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From the open house to securing a mortgage to closing day, purchasing a home is a complex and daunting process. Here are 11 myths that home buyers should abandon if they hope to keep a clear head and maintain realistic expectations during the house-hunting process.
By Debra Immergut
Always Make a 20 Percent Down Payment
As home prices climb, home buyers have a tougher time accumulating a cash down payment that amounts to 20 percent of the typical purchase price. The good news: You can usually get your dream house with a smaller up-front payment. On the downside, however, you’ll have to buy either private mortgage insurance or government insurance for at least a few years. Be forewarned: This insurance can add hundreds of dollars to your mortgage payment each month.
A House Inspection Is Optional
Too often, inexperienced buyers agree to waive the inspection in a hurry to nail down a deal. Don’t fall for this! Skipping the inspection is almost always a mistake. Far from a mere formality, an inspection is a great way to slow down the purchase process, uncover major problems with the house before completing the sale, and find ways to negotiate the final price. Don’t omit this vital step.
Choose Only a 30-Year Fixed Mortgage
Your parents probably had a fixed, 30-year term on their home loan, and they may even have stayed in the house long enough to pay it off. But recently, other options have increased in popularity, and home buyers may find real advantages—and much lower interest rates—with 15- or even 7-year loans. Be sure to explore all mortgage options when buying a home, and discuss the decision with a banker or financial adviser.
Cash Buyers Always Win
Sure, sellers love the simplicity of accepting a big pile of cash instead of having to deal with buyers who need financing. But an all-cash offer isn’t a guaranteed winner. Home buyers who are willing to outbid an all-cash offer certainly have a decent shot at nabbing the house.
Real Estate Is Always a Safe Investment
During the housing crash of 2008, many homeowners learned firsthand the risks of investing in real estate. Since then, however, housing prices have bounced back, and plenty of young buyers are entering the market. All the same, when you’re in the process of buying a house, remember that what goes up can also come down.
Buy the Worst House in the Best Neighborhood
The strategy of searching for a low-priced steal in high-priced ZIP code isn’t always the best game plan. If the cost of making the house livable will be sky-high, or if it has too many drawbacks that can’t be fixed (for example, if it’s located next to an interstate or a noisy business), then the house may not be such a bargain after all.
Start Looking for Homes in the Spring
Sure, spring is the most active time for real estate investment, because both sellers and buyers are preparing for the summer moving season. There’s no need to wait until the daffodils bloom, though, to begin your home search. House-hunting in the fall and winter may actually save you money because you’ll probably be competing with fewer potential buyers, which should hold prices down.
Skip the Agent and Go Straight to the Internet
While home buyers can certainly find listings online, they may be better off working with a buyer’s agent instead. Buyer’s agents do more than just show what’s for sale. They also give the lowdown on comparables in the market, help steer buyers away from properties that have potential problems, and provide guidance during the negotiation phase. It’s always a smart idea to have an experienced pro on your side.
Your Accepted Offer Is Set in Stone
So, the buyer has told the seller what she’s willing to pay, and the seller has accepted. While both parties have agreed to the offer, it’s still not set in stone. If house-related issues turn up during the inspection, or if the seller asks for an unusually fast closing, the buyer may be able to shave hundreds or even thousands of dollars off the price.
Prequalification Means an Automatic Loan
Before buyers start looking for houses in earnest, they’ll probably go through a bank’s prequalification process to find out how much money they can borrow. Be aware, however, that banks don’t always disclose how theoretical this number can be. Once the bank completes a more heavy-duty vetting of a buyer’s finances, it may decide that it’s willing to loan less than originally planned—or even nothing at all.
Buyers Without Kids Don’t Need to Pay Attention to the Schoolsn
Even buyers who don’t have school-aged children should think twice before moving to a neighborhood with poorly ranked schools. Great school districts make for highly coveted neighborhoods, so when you’re ready to sell your home in the future, the next buyer may be willing to pay a premium to be in your district. So, before you buy, take time to study up on the quality of the nearby schools.
Basements were once used solely as utility rooms that housed furnaces, laundry areas, and overflow storage for seasonal items, tools, and sometimes even root vegetables. Today, with the high cost of above-grade living space, many homeowners choose to finish parts of their basements to serve as living areas. While this is a great way to gain more space, if characteristic basement problems aren’t resolved first, occupants of these finished spaces may be exposed to a higher risk of some health problems. Even if you have no intention of using your basement as living space, health hazards that originate there can spread to other parts of your home. It pays to be aware of the risks that dwell in your basement and that could potentially affect your family’s health.
By Glenda Taylor
Basements are damp, which is precisely the environment in which mold thrives. Any kind of mold, not just the deadly black stachybotrys variety, can lead to respiratory problems. Typical health symptoms associated with the inhalation of mold spores include a runny nose, excessive sneezing, coughing, watery eyes, or dry, itchy skin. Those with allergies can suffer broader, more intense respiratory effects, including difficulty breathing and chest tightness. To reduce the risk of mold, use a dehumidifier, seal cracks in the foundation, and replace carpeting with tile, vinyl, or another appropriate hard flooring.
Not every basement laundry area enjoys adequate dryer venting from the basement to the outdoors. Rather than running a vent pipe to the outside of the house, some homeowners opt to outfit the dryer with a device that catches lint and then recirculates warm air from the dryer throughout the basement. Unfortunately, the exhaust from the dryer also includes chemicals from laundry detergents, which are released into the basement air where they can trigger respiratory problems. If you spend any time in your basement, have your dryer vented to the outdoors.
Sewer gases contain not only methane, highly toxic ammonia, and hydrogen sulfide, but they also include fumes from solvents and other chemicals that have been introduced into the sewer system. Sewer gases are most likely to enter your home through a dry basement floor drain: When the plumbing trap, which is designed to block gases, dries out, sewer gases will seep into the basement. To prevent health problems that come from exposure to sewage fumes, regularly flush basement floor drains with water.
Fuel-fired furnaces are expected fixtures in basements, but without proper care and maintenance, they can produce a deadly by-product of combustion, carbon monoxide. This gas can then seep into the rest of the house, where it can create health problems and a dangerous risk of fire. Carbon monoxide is odorless and invisible and may not be noticed until occupants experience symptoms of carbon monoxide poisoning, such as headache, dizziness, or loss of judgment. At high concentrations, carbon monoxide can even lead to death. If you have a gas- or oil-fired furnace, have it inspected annually, and use carbon monoxide detectors in the basement and in upstairs rooms.
Basements are a favored storage spot for leftover cans of varnish, paint, and adhesives. Storing half-empty cans of chemical-laden mixtures can, however, introduce toxic substances into the air, because it’s difficult to seal cans completely once opened. Exposure to those chemicals, also known as volatile organic compounds (VOCs), can lead to allergies and disorders of the central nervous system, and long-term exposure can result in chronic health problems. Inspect your stored solvents and discard any that appear to have leaked. And, the next time you buy paint or varnish, choose low-VOC products to minimize your exposure to toxins.
Lack of Ventilation:
If you’ve ever noticed a stuffy smell when you’ve entered a basement, that odor is most likely the result of poor ventilation. While stuffy air below-grade won’t affect anyone living upstairs, it can trigger asthma attacks or other respiratory problems in those who spend time in a basement bedroom or rec room. If you’re going to use your basement as a living space, your best bet is to tie it into your home’s central HVAC system and open the basement windows frequently, even on chilly days, to let in fresh air.
Radon gas, which is produced by the radioactive decay of uranium, is present in soil, rocks, and even in the air you breathe. In small quantities, radon doesn’t present a health risk, but when it’s concentrated in a closed environment like your basement, it’s a different story. In high-risk areas, radon has a tendency to seep through basement cracks. Radon can then become trapped in a poorly ventilated basement, where it can threaten the health of occupants and potentially increase their risk of developing lung cancer. Keep track of radon levels in your house by installing a couple of radon detectors. If a detector senses high levels of radon, the EPA suggests that you have your home treated by a radon remediation expert.