10 Things to Take the Trauma Out of Homebuying

1. Find a real estate agent that’s simpatico. Homebuying is not only a big financial commitment, but also an emotional one. It’s critical that the agent you choose is both skilled and a good fit with your personality.

2. Remember, there’s no “right” time to buy, any more than there’s a right time to sell. If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes don’t usually occur fast enough to make that much difference in price, and a good home won’t stay on the market long.

3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.

4. Accept that no house is ever perfect. Focus on the things that are most important to you and let the minor ones go.

5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price may lose you the home you love.

6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself—room size, kitchen—that you forget such issues as amenities, noise level, etc., that have a big impact on what it’s like to live in your new home.

7. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.

8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don’t leave yourself short and let your home deteriorate.

9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits.

10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually over from 1998 to 2002, a home’s most important role is as a comfortable, safe place to live.

• How can a real estate agent help me?
• Seven steps to buying your home
  
• Searching for your dream home
• Making your home wishlist
• Opting for new construction
• How much can you afford?
• Loan Guide

Buying a House? GET A WARRANTY

All veteran homeowners know that when you buy a house, you're buying a set of potential problems. The furnace might refuse to heat. The water heater could fail. Face it, any number of things can go wrong after closing, costing you thousands of dollars. Fortunately, there's a way to make a balky air conditioner or a leaky roof seem like a mere nuisance rather than a calamity: buy a home warranty.

The term "home warranty" applies to two forms of protection: insurance plans for new homes and service agreements for existing homes. Each has value, and each has limitations. State laws and typical building practices provide for four forms of new-home protection:

Implied warranties require builders to construct homes that are "reasonably fit" for use as housing, constructed in a "good and workmanlike" manner and "habitable." These are broad and debatable standards, little more than a starting place.

Imposed warranties are rules and standards set by state government. For instance, a water pipe into the house must be buried a certain number of inches below the ground to prevent it from freezing. If a building inspector finds that it's been done improperly, the builder must correct the problem before the home can be occupied.

Express warranties are written promises from builders that outline construction standards. These warranties are always limited because builders want to restrict potential liability.

Product warranties come from manufacturers, not builders. New refrigerators, garbage disposals and dishwashers all have manufacturer warranties, which mean that buyers have some protection if replacement or repairs are needed.

The catch with these warranties is that all the promises, rules, and regulations mean little unless purchasers can get help when something goes wrong. You assume that builders will make repairs, but what if they refuse? Or what if they've gone out of business?

That's when you'll be glad that you bought a new-home warranty, a fifth kind of warranty separate from those described above. It guarantees that the warranty firm will step in and get things fixed.

WHAT NEW-HOME WARRANTIES COVER

Glenn Burns, executive vice president of Professional Warranty Service in Annandale, Va., estimates that 35 percent of all new homes come with insured warranties. Builders buy the policies and include the cost in the price of the home. These warranties have no deductibles and usually can be transferred to a new buyer if the home is sold during the coverage period. They vary, but a typical 10-year policy has three stages:

*Defects in workmanship and materials are covered during the first year. In practice, the builder usually corrects items that do not meet warranty standards. If there is a dispute between the homeowner and the builder, warranty plans often require settlement through arbitration.

*Wiring, piping, heating, and air conditioning are covered in the first and second years.

*Structural problems are covered for all 10 years. This includes big-ticket items such as a shifting foundation or leaky roof. Could you match this kind of long-term protection by just holding back some escrow money when you're buying the house? No way.

EXISTING-HOME WARRANTIES

When you buy an existing home, chances are no warranty will be in force. So a savvy buyer includes a warranty requirement when making an offer. If the offer is accepted, the seller must buy a warranty. The price of the warranty depends on the extent of the coverage, but expect it to cost between $300-$600.

Any home is eligible for a warranty, but you can't buy a property with serious problems, wave a magic wand and get them fixed. Limitations and exclusions are placed within the warranty to keep it reasonable. Ask what's covered, what's excluded (a swimming pool or spa, perhaps), whether you can buy protection for excluded features and how long the coverage lasts.

Existing-home warranties don't insure against structural defects such as rotted rafters or cracked concrete, but they cover items that have been installed in the house, such as electrical systems, water heaters, ranges, plumbing and central heating and cooling. In addition to a premium, existing-home warranties have a deductible feature, often $35 to $50 per call.

Finally, remember that a warranty is no substitute for an inspection. You need that, too