Friday, December 22, 2006

Tips on buying or selling your house

Whether you are planning your first purchase or selling your second home, property buying and selling requires a great deal of decision-making. Meticulous planning at the investment stage itself could indeed avoid hassles and many sleepless nights.

Though the list provided below is not exhaustive, these tips will help you plan your investment better. Before you buy a home prepare yourself with the knowledge needed to make your real estate transaction happen smoothly.

Research: Read available materials, talk to friends and experts, and spend time looking at different homes, schools, and neighbourhoods.

Outline a Plan: Focus on the important factors and organize the entire process. You may even want to use a binder with sections on house hunting, home financing, service providers, etc.

The right location: It’s always better to search for a location that preferably is in line with your income and choice. Get an idea about the connectivity of the area to the basic needs of life - hospital, entertainment, shopping etc and the people staying in the area.

Make a good deal: Compare the cost of the property you are interested in with similar property in that area. A broker can be very useful in this regard as he can provide you with the list of few transactions that has taken place in recent past in that locality, which will give you a fair idea.

The real estate agent: An experienced agent is always a preferred option as he would be able to judge the area that will fit in your budget. Before narrowing down to any particular estate agent take care to see their past record.

Choosing a housing finance company: Compare the loan options available and always go with the financer who has a good track record. While going for a home loan, remember that loans of a shorter tenure (say 5 years) require higher payout from your side every month (EMI) since you are paying off your loan in a shorter time frame.

Closing costs: The closing cost includes costs incurred on brokerage, registration, stamp duty, insurance, property taxes, amenities charges and so on.

Legal: Before buying property, it is advisable to appoint a solicitor to inspect the original title documents of the property being purchased. If the title is not clear, the number of complications arising in future may be numerous.

The resale prospect: Think about the day when you may need to sell the property. Features that tempt you when you buy a house may not be attractive to prospective buyers when you become a seller.

Before you sell a home

Make sure your house is the one potential buyers want to come back to for a second look.

Repairs: Even tiny defects in your house might look big in the watchful eyes of the buyers. Cleaning the exteriors and interiors, giving the rooms a bright look, creating speciousness and illuminating the house can make a big difference in the prospective buyer’s mind.

Spreading the word: You can advertise in newspapers or websites, or spread the news by word of mouth through friends and acquaintances to sell your property. However, handling your own sale means you will be responsible for placing ads, answering phones and showing your home to strangers.

Real estate agents: The commission rate charged by an agent may vary, depending on where you live or what agency you choose.

However there are some benefits of going through professional real estate agents. They will help you with:

Establish a fair asking price for your home
Promote your home to other agents
List your property in multiple listing services giving maximum exposure
Schedule appointments to show your home to prospective buyers
Refer you to sources for insurance, inspections, legal counsel and financing
Help you negotiate with the buyer

Setting a Fair Price:

Some of the factors to consider in pricing your home are:

o Location
o Economic conditions
o Supply and demand in the local housing market
o Extra features in your house, etc.

Qualifying a Buyer:

A number of factors will help determine the right buyer for your property:

o The buyer’s current income and employment.
o The buyer’s cash position and availability of a down payment.
o The length of time the buyer needs before closing on your home.
o How interested the buyer appears to be in your home versus others.

House documents for buyers’ scrutiny: Keep all house related documents together. Buyers may want to have a look at all the documents.

Legal Representation: Look for an attorney with expertise in real estate transactions.

Your attorney will be present at the actual closing to protect your interests and can assist you with the following elements of a sales contract:

o The sale price.
What is included in the sale price — draperies, carpeting, light fixtures, heating oil, etc.
o The amount of the down payment.
o The date of settlement and possession date.
o Contingencies to the sale–inspections (e.g. structural, lead-based paint, etc.), required improvements, legal review of the contract by the buyer’s or seller’s attorney, etc.
o The amount and length of loan, interest rate and time limits to secure the loan.
o Determining which closing costs are to be paid by the buyer and which by the seller.
Best of luck and happy hunting!