in managing short sale transactions. 

 

By understanding what to look for as a red flag, you will be able to make a confident choice in homes.  Use the internet to seek out additional red flags, such as these sites: 10 biggest home-buying mistakes and Buying A House: Some More Problems To Watch Out For. 

Making the decision to jump off the merry-go-round of renting can be easy if one follows a few relatively simple steps.  The hardest step is making the commitment to saving money and paying off debt so that credit reports are in excellent condition.  There are even first time home buyer down payment assistance programs available to those who conduct research and become knowledgeable on what is available.

 

The first step in saving money is to create a monthly budget of income and expenses.  In order to save, create a budget "line item" titled "HOUSE DOWN PAYMENT."  If possible, save a certain percentage out of every pay check or invoice, such as 10 or 20 percent.  Contact your employer to have the percentage automatically deposited into a special savings account and it will occur consistently.

 

A fun article to read is:  How to Save Money Every Month.  It recommends some unique, creative ways to save money on a monthly basis.  Utilize the budget to track additional savings so that the extra money will be identified and placed into the down payment savings fund.

 

Learn about first time homebuyer assistance programs, such as HUDs American Dream Down payment Initiative, so that you will have a good understanding of exactly how much of a down payment you will need.  Contact and meet with a mortgage lender as they are experts in loan programs and down payment assistance programs.

 

Jump off the merry-go-round of renting and paying someone else's mortgage.  Set a budget, save money for a down payment, learn about loan programs that are available so you fully comprehend how much money is necessary to acquire.  By setting up a plan of action, home ownership will soon be a reality.

Knowing when is the best time to by a home can be understood by determining a few essential factors.  It is advisable to consult with a real estate agent who is knowledgeable of the location you are interested in buying a house.  A quality buyer's agent will be proficient in a specific area, or areas, and will be able to provide you with invaluable information and services.

 

A good place to start gathering information on the real estate market is to look at statistics.  For example, this website, Housing & Economic Indicators, was established by the National Association of Realtors to disseminate statistical data on the housing market so that realtors and consumers could be educated on real estate indicators.  You may want to study this information and discuss it with your buyer's agent.

 

A buyer's agent is a realtor who specifically helps people who want to purchase a home.  They are an invaluable asset when it comes to buying a home.  A buyer's agent will assist in answering your questions, educating you on options, and developing a strategic plan of action for helping you determine when a good time to buy is.  After meeting with a buyer's agent, they may recommend you wait to purchase based off of what you want, how much money you have, and how much of a loan you can be approved for. 

 

There are always good homes at affordable prices.  The most important issue when determining whether or not it is a good time to buy a home is understanding your own budget and purchasing within your means.  For additional information this website will help you, and your buyer's agent, answer this question in more detail:  Should Your Buy a Home Right Now?

Most people purchase a home with the knowledge that some day they will need to sell it. Over time, there are some specific actions that can be done to the home in order to keep its value high. The following are five recommendations to assist you in making the best choices regarding your home's value.

1.  Keep all exposed wood scraped, caulked and painted. Exposed wood rots easily and can cause hidden damage behind soffits and siding. Be sure to compliment the home by choosing good paint that is neutral in color.

2.  Inspect water drainage on a regular basis around the foundation of the home. The biggest and one of the most expensive problems a home can have is poor drainage. It is best to have a good gutter system on the home so that rain water can run off effectively and be moved away from the foundation of the home. Water that drains near the foundation causes pressure on it and will most likely result in foundation problems. For additional information on keeping your foundation in good condition, go to this helpful article: 9 Tips for Maintaining a Home's Foundation

3.  Add complimentary, easy to maintain, landscaping to the yard. It is a good idea to plant trees that flank the home instead of placing them directly in the middle. By flanking them, the home appears larger. You could also use landscaping stones to create curving lines that flatter the lines of the home.

4.  Bathrooms and kitchens are the two most expensive rooms to update in a home, but they add the most value to a home. Simple upgrades can be made over time, such as replacing vinyl flooring with ceramic tile, refinishing or replacing the cabinets, or putting in a more modern countertop and/or sink.

5.  By updating light and faucet fixtures, a room can have the appearance of being remodeled with a minimum of expense. Again, over a period of time, outdated fixtures can be replaced with newer, more modern looking ones. Be sure to have the light fixtures match so that they aesthetically add appeal to each room yet do not detract from the room.

Keep your home's value high by creating a maintenance and upgrade schedule. Over time you will have a new, fresh look to your home. This way you will not be overburdened when it comes time to sell your home. For helpful information on how to keep your home value high, see the National Association of Home Builders website.

When purchasing, or selling, a home, one of the necessary steps is to learn what a home is valued at.  There are several factors that play a role in this determination, and there are several ways in which to define the estimated value.  General economics also apply into the equation, such as the law of supply and demand.

 

Some of the key factors that play a role in determining value are:  location of the property, the condition of the home, the age and size of the home.  For example:  There are two homes, Property A and Property B, that have the same floor plan.  Property A is located on a busy intersection, is a foreclosed home that needs a lot of repair, is 20 years old, and is on a small lot.  Property B is located on a cul-de-sac, is owned by the original owner, is 15 years old, and has a large, level lot.  Property A is valued at $200,000, and Property B is valued at $350,000.  Property A might be better for an investor who wants to make their own repairs and then rent the home out rather than an inexperienced, new home owner. 

 

When a real estate agent is hired as a buyer's agent, the agent will be able to assist the buyer in determining a price to offer on a home.  The agent is most likely a member of their local Multiple Listing Service (MLS), which is a database of housing statistics for a given area.  The MLS is a place where realtors share information on properties, such as how much a home sells for, how long it is/was on the market, etc.  The realtor will analyze data around the home the buyer is interested in, compare it to the price the seller is asking, and make a recommendation to the buyer.  A good example of the data on an MLS is:   San Diego Real Estate.  This link is provided by the National Association of Realtors and is directly connected to the San Diego, California MLS system to upload data.  Like all MLS organizations, some data is not shared with non-members, such as sales history, pricing and the number of days the home has been on the market.

 

Another way to determine a home's value is by hiring a professional appraiser.  Some sellers will have an appraisal conducted on their home prior to putting it on the market.  This way they have a good idea as to how much they can expect.  If a seller hires a realtor, the realtor will also provide their recommendation.  Both the appraiser and the realtor utilize the same resource for their data, which is the MLS.  To learn more about appraisers, go to Appraisal Institute - Homepage.

 

The economic rule that applies in determining home values is the law of supply and demand.  For example, a home is purchased for $500,000 during a period when there were a lot of people buying homes and not a lot of people selling them.  Two 2 years later the owner has to relocate and has to sell it.  There no longer is a high demand for homes and therefore there are a lot of homes on the market, so it will only sell for $400,000.  The homeowner did not make a mistake two years ago; it's just that the market changed.

 

When determining home prices, be sure to take into consideration the location, condition, age and size of the home.  Contact a professional real estate agent and utilize their services and knowledge to accurately translate the MLS data into solid facts.  Lastly, be aware of the overall economic conditions that play a role in home values.