Buying a home is a complicated undertaking. First home buyers usually rely on discussions with friends and relatives as to what action they should take, what they should do, what they should be aware of, and how real estate transactions are conducted. The lay of the land on home purchases has changed. The mortgage bubble that resulted in the real estate crisis in America has changed some of the ground rules.
Real Estate Brokers Are Not Always Necessary
Real estate brokers provide a valued service to both buyers and sellers. They are very well paid for their services. However, homeowners can sell their homes without a real estate broker. This is especially true if someone is available to show the home during evenings and weekends. A homeowner can advertise the home for sale in local newspapers and/or on the internet, meet and greet the prospective purchasers, and hire an attorney to represent them on the real estate transaction. If the homeowner does not have the time, the patience, or the availability, hiring a real estate broker to represent them may be a necessity. Websites such as www.zillow.com and www.redfin.com can be utilized by a homeowner who seeks to avoid paying the commissions related to listing a home with a real estate broker. Many home buyers today utilize the internet to look at the material on these websites to find the home of their dreams.
Hidden Costs of Owning a Home
The average homeowner, when looking to purchase a home, takes into consideration the mortgage and sometime the taxes on the property. In addition to the mortgage and taxes, homes require heat in the winter and they may require air conditioning in the summer. The fuel oil to heat the home and the electricity to air condition the home can be expensive. Depending on the climate of the area where the home is located, these expenses can amount to between $5,000 and $10,000 per year. Even if the home does not need air conditioning, the electricity to run the appliances, computers, and keep the lights on can be very expensive. The grounds of the home need to be maintained. The homeowner has to maintain his lawn and shrubs and the rest of his property or hire a gardener to do so. The exterior of the home needs to be kept in good condition. Painting needs to be done on a periodic basis and/or the home needs to be sided. Roofs can leak, boilers can break, pipes can leak, electrical issues can develop. These are all potential expenses a homeowner may face.
Down Payment Policies
A 20% down payment is not always needed to obtain a mortgage. If the prospective homeowner is looking to obtain a conventional mortgage from a financial institution, a 20% down payment may be necessary. However, under Federal Housing Authority (FHA) programs, much less is required as a down payment. In some situations, as little as 5% or 10% of the cost of the home is sufficient as a down payment. Programs are available from the Veterans Administration for veterans who can finance a home with a very low down payment.
Elliot S. Schlissel, Esq. has been representing clients in real estate transactions for more than 45 years. His office represents homeowners in buying and selling of homes, defending them against foreclosures, and helping them obtain mortgage modifications when they fall behind on their mortgages.
