1. Property Location and Neighbourhood

The adage “location, location, location” holds especially true in real estate. The area where the property is situated will significantly influence its value and your quality of life. Research the neighbourhood for its safety, accessibility, local schools, amenities, and public transport links. Proximity to green spaces and community facilities can also enhance the living experience.

2. Structural Integrity and Building Surveys

Before committing to a purchase, it’s crucial to ensure the property’s structural integrity. Hiring a professional to conduct a building survey can identify any potential issues, like subsidence or dampness. These surveys can be more costly but are invaluable in avoiding expensive repairs down the line.

3. Energy Efficiency and Utilities

In today’s eco-conscious world, the energy efficiency of a property is a significant factor. This is why a lot of property owners opt to get a smart meter, as it helps monitor and manage energy usage more effectively. Check the Energy Performance Certificate (EPC) rating of the property, and consider the type of heating system, insulation, and double-glazing features.

4. Legal and Planning Permissions

Ensure that all the legal aspects of the property are in order. This includes checking the title deeds, property boundaries, and any covenants or rights of way. If you plan to extend or modify the property, verify that there are no restrictions and that previous modifications had proper planning permission.

5. Property Age and Maintenance History

The age of the property can impact your maintenance responsibilities. Older properties may have more character, but they can also require more upkeep. Review the maintenance history to assess if the property has been well-cared for and to anticipate future maintenance needs.

6. Market Trends and Property Valuation

Understanding the local property market trends is vital for making an informed purchase. Research recent sale prices of similar properties in the area to ensure you’re paying a fair price. It’s also wise to consider the property’s potential for appreciation in value over time.

7. Mortgage and Financial Considerations

Finally, consider your financing options. Review mortgage rates from various lenders and assess how the purchase fits into your long-term financial plans. Don’t forget to factor in additional costs such as stamp duty, solicitor fees, and any immediate renovation costs.

Smart Buying for a Solid Future

Purchasing a property is a multifaceted process that extends beyond just finding a place you like. It’s about making an informed, wise investment that will stand the test of time. By meticulously checking these seven key aspects – from the location and structural integrity to energy efficiency and legal checks – you’re setting yourself up for a successful and satisfying property purchase. Remember, the effort and diligence you put in now will pave the way for a secure and enjoyable future in your new home.

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The Hidden Threat

Unwanted intruders like insects and rodents can often catch homeowners off guard. Not only do they pose health hazards, but they can also inflict significant damage to the residence. These infestations often remain concealed from plain view, making it challenging for prospective buyers to spot them during the preliminary visit. That’s why a professional pest assessment proves to be an indispensable resource.

Early Detection

A significant advantage for homebuyers in obtaining a professional pest inspection is the ability to detect issues early on. Pest control specialists possess the skills to recognize indications of pest infestations that may be overlooked by someone without proper training. Their expertise allows them to know where and what to search for, enabling them to pinpoint pest problems in their initial stages. Early identification can lead to considerable cost savings for homebuyers over time, as addressing pest concerns before they escalate into full-scale infestations can avert expensive structural damage and diminish the necessity for comprehensive pest control interventions.

Negotiating Power

Discovering a pest infestation during a professional inspection can be a game-changer when it comes to negotiations. If pests are found, buyers can use this information to negotiate a lower price with the seller or ask them to take care of the pest issue before closing the deal. Having a professional pest inspection report in hand provides valuable leverage during negotiations and can potentially save you thousands of dollars.

Peace of Mind

Purchasing a house involves significant financial and emotional commitments. It’s crucial to make sure the property is not merely structurally stable but also a secure and cozy place to reside. Having the assurance that your prospective new residence has undergone a comprehensive pest inspection can bring peace of mind. This knowledge instills confidence in your choice, ensuring you won’t face pest-related issues soon after settling in.

Preventive Measures

Pest inspections not only detect existing pest issues but also provide valuable insights into preventive measures. Pest control professionals can advise potential buyers on steps to take to prevent future infestations. This might include recommendations on sealing entry points, maintaining the landscape, and practicing good sanitation habits.

By implementing these preventive measures, you can reduce the risk of future pest problems and ensure the long-term health and integrity of your new home.

Health and Safety

Pests can pose significant health risks to homeowners. Some pests, like rodents and cockroaches, carry diseases that can be transmitted to humans. Others, like stinging insects, can cause allergic reactions. A professional pest inspection can help identify these health hazards and ensure they are properly addressed.

For families with children, pets, or individuals with respiratory conditions, a pest-free home is essential. A thorough inspection can contribute to a safer and healthier living environment.

In conclusion, professional pest inspections are a crucial step in the home-buying process. They provide early detection of pest issues, give you negotiating power, and offer peace of mind. These inspections can also help you implement preventive measures to keep your new home pest-free and ensure the health and safety of your family.

When looking for a new residence, never overlook the significance of having a thorough pest inspection conducted by professionals. This is an investment towards your future peace of mind and financial stability. With the help of pest control specialists, you can make an educated choice regarding one of the most substantial acquisitions in your lifetime.

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The common practice is to put down a 20% down payment to secure your new place. However, there are a few ways around it. Here are a few loopholes you may qualify for to buy a house with no down payment.

VA Loans

If you or your spouse are veterans or current military service members, you may qualify for a VA Loan. These loans are one of the best ways to slip around having to put a down payment on a house. To qualify, you must meet at least one of the VA loan requirements, which include:

• Have at least 181 days in active duty for peacetime veterans or 90 continuous days for wartime veterans.
• For the National Guard or Reserves, you will need to prove that you have had at least six years of service.
• Be the spouse of a service member who died on active duty or due to a service-related injury.

Keep in mind that although Veterans Affairs doesn’t have any official credit score requirements to apply for a loan, mortgage lenders look at credit scores to decide whether someone is eligible for a mortgage loan.

USDA Loans

Are you interested in purchasing a property in a more rural or developing suburban area? If so, you may qualify for a USDA loan.

The Department of Agriculture backs this loan to encourage expansion in specific rural and suburban areas. It will allow prospective buyers to purchase a property in these designated areas with zero money.

Before you apply, here are a few requirements to qualify for a USDA loan:

• Have a credit score of at least 640
• Do not have a debt to income ratio that is higher than 45%
• Have a gross household income that is under 115% of the average income of the county in which your prospective home resides
• Do not use your home as a working farm.
• Have the home you are purchasing be your primary place of residence

Physician Loans

Many people are unaware that professionals in the medical field may be qualified to apply for a physician loan. These are loans created to help professionals in the medical field purchase a home before they might be able to, alleviating them from the stress of a down payment.

Unlike other types of loans, lenders usually want applicants to pay a PMI (private mortgage insurance) if the down payment is under 20%, but not with physicians loans. These lenders are generally flexible on employment requirements and are lenient towards higher debt to income ratios due to the high cost of medical school for potential applicants.

So, if you are a medical professional early in your career and lack significant enough income to buy a home, a physician’s loan may be there to save the day.

Find the Loan That’s Right For You

If you are looking to purchase a home and meet any of the requirements above, you may be able to skip over the down payment and head straight for the front door of the house of your dreams. If you are still curious about your options, get in touch with a lending professional who will be able to walk you through the best mortgage loan options for your specific needs.

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There are, however, factors that must be weighed up when it comes to thinking of purchasing a foreign property and these must be compared to the strengths and weaknesses of buying at home.

Location
Let’s be honest, there are some things that buying a home in dear old Blighty simply cannot deliver. If you want a guaranteed getaway in sunnier climes and a tropical beach view then, with the best will in the world, you’ll need to go overseas. If all you need is a quiet retreat to get away from treadmill of working life, however, the UK has plenty to offer. An overseas purchase should be made for a property that simply cannot be bought in this country.

Exchange rate
As the average price of a property creeps up in the UK – and London especially – you might well be able to get more for your money overseas. The pound’s strength against the Euro, for example, could be an important factor. The exchange rate is now almost on a par with the level ten years ago. Small changes in the rate can make a big difference, with £100,000 now worth tens of thousands of Euros more than when the currencies reached near-parity in late 2008/early 2009, making a strong case for an investment on the continent.

Knowledge
It’s never a good idea to invest in any property without a thorough knowledge of the market you are investing in. This is no different when shopping overseas. Ideally you’d look to invest in a foreign country that you know a fair amount about before you begin – maybe a favoured holiday destination or a regular business location. You will still need to employ the services of a translator and legal expert who understands local laws and customs – trying to ‘wing it’ with the basics won’t do when it comes to the serious business of a house sale – but  having some knowledge to start off with will at least help you to avoid getting caught out.

Property is key
It’s important not to lose sight of the property in this discussion. This has to be right whether you invest at home or abroad. There’s nothing wrong with having your head turned by the sort of stunning property on FT Property Listings – provided you then do the necessary research required to make that dream home a reality.

If you can find the right property in the right location at the right price then it’s well worth investing in it. That’s the case whether that property happens to be in the next street or thousands of miles away. Buying overseas is certainly an option for a property investor, especially in a country where the exchange rate and economic conditions are favourable and where the natural conditions create settings that are simply not found at home.

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Rental Properties

Rental properties are second home purchases made in order to make a profit. These properties can either be long term investments or short term, flip-style purchases. They run the gamut from houses to condos and everything in between.

Long term investment rental properties are those homes that have been purchased with an eye towards selling at a point in the future when the market has greatly increased their value. These types of second homes have become increasingly popular with the big housing markets of the mid-2000s, when homes have skyrocketed in value. Markets like those do not happen very often, however, and sometimes people looking to sell homes for profit will need to be prepared to hang on to the property for a long time. In this case, the property can be rented or leased to interested parties. The lease or rent should be at the very least enough to cover your mortgage and all property taxes. In many cases, long term investors will find that they can increase their profits on second homes just by virtue of patience; like selling prices, the amount that a homeowner can charge for rent will go up over time. Eventually, the owner of a second home will be able to charge much more each month than their mortgage payment.

Houses bought to flip quickly, on the other hand, are a different matter. Often, owners of properties for the short term will finance their purchase through a mortgage, often the second mortgage in their names. The key to these properties is getting out quickly, often before the first month payment is due. Remember that the first few payments on any mortgage are where the bank stands to earn the most money in interest!

If you are renting a property, you should look into landlord insurance. Offered by companies such as endsleigh.co.uk, landlord insurance is specifically designed to meet the requirements a landlord may have as opposed to conventional home insurance.

Vacation and Retirement Homes

Vacation and retirement homes have risen incredibly in popularity over the past couple years. With more disposable income, more families are choosing to invest in property that they can move to when they retire. With real estate being snapped up all over the place, savvy vacationers are becoming more and more interested in buying property in prime vacation spots where they can go on their yearly holidays.

As with income properties, vacation and retirement home owners have the option of renting to finance their second home. One option is a standard rent; the owner charges a renter a monthly fee in order to live in the house. Again, the monthly rent should be set slightly higher than the mortgage payments as you will have to pay off all taxes and other fees that apply to a second home, as well as any repairs that need to be done if you have the misfortune to accept a dubious tenant. As the goal of the vacation and retirement home is not to make money, but simply to pay it off, there is not as much need to charge over the price of the mortgage payment.

Owners of vacation homes may find that it is very inconvenient to rent to a monthly tenant. This is because having someone reside in the home may interfere with you or your family’s vacation plans. The exception to this is with vacation homes that are, for the most part, seasonal, such as condos on ski hills and even many resort areas. These can be rented out to accommodate workers in the resort and still be vacant for vacation time. Second home owners might also want to look at building a suite onto their home that can be rented out (there are always workers looking for a place to rent, especially at resorts, so an add-on can prove to be a great year-round investment).

Another way for vacation home owners to finance their homes year round is to consider renting their property out on a weekly basis to other vacationers. Most people find that they buy their vacation property in an area that is very popular; hotels in these areas are often incredibly expensive, precluding many families from taking their own vacations in these areas. An increasingly large number of families, however, are beginning to realize the benefits of renting out condos or houses that belong to other people for their vacations. These rentals are often cheaper than hotel rooms and come with all the amenities of home, offering a much more relaxing experience. Families can rent your vacation home out for blocks of two or three weeks, or even more. This gives the owners a chance to plan their own vacation for when their second home is vacant, while making the mortgage payments through the fees charged year round.

Renting out vacation homes has become so popular that many resort areas have a whole new industry built around renting out other people’s property. Vacation home rental companies will handle all the bookings for the home owner as well as the cleaning and supplies, although all of these services will come at a cost. Most people will find that cost worth it, though, as the company takes care of virtually any concerns about the property.

Often, people who purchase second homes will find that they will finance themselves. The key, of course, is a sound initial investment. Don’t buy a piece of property for a vacation home in an isolated area and expect to be able to finance it through rental families all year. This is an option only for those who buy property in or near busy resorts. Buying a more isolated second home will often mean that either you will have to do a lot more work in advertising it as a rental to others, or you will have to rely on mortgage payments and your own income to finance the purchase.

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But when you’re in the market for a place to hang your hat, there are a lot more things that you must take into consideration than just the basic materials of the structure of your would-be home. And if you’re building a brand-new home from scratch, one of the biggest decisions you’ll make is to selecting a home builder.

Out of all the purchases you’ll make in your life, your house has to be at the top of that list in importance. So how will know if your home is in good hands or not?

The first step to selecting the right home builder is to research the various networks of contractors. The vast World Wide Web is a great way to get in touch with different contractors and compare rates and reputations. You want to use a resource that only has the most experienced and professionally trained contractors in its database. Contracting firms will screen the many contenders for the title of “home builder” so that you don’t have to deal with any bad apples.

Note, if a contractor doesn’t have membership to the NARI, or the National Association of the Remodeling Industry, then you’re likely dealing with a bad apple. Members of NARI have agreed to a special code of ethics and are certified professionals.

Once you’ve determined that the basic credentials of the home builder are all there, you then can look a bit further.

What business does this home builder work at? What are his or her contacts and other industry associations? Answering these questions can help you size up the contractor. A contractor may look good on paper but if they are employed by a company that is not well-established, you have good reason to be skeptical and should probably move onto the next candidate.

In addition to checking out the contractor’s employer, you also should check to make sure he or she is licensed with the local and state government. (This is not always required, however.) Additionally, all good home builders will be fully insured.

By now, maybe you’ve narrowed down your choices and found a few contractors who seem appealing. Your job is not over however. Use a consumer watchdog agency to mull over your options once again. The Better Business Bureau is a great resource to use – as you can be informed about whether the home builder in question has had a history of complaints or penalties or on the contrary, has a squeaky clean reputation.

Still, you’re not quite ready to decide upon a contractor yet! You need to have a one-on-one, face-to-face chat with the home builder. This is your chance to grill him or her; don’t be afraid to. After all, he or she will be constructing the home you may live in for the rest of your life. You have to make sure the contractor is not only qualified for the job, but also that he or she understands your personal needs as a home buyer.

When selecting a home builder, what questions should you ask? You can ask more involved questions about what you’ve already researched, for example you may inquire about the contractor’s place of employment and personal track record. But you want to also make sure to ask specific questions about the construction process. How long will it take before the house is ready for move-in? How many crew members will be on hand? Etc.

Treat this meeting as a job interview. Moreover, just as an employer would ask for references from a wannabe employee, you should do the same for your home builder! But where should these references come from? Well, they shouldn’t come from the contractor’s best friend, mom, or the head of his or her business. Instead, you should ask for the contact information of the home builder’s former clients. Then you can ask those clients what, if any, problems they ran into.

When you finally pick out a home builder, you should feel 100% sure about your decision. The process of selecting a contractor is certainly a long and tedious one – but it cannot be overlooked. Fortunately, it’s a process you will not regret taking seriously! Consumers read reviews and comparison shop for the most insignificant, inexpensive products. So why shouldn’t they do the same for a contractor who is going to build their home?

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In Canada and the United States, there are similar mechanisms for buying a foreclosure but there are provincial and state laws that govern this aspect of real estate. The laws are clear on how to proceed with a foreclosure and people who are interested in buying foreclosed homes for investment purposes must be aware that there are nuances in the laws on a province-to-province and state-to-state basis.

Buying a Foreclosure in Canada

There are two kinds of procedures that govern foreclosures in Canada. The first one is called the Judicial Sale. Judicial Sale means the court is involved. Given that the foreclosure is under the court’s jurisdiction, a lender must file a case in court against the defaulting borrower to seek permission to sell the property. The following Canadian provinces follow the Judicial Sale of a foreclosure:

• British Columbia
• Alberta
• Saskatchewan
• Manitoba
• Quebec

In the province of Nova Scotia, it is called Mortgage Foreclosure but the procedure is still the Judicial Sale because the court is involved.

The second type of foreclosure procedure is the Power of Sale. Unlike the Judicial Sale, Power of Sale can proceed without the intervention of the courts. The lender simply takes the necessary steps to sell the property if the borrower defaults. This right to foreclose on the property is covered and stipulated in the loan or mortgage documents.

These provinces use the Power of Sale type of foreclosure:

• Newfoundland
• Ontario
• New Brunswick
• Prince Edward Island

Note however that even if some provinces fall under Judicial Sale or Power of Sale, the procedures vary from province to province. Certain steps have to be followed in a specific order before the sale of the foreclosed property can be authorised.

Buying a foreclosure in the US

In some states of the US, there is what you call the pre-foreclosure stage and the foreclosure stage. Some states use the Judicial Method and others use the Non-Judicial Method. Still others use both types of procedures.

Real estate investors in the US who specialize in pre-foreclosures and foreclosures find that this particular domain in real estate is the most exciting for them. They know that banks usually don’t like to keep foreclosed properties on their books too long and therefore sell them for a song. It’s not that easy, though. Be careful when you’re buying a foreclosure. You have to carry out due diligence on the property to make sure it is free and clear of any liens or lawsuits.

What does a zealous real estate investor do when he dabbles in pre-foreclosures and foreclosures? One thing to bear in mind is that investors keep their antennas up when it comes to city hall proceedings. It could be the town registry or the county clerk or whatever municipal name it’s given. When an individual defaults on a mortgage payment, he receives a Notice of Default. This does not mean that he has lost his house.

When a Notice of Default is received, lenders are usually willing to negotiate with the houseowner so a payment could be made. Depending on which state you live in, this Notice is good for 30-90 days, which means the defaulting party has up to 3 months to clear the matter (it is shorter in some states).

If after 90 days the loan still has not been paid, steps are taken to send the homeowner a Notice of Trustee Sale. This means he is about to lose his house. A date is scheduled for bidding at the courthouse, and this is how you buy a foreclosure in the US.

Savvy real estate investors will actually act before the Notice of Trustee Sale. They come into the picture when they see in the public records that a Notice of Default has been sent to the property owner. What do they do next?

The investor calls the property owner and offers to buy his property before it goes into foreclosuree. He offers an amount of money to the houseowner, knowing full well that the poor houseowner is at his wits’ end because he’s been served notice, and may agree to sell his house to the investor at a ridiculously low price – just to avoid having to face the court.

In some cases, an investor will even allow the houseowner to remain in his house. The investor simply charges him a monthly rent.

Buying a Foreclosure: Take a Closer Look

Buying a foreclosure may be one of the ideal ways to make money in real estate but the classic “buyer beware” principle applies. To get a decent return on your investment, make sure that the property is not a doghouse or an outhouse. If the homeowner has defaulted a few times, that means he did not have the financial capability to meet payments, and thus would be equally restricted in maintaining the house.

If the house is in disrepair but is in a good location, investors may be able to drive a good bargain. Be wary of properties in deteriorating neighborhoods. No amount of renovation would let you recoup your investment 100%. Or if you do, it may take a long, long time.

The extent of renovations may also go beyond the budget you have set aside for this purpose, because remember, when a house goes into auction, it has not undergone any inspection. How comfortable are you about buying property that has not been inspected?

Also, it is a smart idea to be aware that not all foreclosure prices are bargain prices.

Ready to Buy a Foreclosure?

Before you do, get access to reputable databases or foreclosure notice services that run an updated list of pre-foreclosures and foreclosures in your region. Some services provide this service for a fee, and it churns out information on all Notice of Default, Notice of Trustee Sale and REOs (real estate owned by banks; that is, properties repossessed by the bank).

If you insist on buying only foreclosures, we mentioned due diligence the first time but we’ll mention it a second time. Make sure you’ve got the documentation in order; otherwise get a professional to help you.

Investors agree that the best approach to buying a foreclosure is to do it with a private homeowner. The court hassles don’t bog you down and as long as the seller and buyer agree on the terms, everyone should come out a winner. Well, the houseowner will probably comes out less of a winner because he’s selling his house for under market value – but at least selling to a private investor takes away the burden of a judicial proceeding.

Foreclosures by auction are best left to experienced investors. You can still get into the auction game, but do roll up your sleeves and start doing your homework before you venture out into your first auction with your checkbook!

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When we talk about new build homes there are two options to consider. The first is the custom home that’s been designed specifically for you, with all the details that you wanted, while the second is what’s called a ‘spec’ home, and while there are benefits to buying the latter kind of home, there can also be drawbacks.

What is a Spec Home?

First let’s talk about what exactly a spec home is because it’s important to note that spec homes can have different names, depending on where you are in North America – you may hear it referred to as a move-in ready home, featured home, inventory home, or immediate delivery home, but basically these all mean the same thing.

A spec home is a house that has been designed and constructed by a builder without a specific buyer in mind. Basically the builder has taken the chance that he will be able to sell the home once complete, or near completion. Obviously the builder is taking a little bit of a gamble here, hoping that a buyer will come along before too long, and because of this he wants the home to appeal to as wide a market as possible. The architecture, therefore, will be based on a standard plan, probably using a design that’s popular for the neighborhood they’re building in. Usually the fittings will be what’s called ‘contractor or builder grade’, though some builders may offer the chance to upgrade for an extra cost.

The Advantages of Buying a Spec Home

Really there are three big advantages to buying one of these homes: the fact that you can move in very quickly, the fact that it’s completely new, and the fact that you can see exactly what you’re buying.

Move In Ready

A spec home is usually offered for sale very close to, or at its completion, and considering the builder is likely to want a quick sale you can often move in very quickly. The only thing delaying the process is likely to be your lawyer, making sure everything is in order, but if they can get through the legal process quick enough, you could be moved into your new home within a couple of weeks! This makes a spec home a great choice for a buyer who wants to move quickly; whether it’s your first home, or you want to be moved out of a rental home before the end of the month.

It’s Completely New

The fact that a spec home is completely new is appealing too, and though this isn’t always the case, some builders may allow you to choose your own paint colors and finishes, or negotiate some upgrades, if you approach them early enough. This way you to get to make some of the decisions and end up with a home that you’ve had at least some say in the look of!

You Get to See the Home Before You Buy

When you’re paying for a custom built home, it’s going to be some time before you really start to see it take shape, and during that time there are bound to worries over the quality of the craftsmanship. With a spec home you get to see it before you buy and you have the opportunity to inspect every corner of the home to make sure you’re happy with the finishes.

The Disadvantages of Buying a Spec Home

The biggest disadvantage of a spec home is choice, or rather your lack of choice. You will have to live with all the decisions that someone else has made. Things like the overall architectural style of the home, and the internal layout and room configuration, so a spec home isn’t for a buyer who prefers to be individual and wants a home that looks different to everyone else!

The same applies for the finishes too, whether we’re talking about paint colors, kitchen and bathroom fittings, lighting, and appliances. The builder is likely to have chosen items that he can get at a contractor’s rate, and while they may be of a good enough quality, they are unlikely to be high-end, so you’ll need to live with these things, or change them at your own expense.

As mentioned above, you may be able to have some say in the finishes, depending on how close to completion the home is. Though often you will still be forced to select from a list of options, so even then the choice is not completely your own.

Things to Remember When Buying a Spec Home

So if you’re still considering buying a spec home there are some important points that you should remember…

Even though the home is completely new, doesn’t necessarily mean everything is in working order. You MUST get a home inspection so that plumbing, electrical, HVAC and more can all be checked by an independent, unbiased inspector. And choose the inspector yourself, do not go with one recommended by the builder.

Use a real estate agent to help you through the buying process – you won’t have to pay them a cent yourself as the builder pays for this, but their experience will be invaluable and likely save you a lot of time and headaches.

Finally, don’t forget to ask if you can make any changes to the home, even if it’s already complete, as some builders will allow this. Paint colors and flooring are possibilities, while some builders may offer an upgraded appliances package.

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A show home will usually feature all of the possible upgrades and many designer touches. It’s a “new home” in the sense that no one has lived there, but everything is already done and move-in ready.

With the real estate market in a slump, most building companies are cutting back on new construction. In order to save money, many builders are selling off their model homes. Builders figure that they can gain some money now to tide them over and when the market picks up again, there could be new building trends or new neighborhoods to focus on that would necessitate building new model homes anyway.

So buying a show home from a builder can be a real win-win situation. There are just a few things to keep in mind when you’re looking at model homes.

Pros and Cons of Buying a Show Home

The biggest pro of buying a show home is that everything is top-of-the-line. Remember, this is the builder’s advertisement for himself, and when builders sell homes, the more upgrades they can sell, the more money they make. This means that show homes usually have upgrades on flooring, cabinets, countertops, molding, lighting, windows, doors, architectural details, appliances, and other fixtures.

Show homes are also usually professionally decorated. Builders will normally want to keep and re-use any furniture that they’ve brought into the home, but you often get extras like curtains, blinds, floral arrangements, or even art. In most cases, the builder will have had professional landscaping done as well.

You can often find extras like decks, fireplaces, spa tubs, or even a pool—things things that would add many thousands of dollars to the price if you paid to upgrade during the building process—already included.

This might sound ideal, but there are a few things to keep in mind. Make sure that you ask if the house has even been lived in, even temporarily. Don’t make assumptions. Even though the vast majority of show homes are used as models only, the builder may have allowed someone to stay in the house, or even lived there for a bit himself.

Also keep in mind that even if the house has never been lived in, it’s still been visited, possibly by hundreds of people. The carpet had probably seen frequent shampooing to keep it looking new, and the walls may have had frequent paint touch-ups. Ask the builder up-front about any damage that has been sustained. Sometimes, if an accident occurred in the home, the builder may have repaired it cosmetically, but not necessarily with an eye towards durability.

Before you buy, spend some time in the house, moving from room to room and assessing the practicality of the home. When builders build show homes, sometimes they out-do themselves to make the home as beautiful as possible, but it loses some practicality in the trade-off. Sure, that double-sided fireplace may be a conversation piece, but does it leave you without a place to put your television?

When you have a home inspection completed—something you should do before you buy any home—make sure the inspector knows that it was a model home and have him or her check accordingly. Sometimes, since no one actually used the house for living, builders will cut corners like not properly installing appliances and merely fitting them into the openings, or leaving tub enclosures unsealed. Be sure that the house is really ready for living, not just looking at, before you sign on the dotted line.

Closing the Deal on a Show Home

As with every home sale, it’s important to have someone on your side. Buying a show home is a great way to find your dream home and enjoy all of the top-of-the-line amenities that you might otherwise be unable to afford. However, don’t let your excitement cause you to go in blindly. Find a Realtor or real estate lawyer that you can trust who will review the paperwork before you close the sale.

Remember that this is a buyer’s market. Even though show homes are rare finds, you shouldn’t feel pressured to close on the deal too quickly. Builders who have built show homes must have large, thriving businesses, so they will undoubtedly have more experience with home sales than you—don’t let them take advantage of this disparity.

Having a real estate professional walk you through the sale will help you avoid the pitfalls that come from being overeager. Take the time to protect yourself, and you’ll have a gorgeous new home and be the envy of your family and friends. Good hunting!

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The Seller’s Market

What happened that year is called a seller’s market. Seller’s markets are a result of a combination of the following events:

• There are very few homes on the market. Either the homes are selling before they are even listed, or people are just not interested in selling. Fewer homes are being built as well. These conditions often occur in areas where the maximum number of dwellings that can be fit in has been reached.
• Lower interest rates. Interest rates are of crucial importance to the home buyer. A low interest rate, usually brought on by a nation’s financial leaders, means that potential buyers will not be paying as much to lending companies on their mortgages. This can be a huge incentive to buy, as even a one percent interest change can mean thousands of dollars in savings on a major purchase such as a house.

Seller’s markets are not applicable to all real estate niches. In fact, even during the big boom of 2005 there were still many areas nationwide that did not see a substantial gain in house prices. Housing prices are always contingent upon regionality, so one way to avoid a skyrocketing market is to look in a location that other people might deem to be less desirable.

Buying in a seller’s market

The thing about a seller’s market is that it is self-sustaining. Everyone benefits from the cuts in interest rates, and therefore everyone is interested in buying a house while they can get a mortgage at these lower rates. In turn, there are even fewer houses available on the market. Buyers must be prepared to do some preparatory groundwork before looking for houses, and should be prepared to act quickly when they find a home they like.

Preparing ahead of time

Before going out to look for a house in a seller’s market, buyers need to get a few things out of the way. The first thing to do is to get pre-approved for a mortgage. Pre-approval means that when it is time to make an offer, the seller of the house you are interested in will see that you have the money at your disposal already. When there are several bids placed on a piece of property, those that do not already have the proof of funds are going to be the first ones thrown out.

Some experts in real estate are also saying that having more cash for the down payment will help get a foot in the door for a bid, but how this entices the seller is not entirely clear.

You should also secure the services of a good agent before you go out looking for a house. Seller’s markets mean that many homes are sold before they are even listed; when they are listed, they are only on the market for a matter of days or, in the case of 2005, hours. Agents usually come with a lot of connections; they are aware of who is selling where and can give buyers a good heads-up when a potential home is on the market. Agents are also attuned to what clients are looking for, so their advice can be invaluable when making a purchase. An agent can also help in discerning exactly how much a buyer should bid on a home; too high, and you stand to lose money on your investment. Too low, and the seller may just turn up their nose.

Finding a house

Once you have completed the prep work, it is time for the legwork. Look for prices in your range on the internet in conjunction with tips from your realtor. Remember, you are going to have to move quickly whenever you see anything that grabs your interest. Still, don’t be too hasty and make bad decisions. Once you are in the house, take your time and look around to make sure it really is worth what you are willing to pay. Many home owners will count on the houses to sell themselves in a competitive market, but making a hasty decision now may cost you in the future.

It is probably wise to go out into the market prepared with the very maximum amount that you will spend on a house. Whatever you do, don’t exceed this amount. You may be able to get help on the initial mortgage through a co-signer or even an informal loan, but any debt accrued is debt that must be paid off.

Some potential buyers are using unconventional strategies when they place bids on houses. Writing out proposals to buyers is one method that has been tried, although how effective it is is hard to determine. If you do decide to write a letter, don’t make it too personal. Other buyers are offering sellers bonuses such as televisions or even vacations; these can usually be arranged through company discounts or air miles programs.

You could always wait

Some people decide just to wait and see if the storm in the real estate market passes by. Historically, there is evidence that the feeding frenzy will slow down and that buyers will not have to compete so heavily against each other for similar houses in the market. However, waiting too long can be risky, as housing prices are unlikely to fall and interest prices are likely to go back up. In this event, those not already in the market may find themselves unable to get in without significant help.

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