Preparing for Homeownership - Step Five

Shopping For Your Home

After applying for a mortgage loan and receiving a commitment letter from the lender for a maximum loan amount, the next step is to shop for your home. There are a variety of ways to find a home that is right for you. The most common is to use a licensed real estate agent or real estate broker. You can even employ a homebuyer’s agent, which is a licensed real estate professional that works on your behalf in the home buying process. If the agent is not a homebuyer’s agent, you must be aware that s/he works on behalf of the seller. Real estate professionals should disclose the exact nature of their relationship with you up front. You can utilize the following resources to aid in your search for a real estate professional:

• Real estate advertisements in newspapers (Sunday papers usually have the most ads)
• Real estate web pages
• Open houses
• State, county, or city housing departments
• Nonprofit housing agencies

It is also a good idea to ask for a referral from a friend or relative who has recently been through the process. Real estate salespersons will probably ask that you begin working with a lender in order to get pre-qualified. If a buyer is pre-qualified, then the real estate professional knows that they’re serious about making a purchase.

DECIDING WHICH HOME TO BUY

Whether using a REALTOR or other licensed real estate professional, you should make a list of the practical requirements of your home such as number of bedrooms, number of bathrooms, size of yard, desired neighborhood, etc. If you are using a real estate professional, they will likely search on the Multiple Listing Service (MLS) for homes that match these criteria and fit within your approved mortgage loan amount. The printout of this MLS will also show other useful information such as available financing, average annual cost of utilities, etc. Remember to communicate clearly to your real estate professional the amount you wish to spend, especially if it is less than the amount for which you’ve been pre-approved. It is important that you stay in control of this process.

When you decide to look at the house, you should consider many things:

NEIGHBORHOOD AND COMMUNITY

Is this the type of neighborhood in which you and your family desire to live? How well will the area fit with your lifestyle? Factors affecting this decision include school districts, zoning, restrictive covenants in planned communities, amenities, access to public services, character, and future economic well-being of the community. Housing Authorities sometimes offer certain incentives for home purchases in “targeted areas.” Be sure to ask if a home in which you’re interested is in a targeted area, and if so, ask if there are any incentives being offered. The incentive may be to allow a higher income or sales price limit than in non-targeted areas, or to make funds available to someone who is not actually a first-time homebuyer.

NEIGHBORS

Do the neighbors seem agreeable and cooperative? Do they keep their own property in good repair? Do they throw loud parties on Friday nights? Are the surrounding homes occupied by renters or homeowners? Rental units sometimes change hands frequently, and could result in less overall stability for the neighborhood. Be sure to drive by the property on several different occasions to see what the neighborhood is like on the weekends, at night, or during morning rush-hour, for example. You’re trying to get a feel for whether you could live there on a long-term basis.

PROXIMITY TO WORK AND SCHOOL

Is commuting a long distance undesirable to you? Would you like your children to be able to walk to school? Make a note of the distance and time it takes you to get to your usual daily destinations from the home. Is the major arterial street to the home congested at most hours? Is it dangerous? How accessible is it?

MAINTENANCE REQUIREMENTS

Is the home going to require major repairs? Does it need cosmetic repairs? Can you afford these repairs? Industry professionals strongly recommend that prospective buyers order a home inspection and make their purchases contingent on a satisfactory inspection. (For more information on this topic, see the “Understanding Home Inspections” section.)

PRACTICAL VS. UNREALISTIC REQUIREMENTS

Does the home have what you need for you and your family, such as an adequate number of bedrooms and bathrooms, the right size back yard, etc? What features does the house have that are not practical? How does this house compare to other houses you’ve looked at? Perhaps you and your family members should think about “rating” each house on a scale of one to ten. This method may help you narrow your focus and get closer to a final decision.

UNDERSTANDING MANUFACTURED HOUSING

Manufactured housing (or mobile homes) has come a long way since trailer homes. Prospective home buyers have a variety of options from which to choose, including square footage, floor plan, color scheme of the décor, and finishing materials. Each manufactured home is built to conform to a federally regulated HUD code rather than to local building codes which are enforced at the home destination site. Manufactured homes are usually less expensive than a “stick built” home. This is due to the fact that manufactured homes are pre-built and then moved to the homeowner’s land or a manufactured housing subdivision or mobile home park. Prospective buyers should consider a number of factors before investing in a manufactured home.

PURCHASING A MANUFACTURED HOME

If you are considering the purchase of a manufactured home, you should give special attention to the following:

1. Where
   You Purchase Your Home If possible, buy your mobile home directly from a manufacturer’s retail outlet. Shop around to find a mobile home that you like. Call to see if you can purchase a mobile home directly through the manufacturer. Negotiate your price. You may want to check with the Better Business Bureau to ensure the manufacturer is reputable and reliable.
   
2. Roof
   A shingled roof can be better than a metal roof, as it can prevent leakage problems and improper ventilation.
   
3. Walls
   Vinyl siding is best for manufactured homes, as it can eliminate some of the common leakage problems that may occur with metal or hardboard siding. Exterior wall studs should be 16 inches apart, and walls should be at least 7? feet high.
   
4. Plumbing
   Plumbing systems tend to cause the most problems in manufactured homes. It is worth the upgrade to have the best quality plumbing fixtures for each faucet and sink and to be sure there are shutoff valves at each plumbing fixture. Nearly one out of three manufactured home owners report plumbing problems.
   
5. Windows
   To prevent water damage, windows should have welded vinyl frames and be insulated with double panes. The frame corners should be fused together instead of screwed or glued.
   
6. Floors
   Floors should have 2x8 joints spaced 16 inches apart. They should also have plywood sub-floors. Particle sub-floors do not provide adequate water resistance.
   
7. Climate Control
   For the cool climate of northern New Mexico, it is advisable to choose a home with heating and cooling outlets around the edges of the room, preferably along the exterior walls. A manufactured home in northern New Mexico should meet Wind Zone 2 and Thermal Zone 3 governmental standards. Southern New Mexico residents should choose a home with air outlets in the ceiling. A manufactured home in southern New Mexico should meet Thermal Zone 2 standards.
   
8. The Underside and the Foundation
   Be sure the bottom of your home is well ventilated with a protective skirting placed around it. A solid foundation is essential to protect your mobile home from structural damage. Be sure supports rest on deep concrete pads, or footings not directly on the soil. Certain loan programs, such as VA, have some very specific requirements as to how the home should be attached to the foundation. Be sure to ask about the exact requirements that will apply to your situation. Also, make certain that the person doing the work is qualified, licensed, and approved by the lender.
   
9. Warranties
   Choose a manufacturer that provides a long-term warranty with few exclusions.

COSTS TO CONSIDER

Manufactured homes may offer low initial maintenance costs. It is important to remember that the price does not include a site for the home. The site must be rented or purchased separately. In order to provide a mortgage loan for a manufactured home, lenders require that it be secured to a permanent foundation. Also remember that a manufactured home is more likely to appreciate in value if you own the land to which it is attached. Further, proper transportation of your home is critical. Every manufacturer must provide instructions explaining how to prepare the home site and install your home. Get a copy of this guide and read it before your home is installed. If possible, be present when it is being installed. Bring the installation guide and follow what the installer is doing. Make certain that your installer is qualified and appropriately licensed.

Sometimes the seller will combine all related costs into the sales price. Be certain to ask for an itemized statement which shows you the breakdown of what you’re paying. Ask questions until you have a good understanding of the overall price structure. Remember to negotiate the price and always ask the following questions:

• What is the cost of the home itself?
• What is the cost of a site for the home?
• What are the costs for utility hook-ups and other infrastructure needs?
• Is there a transportation fee to move the home to the site?
• Is hazard insurance affordable and easily available?