Pick Your Home Type
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