How to buy a house; house buying

Finding a house; using agents and lawyers; sealing the deal. Because buying a house is probably the most expensive purchase you’ll ever make, don’t rush into it. Before you even begin to look, think about your present and future needs, then try to find a house that will fill them.

How much space do you need indoors and out to live comfortably? What special needs does your family have? Must you have a downstairs bathroom, north light for the family artist, a garage? Should you buy a new house or an old one? An older house may be built better than a new one, but it may need modernization or major work, such as a new roof.

Shopping for a house
Even before you’re ready to buy, periodically check local newspapers to get an idea of what’s available. When the time comes, it may help to use a broker. Brokers can quickly tell you what is or might soon be available and can give you an up-todate picture of local mortgage lending activity. But brokers are paid by the seller and may not reveal every fault of a house. In fact, they may “puff” the property. Downright falsehoods, however, are actionable as fraud.

Shop for your house in a neighborhood you feel comfortable with in terms of people, prices, and life-style. Try to determine that the neighborhood is stable or improving rather than declining. Establish that it is free of industrial odors, noisy road or air traffic, and other annoyances. Ask about such special problems as frequent flooding and poor TV reception. Be suspicious of a neighborhood with many houses for sale or rent.

Also check to see what highways or major developments may be in the works. In a new development, find out whether sidewalks, sewers, and street lights have been paid for or will be assessed later; ask owners about the builder’s willingness to fix problems.
Don’t buy a house that is bigger or more expensive than those around it. Resale could be difficult. It maybe better to buy a slightly rundown house in a higher-priced area and fix it up.

When you find a house, check its price against the prices of similar houses on the market in the same area. Consider getting an appraisal of its true value to guide you in making an offer. And have an engineer inspect the premises to determine the soundness of the structure and the adequacy of the heating, plumbing, wiring, and insulation. (Local service companies will often oblige by checking out their specialty.) Get a written report on the inspector’s findings and an estimate of what it will cost to correct problems. The seller might reduce the asking price or offer to share expenses.

Make your own inspection. Check the water pressure and the fit of the doors and windows. Make sure the roof gutters lead water away from the house. Look in the basement after a rain for signs of water seepage. Find out what is under the carpeting. Unless the owner can present recent certification that the house is free of termites, have a professional check it.

Find out how close the house is to public transportation, shopping, recreation centers, schools, hospitals, and fire and police departments. Also consider the local zoning ordinances and tax rates (get dates of the most recent assessment).

The process of buying
Whether or not you use a broker, hire a lawyer experienced in real estate (or an escrow company if it is more customary in your area). For a fee of no more than 1 percent of the price of the house, a lawyer (or escrow company) will draw up the contract for sale (purchase agreement), arrange for a title search, execute the closing, and record the deed of sale.

Before the contract is drawn up, you maybe required to put up earnest money as a binder to secure your right to purchase the real estate at the agreed-upon terms for a limited time. Unless your agreement specifically says this money must be returned to you if the deal doesn’t go through, it may be forfeited. Don’t sign a binder without advice from your lawyer.

The contract for sale, which usually entails a 10-percent down payment, is drawn up by the seller’s lawyer, but should be reviewed by your lawyer. The contract should be made conditional on your being able to obtain mortgage financing.