Tips for Home Buyers and Sellers

Important Facts to Know Before You Buy or Sell a Home

They say the most important thing about buying a home is location. While finding the right area  to live in is extremely important, there also are other factors to consider when buying a home, especially if it's your first home. Purchasing a home is one of the biggest investments of your life, and it can be a difficult process. Selling a home is also a demanding and complicated process. A housing transaction can be even more challenging if you speak a language other than English.  This article offers some tips on what to be aware of when buying or selling a home.

Private Inspection

A private home inspection is not mandatory prior to buying or selling a home, but it is strongly encouraged. As a buyer, you will have to hire your own inspector before you finalize a home purchase, and you'll pay for it yourself (usually between $200-$500 sometimes based upon sq ftg). But, you'll be glad you did! A private inspection determines the condition of a home, and may include items or areas that need repair or replacement such as a wet basement, leaky roof, dry rot, or a faulty furnace. When you hire the inspector, you should attend the inspection to learn about the home, and ask questions and determine what repairs need to be addressed, including the cost of such repairs. Private inspections provide a better understanding of the condition of the home. Your Realtor can provide you with the names of several inspectors that you can choose from.


In most cases, a buyer will take out a mortgage to finance a home purchase. Prior to the home search, the buyer will meet with the lender to decide a home loan amount that is affordable to the buyer. The lender will probably require that the monthly payment not exceed 33 percent of the buyer's monthly income. Once this "Pre-qualification" and "Pre-approval" process is complete, the lender will issue a pre-approval letter that can be presented to sellers during an offer presentation, showing the credit-worthiness of the buyer. Once a home purchase has been negotiated, the mortgage company will hire an appraiser to estimate the value of the home. The lender will issue an approval of the loan based on the appraised value matching the purchase price, buyer's income verification, and the quality of the buyer's credit.

Title Insurance

Title insurance is recommended for all home buyers. There are two types of title insurance policies – a lender's policy and an owner's policy. A lender's title insurance policy protects the mortgage company against title claims that could affect the security of their mortgage. A lender will require that buyers purchase a lender's title policy in order to obtain a mortgage. An owner's title insurance policy protects home owners in the event someone else claims to have ownership of their property. This protection covers title problems such as unpaid construction debts; a contested will that left the property to a relative of the previous owner; or a spouse who wasn't living in the home when it was sold, but decides later on to claim ownership. Title insurance can protect from these and other issues that can affect home ownership rights.

Home Warranty

A home warranty plan can provide protection against the mechanical breakdown of covered home systems and appliances while a home is being offered for sale and for one full year after the closing date. A home warranty plan is paid at the closing, typically costs $350 to $600, and can be paid for by either the buyer or the seller. If a furnace breaks down six months after the purchase, the home owner with a warranty will typically pay a small service fee, and the home warranty plan will cover the rest of the cost to fix or replace the furnace. This can give a home buyer the peace of mind of knowing they will be protected against unexpected and expensive repairs or replacements of warranted items during their first year of ownership. This same protection is available to the home seller while the home is being sold, and also protects a seller from many claims that may arise before and after closing. Your Realtor can provide information on home warranty plans. Remember to read the warranty carefully to see what systems and appliances are covered as each plan is different.

Home Buying & Selling Process

Buying a home can be a lengthy process so be prepared to carefully review information, make decisions, and move on to the next step. The first step for buyers or sellers is to choose a real estate agent. You will also want to speak with a lender to assist with the loan qualification and approval process, helping you determine how much home you can afford to buy, so you can then start looking at homes for sale. After you locate a home you want to purchase, your real estate agent will work with you to prepare a purchase agreement, which they will present to the seller. When your purchase offer is accepted, you can order an inspection. If the inspection shows that the property is in acceptable condition, your agent will assist with the details necessary to proceed to closing and ownership of your new home.

As a home seller, your real estate agent will explain the home sale process and assist you with the critical step of pricing your home correctly for the market. They will then determine a marketing plan that is right for your situation and begin the process of showing your home to qualified buyers. The ultimate goal is to find a buyer and negotiate an agreement to sell your home at terms that are acceptable to you, and then assist you with the details of closing the sale.

Forms You'll Encounter

Once you begin the process of buying or selling a home, you'll begin to encounter many forms that need to be signed. Early in the process, you'll see Agency Disclosure forms that explain options for how an agent and their company can represent you. Before you can buy or sell a home, you'll need to sign a Representation Agreement  confirming the details of your relationship with your Realtor. Homes for sale will generally display a Seller's Property Disclosure form that home sellers complete and provide to buyers. Sellers also have the option to have an inspection done prior to sale and make that inspection available to potential buyers. Buyers should carefully read any information provided by the seller to learn vital information about the home. When buyers and sellers are ready to negotiate a sale, a Purchase Agreement form will be completed, signed by buyers, and presented to sellers. At the time of closing, there will be many more forms that you will be required to sign.

It's essential for you to understand the forms you are signing. All of the necessary forms are in English, so it might be helpful to bring a friend who can translate, or hire a translator. This will eliminate confusion and clear up unanswered questions. Don't sign any forms that you don't understand. If you have questions that aren't being answered or would like another person to review documents, hire an attorney to look over all of the paperwork.

Other Tips

Once you close on your house and you own it, any repairs are entirely your responsibility. The truth is that most homes need repairs. Your monthly budget for housing expenses should include your house payment as well as additional funds you set aside for maintenance and repairs.Achieving the American Dream of owning a home can be a fun and exciting time if you educate yourself about the home buying process and follow the tips provided here.