The home buying experience can be complicated and emotional. You may visit 40 homes and 10 internet sites, make 3 offers, and finally negotiate a contract, only to get yelled at by the seller because she doesn't feel like you fully appreciate her asparagus garden. We'll help you try to maintain some decorum.
Real Estate Agents
In a real estate transaction, the seller gets something simple: money. But the buyer gets a giant unknown: a home. It's always a good idea to get the services of a real estate agent so that you don't end up buying the house where Girl Scouts won't sell their cookies and priests often spray with holy water.
Most home sales use two real estate agents that are both usually paid on a commission basis. A "listing agent" (the agent that tries to sell the home) may get paid 4% from the person selling the house. A "buyer's agent" (the agent who helps the buyer) may get paid 2%, also from the seller. Since agents aren't volunteers, only use one if you intend to buy a home.
Be selective when choosing a real estate agent and don't be afraid to interview a few before making your decision. Some agents know everything about certain neighborhoods, while others are experts in helping buyers move to a new city, and others are experts at drinking mocha lattes and getting spray-on tans (stay away from these).
To help find an agent you like, visit open houses and talk to the agents showing the homes. You'll want an agent that understands you and your needs. Sometimes a little face-to-face chit-chat can help determine if the two of you click.
If an agent brags about her assistants, be prepared to spend a lot of your time working with them instead of her.
Do some home and neighborhood research before you meet your agent. Most cities have a publicly searchable online database (often called MLS, or Multiple Listing Service) of all homes listed by agents.
If you see a home you love, don't call the agent listed on the sign. Since this agent represents the seller, he may not act in your best interest. Rather, have your agent (the buyer's agent) show you the home.
If you find a home that's for sale by owner, you can still have your agent represent you. You may need to ask the seller if she is willing to pay a commission to your agent. (This is common.)
Generally speaking, don't use multiple agents. Since agents are paid on commission, they likely won't spend much time with you since they may never get paid.
Making The Offer
Once you find the house of your dreams, you'll likely need to make a deposit of good faith to the seller ("earnest money") that says, "I, like, really want this house and stuff."
Always, always, always get a home inspection. You can hire a company to inspect the roof, plumbing, electrical, and so on for any problems. If/when problems are found, you can often request that the seller fix any issues before the sale is final.
An "appraisal" is the value of a home, as determined by a third-party company. This company may come up with a value by simply comparing sales prices of homes near you. Ultimately, the true value to a home is what someone else is willing to pay for it.
You and your agent may structure a contract with a variety of "contingencies." For example, if the "appraisal" shows the house to be worth $10,000 less than the agreed-upon price, the contract is void. Or if the walls start to bleed and disembodied voices tell you to "GET OUT," you get full rights to a movie deal.
If you have your heart set on the Star Wars-themed curtains in the house, add a clause in the lease stating that you'd like to keep them. The current owners may have just purchased new Avatar curtains for their new home.
When the sale is final, write down your feelings for why you chose to buy your new home. These notes will be helpful when you try to sell it to someone else years later.
When Bert first used an MLS system to look for homes, he was surprised to be asked so many personal questions. Below were some of his answers:
Number of Baths - "At least one per day. I like bubbles."
Number of Beds - "None. But I'm saving up for a mattress."
Number of Square Feet - "None. My friends tell me they look more like potatoes."
After reading his answers, Bert's agent politely told him to answer the questions based on the types of homes he'd like to see. So he revised his answers to 10, 20, and 10,000.