Finding the Best Value When You Buy a New Home

The new StreetWise Home Buying Guide can help you do it!

By Remar Sutton, DCU StreetWise Spokesperson

You’ve heard it said at least a thousand times—buying a new home is the biggest single investment most people make. That’s probably true when you consider that the average cost nationally of a new home is $263,100 and of an existing home is $236,300. Those figures for the second quarter of 2004 come respectively from the U.S. Housing Market Conditions issued by HUD and the National Association of Realtors®. In many markets those averages are higher. No matter your market, the cost of a home is not chump change.

When you’re going to invest that kind of money, you want to get the best value for your dollar. You also want a home that fits your lifestyle and family—one that you can enjoy and make uniquely yours. Those goals hold true whether you are in the market for your first home or your fifteenth or are looking for a vacation home or retirement home.

Helping you meet those objectives is the reason we’ve created the StreetWise Home Buying Guide. Sure, there are lots of good books in the library and bookstore—dozens of them, hundreds of pages. But in the StreetWise Home Buying Guide you’ll find a brief, fact-and-tip-filled guide to help you research and shop the most effective way. You’ll find links to other sound, reliable home-buying resources on the Web. And the Buying Guide works seamlessly with the StreetWise Mortgage Guide. Here are just a few of the issues the Guide can help you address to your advantage.

Do you know what features in a home you really want vs. those you really need? A look at various types of homes, resources to help you compare neighborhoods and research locations, and a worksheet to help you evaluate your needs vs. your wants can help you develop a “gameplan” and save valuable time—all before you ever start looking at houses.

How much home can you afford? Use our interactive online worksheet of expenses and income to help you calculate just how much you have to spend on a home (including down payment, monthly loan, mortgage loan).

Should you have your financing in place before you shop for a home? Absolutely yes. That’s the advice of the experts. Why? When you are pre-approved (not “pre-qualified” which is typically meaningless) for a mortgage, you know the specific price range of home you should be looking for, you are a “serious buyer” to any sellers, and you will be able to move very quickly should a hot home—just the one of your dreams hit the market at a dream price.

Should you work with an agent? What’s the best way to choose an agent? What’s a seller’s agent? What’s a buyer’s agent? Many people pick a real estate agent by going with the agent whose name is on the “for sale” sign of the first house they want to see. Did you know that person is a “seller’s agent”? Although the seller’s agent is required by law to give you accurate information, their legal and financial responsibility is to work for the seller. Did you know that you can hire an exclusive buyer’s agent to represent your interests? Would this be the best course for you? A whole section of our guide helps you look at the kinds of real estate agents, the pluses and possible drawbacks of using each and what factors to consider and questions to ask in choosing an agent.

What should you look for when you tour a home? What questions should you ask? Should you get an independent home inspection? Most headaches in new homeownership occur because the new homeowner didn’t ask the right questions or fully check out the home while they were still “just shopping.” Believe it or not, this is especially true of buyers purchasing new construction. Too many learn too late that just because “it’s new” doesn’t mean “it’s built right.”

What’s involved in making an offer and negotiating the sale? You love the house—it’s in the right neighborhood and has all the amenities you want. Of course, the furnace is a little elderly and the roof’s about 15 years old. What’s a fair offer? How high are you willing to go? Who does the negotiating? Did you know that you may be able to use the seller’s motivation to your benefit? The Guide’s overview of the process and tips for success can help you be better prepared for the most stressful part of buying a home.

Here’s the bottom line: If you were going to take a cool quarter million in cash and plunk it down on a stock, would you jump right in on a tip from a friend or even your broker? Not on your life, right? Being a smart investor, you’d take the time to look microscopically at that company, its track record, and its prospects. Well, your next home is a such an investment, we hope you’ll find the StreetWise Home Buying Guide helps you do your homework in a way that’s fast and enjoyable. I welcome your comments, suggestions for additional material, or questions, too. Happy house hunting.

So, what do you think?

If you find this review helpful, please pass the word to your friends. Also email me with any comments or suggestions.

Remar Sutton

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