Buying a Home
Thanks to the Internet, being an informed home buyer has never been easier. No longer are buyers completely dependent upon real estate agents and mortgage lenders when it comes to gathering information. House listings are readily available online, as are interactive tools that can estimate mortgage payments and percentage rates. If you have never bought a home before, you can find step-by-step guides to the process online. Even seasoned real estate investors can turn to the Web for news and advice, as the market is constantly evolving. Whatever your needs, the Internet is an invaluable source of information for buying a house.
The purchase of a home is likely the single largest transaction you will ever make. If you're wondering whether you're ready to take on the responsibilities of home ownership, and (more importantly) whether you can afford it, the Web can help you be more informed as you make that decision.
- As you consider the pros and cons of home ownership, remember that some Web sites (particularly real estate sites) will try to sway you toward making a home purchase because it is in their best interests. Don't allow yourself to be enticed into purchasing a home that's more than you need or more than you can afford.
- Online loan calculators use factors such as current interest rates and the length of a home loan to calculate what your monthly mortgage payments might be. If you use one of these tools, remember that these tools are meant to be a rough guide, and you'll probably be paying a slightly different amount than what the calculator determines. For example, factors such as your credit score, the property taxes for the home you end up buying, and the timing of federal interest rate cuts and hikes can all affect your monthly payments.
- If you want to check your credit score, you can do so online at AnnualCreditReport.com, a secure site where you can obtain a free credit report once a year without any adverse effects on your credit score. You can also order individual reports from each of the three leading credit reporting agencies in the United States: Equifax, Experian, and TransUnion. Find out more about these agencies and other online credit tools in the findingDulcinea Credit Web Guide.
To determine whether you should you rent or buy …
provides this calculator that helps you compare the costs of renting a home to buying a home by factoring in elements such as property taxes, appreciation, and closing costs into a home payment.
has a worksheet titled "To Rent or to Buy?" You'll need to know some specific information to use this page, such as the amount of time you plan to live in your home, the term and interest rate for a home loan, the property tax rate in your area, and expected appreciation rates. Once you've entered the necessary information, the page will calculate your monthly costs for buying a home as opposed to renting one.
supplies an online calculator to help you figure out how much you can really afford to spend on a new home. This calculator differs from the others in that it factors your other possible monthly expenses, such as credit card and car payments, into the equation.
MSN Real Estate
features this article about the many financial costs of home ownership. Emphasis is placed on helping the reader understand that the financial ramifications of owning a home extend far beyond the purchase price.
helps you determine whether you're ready to own a home by asking some questions about your finances, the housing market where you live (or will be living), and how long you expect to remain in the house.
To learn what home ownership is like …
U.S. News & World Report
offers an article about some of the benefits of owning a home that may surprise you, including a happier, healthier family, kids who perform better in school, and improved friendships.
Generation X Finance
is a blog that aims to teach the members of Generation X about achieving financial independence. This particular entry focuses on the less romantic aspects of home ownership, such as coping with the fact that many things in your home can go wrong at once.
Finding the right neighborhood can be just as important as finding the right home. Maybe you’re looking for a city of a certain size, or with a particular climate, or a low crime rate, or good schools. No matter which factors are most important to you, we’ve found Web sites that can give you all the details you need.
- Most cities have their own Web sites that provide basic statistics and news. It may seem intuitive to add “.gov” to the name of your city to find its official Web site but that won’t work for most cities, as many of them have somewhat complicated Web addresses that include their state abbreviation as well. If you don’t know the Web address, you’re usually better off using a search engine.
- Read a local paper to see what’s going on in the town or neighborhood where you are interested in moving. Most papers are available online (even the low-budget weeklies). If you're not sure of a newspaper’s Web address, the U.S. Newspaper List is a good place to look.
To research specific neighborhoods …
compiles statistics on neighborhoods throughout the country, including crime, weather, population, and median household income.
offers information on almost every city or zip code in the United States—even those with populations under 1,000. The site is visually unimpressive but it contains a wealth of information. If you don’t see your city listed on a state list, check the top of the list and you'll be linked to lists of smaller cities and towns.
helps you research and compare American school districts. The award-winning site is easy to navigate and can tell you a school district’s history with test scores, finances, and statistics concerning both teachers and students. Don’t miss the parent-written reviews, which give you an insider’s view that can’t always be found in the stats.
is an important site to consult before moving to a new neighborhood. Enter any address and the site will locate every registered sex offender in the neighborhood and display the results using a map with markers representing the offenders. Details provided include the registrant’s name, residence, and specific crime.
For "best places to live" …
has several "best places to live" listings, with America’s towns and cities divided into categories such as the "top earners" for salaries, best places for singles, and best places for affordable homes. Search for your “best place” by city or by state.
comes from The Wall Street Journal
network. This section of the site factors more than 40 variables (all from personal preferences you submit) to find a “best place” for you to live.
features an article that pokes a little fun at the worst cities to live in if you’re a sports fan. The rankings here go “from bad to worse.”
contains a massive list of U.S. cities and their various nicknames. Most of the list will be worthless to you, but you might want to know before you move in that, for example, Camden, New Jersey, is nicknamed "Murder City," or that McCloud, California, is the "Blackberry Capital of the World."
As your hunting begins, you will soon find that there is no shortage of properties for sale. While this affords you many options, you are now burdened with narrowing the field and deciding what it is you should be looking for in a home. Fortunately, there are plenty of places on the Internet to help you narrow down your choices.
- Be sensible when determining whether a house is in your budget range. Even if you are approved for a large mortgage loan, it doesn't mean you should accept the largest amount and buy a house that will leave you penniless in six months' time.
For a list of things to look for in a house …
National Inspection Services
explains the elements of a home that you should examine when you are house hunting. Some of the items on this list might be better left to a professional home inspector, but many potential problems identified here can be spotted easily by even the most uneducated home buyer.
To review architectural styles …
explains the history and various aspects of several types of housing styles, including Queen Anne, Mediterranean, and "Classic Box." This page comes with basic illustrations, rather than full-color photographs of each style of home. The site is hosted by a California real estate agency and thus the information is geared toward local readers, but many of the house styles described can be found all over the United States.
Jamaica Plain Real Estate
reviews the elements of many popular housing styles seen in New England (and many other parts of the country), such as Cape Cod, ranch, and federal styles. Color photographs show examples of each style of home.
If you're thinking of buying a fixer-upper …
Home Inspector Locator
is not a pretty Web site but it does have an extremely useful, detailed chart of some common home repairs, such as roofing or plumbing work, with cost estimates for each specific type of project.
provides tips about remodeling your home, starting with a handy remodeling checklist and pictures of home remodeling ideas. Browse the rooms in the "Home Improvement Gallery
” for suggestions on sprucing up the various areas of your home. You'll also learn how to develop your remodeling plan, and find a contractor if you need one.
has this advice to offer for people thinking of purchasing rundown homes, fixing them, and reselling them for a higher price.
For a second home …
contains a series of articles about the various considerations you should take into account when purchasing a second home, whether it's an investment property, a vacation home, or you eventually plan to retire there some day. This site is a partnership of real estate companies and agents around the country.
The New York Times
discusses how housing styles have changed in New Orleans, Louisiana, as people there work to rebuild their homes after Hurricane Katrina. The article states that many individuals are focusing on designs that will better withstand future storms, and some are looking at the city as a "blank slate" to introduce new home styles.
There was a time when the only way to find homes for sale was through newspapers or signs in people’s front yards. Those are still viable options but you can find much more complete and extensive listings online. Many Web sites list properties for sale, complete with asking price, specs, and often photographs. Naturally, you will want to visit a house in person before bidding on it, but using the Web first to research and narrow your choices will save you time and hassle, whether you’re looking to move down the block or around the world.
- There are multitudes of homes listed for sale on the Internet. All of the good property listing Web sites let you narrow your search by specifying your desired location, style, square footage, price range, and number of bedrooms and/or bathrooms.
- We've included national sites in this section but there are also many good regional listing sites. To find listings more local to your area, just type your city and state, or even your county and state, and then "real estate" into your favorite search engine.
- Many newspapers post their real estate listings online. To find a local newspaper’s official Web site, check for it on the U.S. Newspaper List.
- Some houses, particularly ones that have been most recently listed, may not have accompanying photographs. As long as the listing is on a reputable Web site like the ones recommended below, the lack of a photograph is no reason to discount a particular listing.
- Professional real estate sites are often easier to navigate but online classified ads are excellent sources for houses that are for sale by owner.
- A multiple listing service (MLS) Web site provides you great exposure to most of the homes for sale in your area without confining you to one particular agent or agency. The biggest drawback is that these sites do not include properties that are being sold exclusively through one agency. You can find a regional MLS Web site by typing the area in which you wish to search (for example, Sacramento or Long Island) and "multiple listing service" into your favorite search engine.
For online listings from major real estate companies …
is one of the largest real estate companies in America. The company's official Web site features millions of properties for sale with detailed searches. RE/MAX also offers mortgage calculators to aid your house hunting even more.
is the oldest real estate company in the United States. Use the "Quick Search" function on the homepage to search for properties or a Coldwell Banker office in your area.
has long been one of the most trusted names in real estate. The company’s site is very easy to navigate and offers listings for countless properties, both residential and commercial. If you have already searched RE/MAX and Coldwell Banker, Century 21 may offer homes that those other sites have missed.
Keller Williams Realty
has a very polished, dynamic site that features thousands of house listings. While there aren't nearly as many homes to be found here as on the above sites, the site features a helpful home buyers section with articles that teach you the steps of buying a home, questions you should ask your real estate agent, and how a real estate agent can assist you.
To find houses for sale by owner …
For Sale By Owner
is one of the top real estate sites on the Web, with thousands of properties listed by motivated homeowners who wish to cut out the middleman. This site is easy to navigate and listings can be filtered by location, size, and number of rooms in a home.
lists many properties for sale by owner as well as recent foreclosure properties. To view the foreclosure listings
, however, you must either sign up for a seven-day free trial or pay $9.95 per week.
For a multiple listing service …
is a free search tool you can use to find homes for sale by realtors. Click on a state to see what properties are listed for sale. This site also features some helpful real estate news articles.
For alternative online listings of homes …
is the world's largest online source of classified ads, and has a readily available section of housing listings. The no-frills site can be difficult to navigate for newcomers, though. Start by choosing your location from the list of states and cities on the right (there are several foreign countries, too). Next look for the “housing” column in the center of the page; choose “real estate for sale” at the bottom of this column to search for properties.
is best known for its abundant auctions of collectibles but in recent years real estate has become a prominent fixture on the site. You’ll find listings from both real estate agencies and homeowners. Depending on the listing, you can either place a bid on a home being auctioned or purchase it at a set price with the "Buy It Now" option. Make sure to read the site’s guide to buying real estate
on eBay before you get started.
For a listing of foreclosed homes …
The U.S. Department of Housing and Urban Development
(HUD) sells foreclosed homes for less than their market values. Click on your state, and then search listings by location, price, or property case number. Most listings have photos. In addition to its listings, the HUD site is filled with valuable information for all buyers.
takes text messaging to the real estate world. If the listing agent or owner has signed up for this paid service, potential buyers can text message Cellulist when they see a listing for a house they like to get more information about the property without actually calling the agent or seller.
Whether you hire a broker to help you purchase a home is a personal decision. Some people feel better with professional assistance to ensure that every step of the home buying process is completed correctly. Others are quite confident executing the process by themselves and would rather put the money toward their new home. The sites in this section can help you sort it out.
- Ever wonder what the difference is between a real estate agent and a broker? This article from The Motley Fool can help you sort out the details.
- Generally, it's more common to use a buyer's broker when purchasing a condo or an apartment than for purchasing a house.
- There are some online-only brokers; for example: Foxtons or ZipRealty (ZipRealty shares 20 percent of their commission with you if you buy with them). Like many online-only businesses, these brokers are often less expensive than their real-world counterparts because they have lower operating costs.
is a trusted site with legal information about a variety of subjects. This article can help you determine whether you want to hire a broker or a real estate lawyer to help you purchase your home.
The Federal Trade Commission
provides a list of questions to ask a potential real estate agent or broker to determine if they are the best choice to help you purchase a new home. You'll also learn more about how commissions work and what commission fees you’ll likely pay as a buyer.
Now that you've found a home you like, it's time to do a little more sleuthing. As soon as possible after you agree on a price, you'll need to have the home inspected by a licensed contractor, and you’ll need homeowner's insurance. The Web can answer questions about both of these steps.
- Home inspections may be performed by someone who carries an "inspector" title or someone who is, for example, a structural engineer. This article from the National Association of Home Inspectors, Inc., explains what you should do to ensure that your potential new home receives a thorough home inspection, and how to know whether you need an inspector or an engineer to look at your home.
- Most people who perform home inspections can tell you if there’s obvious termite damage, but it’s a good idea (and often required to obtain homeowners insurance) to get an official termite inspection. Most licensed exterminators can perform termite inspections.
- To find an engineer or exterminator near you, try an online directory like YellowPages.com. (And don’t forget to check out their reputations with the Better Business Bureau before hiring anyone.)
- Homeowner’s insurance isn’t just a good idea: it’s required by most mortgage lenders. Make sure to get any home you’re buying insured early enough so that you can bring proof of insurance with you to the closing.
For tips on home inspections …
The Federal Consumer Information Center
explains why you need to have an inspection completed on any home you purchase. This article also provides important contact information if you want to learn more about radon testing, or have your home inspected for lead-based paint and other lead hazards.
The American Society of Home Inspectors
takes you on a virtual home inspection with this interactive tour. Click "Launch the tour now" and then select the various areas of the home that you want to learn about.
For tips on termite inspections …
is the Web site of one of the leading home inspection companies in the United States. Learn what a termite inspection entails, how long an inspection takes, and a few other helpful things you should know about termites when you purchase your new home.
For information on homeowner's insurance …
Homeowner's Insurance Guide
introduces you to the basics and gives you helpful tips on how to choose the best provider. Reading through this site will convince you of the seriousness of homeowner's insurance.
Insurance Information Institute
demonstrates what you will find in a typical homeowner's insurance policy. The main features are explained in layman's terms, which is something you won't find on the official documents. Make sure you understand your policy before you sign it, however. With this site's help, you’ll be an expert.
J.D. Power and Associates
offers a comparison chart of major insurance companies. If you are in the market for homeowner's insurance, consulting this list can point you in the right direction.
Negotiating the price of a home requires the same level of research and preparation you've put into finding the home of your dreams, researching loans, and learning about the responsibilities of home ownership. Now that you're ready to negotiate, take the time to study this process carefully. If you make a bid that's too low, a seller might end the whole process. Then again, you don't want to make an offer that's too high or you might end up paying more than you would have needed to.
- The art of negotiation isn’t specific to buying a home. When researching negotiation tactics, look beyond real estate sites; if an article is offering advice for boardroom negotiation tactics, you may find it just as useful if you can apply its principles to your home buying negotiations.
- Read a bit about market trends and the recent sale history of houses in the neighborhood you are shopping in. Public records can be found online and this information may save you from overbidding.
- Make sure you know how much you can afford to spend on a home before you start the negotiation process. The "Rent or Buy?" and "Home Mortgages" sections of this Web guide both contain sites that will can help you determine what you can afford to spend each month.
- You'll have to think about interest rates when you are trying to settle on a purchase price for your home. We've included a site that lists current rates, updated weekly.
For negotiation tips …
describes how to place a bid and negotiate the asking price of a house. The information found here is written in a clear, condensed format that is easy to understand.
Home Buyer's Information Center
has many tips for negotiating the price of a house using examples with actual dollar figures, making the advice more concrete and realistic. Be patient with the site’s primitive design and distracting ads—there’s lots of helpful information here.
For a useful negotiation tool …
helps you search recent home sales in a certain neighborhood so you can see what houses are really selling for and get a better idea of the true value of a home. Enter the address and home type of your prospective house to get a list of properties that recently sold in that area with their sale price, close date, square footage, and more.
For current interest rates …
has compiled a “Weekly Primary Mortgage Market Survey” for 2007. Here you'll find information on interest rates for 15-year and 30-year fixed-rate loans, and well as five-year and one-year adjustable-rate loans.
has the story about an episode of The Office
titled "The Negotiation," in which main character Michael Scott negotiates salary with an employee armed with negotiation tactics he learned from a fictionalized Wikipedia entry. The episode brought a swarm of traffic to the real Wikipedia entry on negotiation, with many users adding the "tips" Scott had gathered. Wikipedia was forced to shut down the entry for a time.
The process of obtaining a home loan can be arduous and confusing if you're not prepared before you start your quest to find a new home. Review the Web sites in this section to familiarize yourself with financial jargon and the various types of home loans to ensure you'll understand how to secure the loan that's best for you and your financial future.
- Check a lender’s background thoroughly before you get caught up in a lending scheme that makes too-good-to-be-true–sounding promises for people with bad credit who want to own a home.
- Online-only lending companies often boast low closing fees but it’s always a good idea to compare the fees of a few different lenders to be sure you’re really saving money. Also remember that saving a few hundred dollars in closing costs is easily negated by an interest rate that’s even slightly higher.
- If your parents or someone else is helping you purchase your first home, remember that recent deposits of large sums of money into your bank account can be difficult to explain to a lender, who will want to know whether that money was a loan that you'll need to pay back.
- If you want to learn more about how mortgages work, or how to choose the right mortgage for you, browse through the sites recommended in our findingDulcinea Mortgages Web Guide.
- Ginnie Mae, Freddie Mac, and Fannie Mae are all secondary market lenders. In other words, they provide money to the lending institutions that will be giving you the money you need to buy your home. All three were founded by the federal government, though Freddie Mac and Fannie Mae are now publicly traded, for-profit companies.
For general information on applying for a mortgage …
The Motley Fool
offers this definitive and easily digestible guide to mortgage loans. From looking for a lender to paying a down payment, these step-by-step instructions walk you through the process.
has a glossary of home buying terms that can help you understand some of the details with your home loan and much more.
has a concise explanation of what rates and points are and how they affect your mortgage.
explains the various types of home mortgages available in its introduction to "How mortgages work." Learn how your mortgage payments will be calculated to determine how much you can afford to pay for your home each month.
For help choosing the right type of loan …
The Federal Reserve Board
suggests that you start shopping around for a home loan by going to your bank first. It also discusses mortgage considerations such as ARMs and the difference between government-insured and conventional mortgages.
For tips on evaluating mortgage lenders …
has a simple search tool for finding reputable mortgage lenders. Although you should broaden your search to more than just this site, Fannie Mae is a solid place to start.
offers this guide to avoiding shady mortgage lenders. Use these tips in your search for the best mortgage lender to spot any potential red flags.
The day you close on your new home can be a very exciting one but if you want it to go smoothly you’ll have to prepare. We’ve found some excellent Web sites to help you be proactive and stay on top of the final stage in purchasing a home.
- Be ready to pay all closing costs on the day you sign for the house. This often means a visit to your bank beforehand to procure the correct form of payment. (Most contracts will specify exactly what forms of payment are acceptable.)
- You will have a mound of paperwork to sign on closing day. In order to understand exactly what it is you are agreeing to, refer to Freddie Mac’s glossary of real estate terms.
- Once the home is officially yours, it’s time to move. The findingDulcinea Moving Web Guide identifies the Web’s best resources for hiring movers, finding packing materials, notifying the necessary parties of your change of address, and much more.
For a final look at the home before closing …
The Home Buyer's Information Center
has this helpful article about performing a final walk-through on a house. There’s also a PDF checklist for you to print and use when you are completing this step of buying your home.
For information on closing day …
offers this brief yet informative walk-through of closing day. Any real estate lingo used in this article is conveniently hyperlinked to a corresponding definition. Look for other helpful personal finance articles on this site, as well as interactive calendars and tools.
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