Greetings, everyone, and thanks again for your continued following. The is the second part of my home-buying and -selling tips from last week.
Tips for the buyer
Are rent-to-own programs real or a scam? The short answer is: If renting to own worked so well, wouldn’t everyone be doing it?
Many programs are just scams with daunting contracts filled with legalese designed to get money rolling in. Dishonest brokers know they never have to give the money back.
Rent is rent and buying is buying. If you find a good rent-to-own program (and a very few exist) you will still need to save for a down payment and closing costs, and qualify for a mortgage.
Some brokers will open multiple rent-to-own contracts on one property over a series of years. They make a few thousand extra dollars from people who don’t understand the process to begin with, and just move out when their contract ends and they can’t buy the property.
Hire a realtor to represent your needs and concerns. They can also help you find a mortgage broker who will find you the best rates and negotiate terms in your favor. Realtors often have others on their team who can save you money on inspections and other closing items since they represent multiple buyers. Interview a few agents and find out what services they are ready to offer.
Do your homework
This is the biggest investment of your life, so do your homework. This means, for example, making unexpected visits to the area to see how quiet it is or how much foot traffic is around. Check the area at various times.
Check with local law enforcement for a call history for the area. Look for rises in property crime and suspicious persons being reported. This is all public information.
Ask the municipality about upgrades coming to the area such as sewer expansion, sidewalks, and water lines. These can all be mitigating factors as a buyer.
If you plan to expand a home or remodel, ask what associated permits the city requires, such as required upgrades to sidewalks and aprons.
Old homes vs. new construction
You may not want to hear it, but new or old, there will be small issues to address when you own a home. From roofs to pipes, every house has issues from time to time.
If you understand your home warranty, and if it’s an old home; expect to replace minor items like supply hoses and be ready to fix items like water heaters. Always work an extra $500 a year for repairs into your budget for the first five years; in addition to warranty co-pays for new construction.