You've filled
out your wish list and figured out how much you can afford.
Now you're ready to grab your car keys, your checkbook, and...
wait! Let's not jump the gun. Before you even think about
going shopping for your home there are a few more things to
consider. Are you excited about that new home community that
just popped up down the street? Or are you set on the castle
after all? Or maybe you're just looking for a good deal.
The Worst House on the Best Block
You may have heard this before: It's always better to buy
the worst house on the best block than the best house on the
worst block. Here's an extreme example. Say you live in a
2500-square-foot colonial that's only two years old. You happen
to look out your breakfast nook window one day and find that
the lot next door is being cleared. "That's nice,"
you say -- until you find out that your neighbor's new house
is only as big as your living room. What does that mean to
you? It means your property value is going to fall. Why? Because
the value placed on your house also takes into account the
homes surrounding your property.
What does this say about your new neighbor?
She's one smart cookie. Her property value will increase because
she's living next door to your beautiful abode. This doesn't
mean you can't despise her. Go ahead. We'll understand.
Once you've transcended your petty emotions,
though, you should know that many communities have covenants
to prevent such an event from happening. But you can apply
this rule to any neighborhood. The least valuable home benefits
from the more expensive homes and the most valuable home is
harmed by the lower valued homes. Keep this in mind while
you are shopping.
Now, on to our different home types.
New Home -- One of the main advantages to a
new home is... it's new! New homes have new appliances, new
plumbing, new roofs, new boilers, new electrical systems,
etc. You get the point. You shouldn't expect to outlay money
for repair costs anytime soon, and most new homes come with
five- or 10-year warranties. Another advantage is the design
process. If you sign a new home contract early enough in the
building process, you can make some, if not all, of the decisions
about the interior and exterior design.
One important thing to note about buying a
new home is that most new home communities welcome real estate
agents. So here you should have a strong buyer's agent. It's
important that your interests are represented; don't count
on Joe Builder and his agent to represent you. That friendly
agent at Happy Acres legally represents Joe Builder and not
you. As we're fond of saying in Fooldom, "Do your own
research." In this case, find out all you can about the
builder.
The grand model unit that Joe Agent shows you
-- while Bach suites lull you into a delighted reverie from
the in-wall speakers -- is sure to have a luxury bath, a finished
basement, an upgraded kitchen, and designer wallpaper and
floor coverings. It's important for you to know that your
new home will likely not have all these options unless you
pay for them. You could spend tens of thousands of dollars
more than the base price for those goodies. Does it sound
suspiciously like buying a car? It is, in this regard anyhow.
Sit down and decide which options you must have and which
options you could live without. Also keep in mind that you
can always make certain improvements after the house is built.
Also, everything is negotiable. As with all
home purchases, don't hesitate to ask your agent to negotiate
on price, options, and closing costs. If you're looking to
make a deal on your new home, you're in a strong position
if the builder has a completed house without a buyer. That
vacant house isn't making a dime for him and he's likely to
want to unload it as quickly as possible. If you're not in
a hurry to move in, some builders will actually sell you their
model and then lease it back from you. Usually you'll get
a great deal on a well-optioned and designed house and a guaranteed
return on your investment.
Article continued at http://www.fool.com/homecenter/find/find04.htm
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