1. Don't buy if you can't stay put.
If you can't commit to remaining in one place for five years or more,
then owning is probably not for you, at least not yet. With slow
appreciation and the costs of buying and selling a home, you may
end up losing money if you sell any sooner than that.
2. Start by shoring up your credit.
Since you will most likely need to get a mortgage to buy a house,
you must make sure your credit history is as clean as possible. A
few months before you start househunting, get copies of your credit
report. Make sure the facts are correct. Fix any problems you discover.
3. Aim for a home you can really afford.
The rule of thumb is that you can buy housing that runs about
two-and-one-half times your annual salary. But you'll do better
to use one of the Internet's many calculators to get a better
handle on your income, debts and expenses and how those affect
what you can afford.
4. Don't worry if you can't put down the usual 20 percent.
There are a variety of public and private lenders who, if you
qualify, offer low-interest mortgages that require a down payment
as small as three percent of the purchase price.
5. Buy in a district with good schools.
This advice applies even if you don't -- and won't -- have
school-age children. Reason: When it comes time to sell, you'll
learn that strong school districts are a top priority for many
home buyers -- thus helping to boost property values.
6. Get professional help.
Even though the Internet gives buyers unprecedented access to
home listings, it's still a good idea to use an agent. Look for
an exclusive buyer agent, if possible, who will have your
interests at heart and can help you with strategies during the
bidding process.
7. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying
additional points -- a portion of the interest that you pay at
closing -- in exchange for a lower interest rate. If you stay in
the house for a long time -- say five to seven years or more -- it's
usually a better deal to take the points. The lower interest rate
will save you more in the long run.
8. When househunting, bring your camera.
Or at least a notebook to jot down reminders, since after you
look at a half-dozen or so houses the details begin to blur in
your mind. Best choice would either be an electronic camera that
lets you take notes right on the image, or a Polaroid so that you
can scribble comments in the margins.
9. Do your homework before bidding.
Your opening bid should be based on the sales trend of similar
homes in the neighborhood. So before making it, consider sales
of similar homes in the last three months. If homes have recently
sold at five percent less than the asking price, you should make
a bid that's about eight to 10 percent lower than what the seller is asking.
10. Hire a home inspector.
Sure, your lender will require a home appraisal anyway. But that's
just the bank's way of determining whether the house is worth the
price you've agreed to pay. Separately, you should hire your own
home inspector -- preferably an engineer with experience in doing
home surveys in the area where you are buying. His or her job will
be to point out potential problems that could require costly repairs
down the road.
Next: Are you ready?