How To Find a Home

You've decided that home ownership is the right investment and lifestyle choice for you. You've determined what you need from a home and what you wish for in an ideal situation. Now how do go about finding a place you can call home? There are different methods you can use to find the right home. Let's examine your choices:

Real estate agents. Real estate agents are the most common avenue people turn to when they are looking for a home. Real estate agents have listings of homes for sale that they can show you after you explain what you are looking for and what you are prepared to spend. Agents can be particularly helpful if you are moving to an area far from where you live now and aren't familiar with your new location or you have a limited time frame to look at homes that might be suitable. Sometimes real estate agents have exclusive listings, which means that in order to view or purchase a specific property, you must work through them. Multiple listings are much more common--this means a property can be shown and sold by numerous agents and their companies.

An advantage to seeing homes listed with an agent is that these homes are more likely to be priced realistically. By realistically, we mean that the price is comparative to what the market will bear and that the price is such so that a sale is more likely than not to be made.

Real estate agents get paid a commission, usually a percentage ranging anywhere from 2 to 6 percent of the home's selling price.

Tip A home listed with an agent by the seller usually means that the agent's commission will come out of the property's sale proceeds. This is important to note because that means that the real estate agent is working for the seller. Her primary goal is sell the residence and get as close as possible to the asking price because that's how she will get paid the maximum. Many times buyers lose sight of this fact when an agent seems to be bending over backward to get them into a home. To protect your interests, you may want to use your own real estate agent. In other words, you hire an agent to find you the home you want at the best possible price.

How much would your agent be paid? A typical arrangement is that the seller's real estate agent (sometimes known as the listing agent) and the buyer's agent split the commission down the middle or 60 percent/40 percent. So if the seller's real estate agent sold you a home without the involvement of any other agent she would get the entire commission, for example 6 percent of the purchase price of the home. If two agents are involved, the commission is 3 percent for each of the agents.

How do you find a real estate agent? You can use word-of-mouth from other satisfied customers, the yellow pages, newspaper ads, or perhaps an employer if you're relocating, to help you find the right agent for your needs. Also, you can get a list of real estate agents on the National Association of Realtors website for the specific area you are interested in.

Tip Real estate agents can be invaluable when you're searching for a home, but their role isn't limited to the hunt. They often participate in the home purchasing process from beginning to end. They often participate in the negotiating of the purchase price, assist in obtaining financing as well as facilitating the closing.

The Internet. Just like in other areas, the Internet has become a useful tool for house hunters. The listing of homes at your fingertips with qualified data entered allows you to house hunt at your leisure. You can customize your search for location, square footage, number of bedrooms and amenities such as a pool or fireplace. A popular site you can check is the National Association of Realtors website, which contains over a million and a half homes for sale across the nation. Another website is BuyOwner, where sellers list homes they want to sell without the assistance of a real estate agent.

A growing trend has buyers and sellers completing the entire home buying process from start to finish through the Internet. This is still relatively rare though. At this point in time the Internet is usually a starting point for people who are looking for a home so they can get an idea of what's out there and narrow down their choices without having to do all the legwork. When it comes to a purchase of this size, most people want to see what they are getting before they sign on the dotted line.

Print media. The real estate section of the newspaper and real estate newspapers and magazines are still popular methods of searching for a home in a specific area. It can also be a good barometer of what the going price is for a specific type of home in an area.

There are two things to keep in mind though, when looking through real estate ads. One is that if something looks too good be true in terms of price and what you're getting for that amount compared to other listings, then the old adage of "buyer beware" applies. The other is that most of the truly great real estate deals never make it to the newspaper. They are snapped up by buyers working with agents or by prospective buyers who learn about the offer from friends or relatives.

Foreclosures and short sales. Sometimes owners can't make their mortgage payments or neglect to pay their real estate taxes and their home goes into foreclosure. Foreclosure basically means that the mortgage holder, whether it's a financial institution, a mortgage company or the previous owner who's holding the mortgage, takes over ownership of the house. Foreclosed homes are usually sold at auction and often are sold at below market prices because the lenders don't want the home. You can find listings of homes being sold at foreclosure in the legal notices sections of the local newspaper and by checking with the county clerk's office.

Short sales are becoming increasingly popular for buyers looking for a good price when they are buying a home. A short sale is basically a transaction in which a seller's mortgage lender agrees to accept a purchase price for a home that is less than the balance due on the mortgage loan. Why would a lender ever agree to this? Depending on the amounts involved and the fact that most lenders do not want to own property that goes into foreclosure, it may be the best choice for the lender. Sellers prefer short sales to foreclosures because it has less of an impact on their credit rating. If you find yourself considering engaging in a short sale transaction to purchase a home, we strongly advise that you consult with an attorney or real estate professional due to the complex issues that are involved.

Warning A foreclosure or short sale situation can be a chance for you to get a great deal on a home. However, you'd be wise to heed the warning, "buyer beware." Make sure you try to take a good look through the home and make note of any defects or repairs that are needed. This is especially true if it took awhile to get the previous owners out of the home and they neglected it or deliberately caused damage. Depending on what you pay for the home and the type and amount of repairs it needs, what initially looks like a great bargain could easily turn into a money pit!

Word-of-Mouth. A great way to find the home you're looking for is to put the word out to friends or relatives that live in an area that you're interested in to keep their eyes and ears open. Your sister may live in a town where you'd love to live and in the process of talking to an elderly neighbor finds out that they are selling their home and moving to smaller quarters. This is an opportunity for you to have the right of first refusal if you have a head's up. If you decide you like what you see, you can make a reasonable offer that the sellers would consider.