 |
|
|
The article below gives an overview
of the key steps involved in buying your first home plus .
|
|
The
three steps are:
1. Decide when to buy.
2. Decide where to buy.
3. Make sure you get what you pay for.
Click here
to calculate your mortgage schedule.
|
|
|
| Decide
When to Buy
|
Is
this the time to become a buyer rather than a renter? Here are
some issues to consider:
Basically, the longer you are likely to remain in a
residence, the more advantageous it is to own rather than rent. If
your job and family status are likely to be stable for the next
few years, then your housing needs should also be stable. This
means that it is time to think in terms of buying.
In general, if your salary just shot up by 20 percent
or more, now is not the right time to buy a house. Instead, use
the extra income to save up for a year for a down payment, and you
will find yourself in a much better position to buy at that time.
(Note: the opposite advice applies if you have just
received a one-shot bonus or capital gain. With a large lump sum,
now is a good time to consider buying a house.)
Generally, if the price of a house is not more than 20
years' rent on a comparable residence, market conditions are
reasonable for buying.
|
Compare
the rent on a residence with the price of a comparable home for
sale, and figure out how many years of rent is represented by the
house price. For example, if the house costs $90,000 and a
comparable residence rents for $500 a month, then the house
price represents $90,000/$500 = 180 months = 15 years of rent.
It is a good time to buy when this figure is less than 15 years.
It is a good time not to buy when this figure is more than 25
years.
This simple formula does not apply to condominiums, because
it does not include condominium fees. Personally, my inclination
is to recommend that people who are buying their first home should
shy away from condominiums altogether. Condominium complexes that
appeal to first-time homebuyers have a tendency to turn into
rental communities, because of the high degree of overlap between
young renters and young buyers. Therefore, as an investment,
condos can be highly speculative, and the price easily can go up
or down 20 percent in a hurry depending on luck and timing.
|
| Decide
Where to Buy
|
The
next big question about your first home is deciding where to buy.
As the saying goes, what matters is, "location, location,
location."
The first step is to identify a neighborhood where you
would like to live. People take into account factors such as crime
rates, school quality, commuting time, and neighborhood amenities.
Also, families with young children want to make sure that there
will be other children in the neighborhood. List the criteria that
are important to you, and focus on neighborhoods that meet those
criteria.
|
Many
people find that they cannot afford the perfect house in the
perfect neighborhood. This means that you have to compromise. In
the long run, most people find it easier to live with a
less-than-ideal house in the right neighborhood than the other way
around.
The best time to engage the services of a real estate agent
is when you have identified the criteria that matter for you in
choosing a neighborhood. Once you can articulate the factors that
you consider important, the agent can tell you which neighborhoods
meet your criteria and help identify houses that fit within your
budget.
|
| Make
Sure You Get What You Pay For
|
You
can remove a lot of the risks of buying a house by taking sensible
steps well before the property changes hands. Issues that might be
resolved easily if they are addressed early in the process can
become very awkward as settlement gets closer.
When you buy an existing home, two precautions to take are
to hire a real estate attorney and to hire an inspector.
Spending between $250 to $750 for an attorney is a small
price to pay when you're making the biggest investment of your
life.
|
Smart
brokers always advise their buyers to have the home inspected by a
professional inspector or someone you know is knowledgeable about
construction matters and issues involved in residential
properties.
When you buy a new home, keep in mind that many of the
complaints that people have about new homes could be avoided by
making small improvements in design. You can be much happier with
the home that you buy if you understand design issues and work
with the builder to implement designs that are right for you.
|
| Moving
Hints: From Packing to Paying
|
Finding
a Moving Service
We recommend that you select a carrier five to eight weeks
before you move. When talking with a potential moving company,
keep in mind whether you are moving locally, intraprovincial (within
a single province), or interprovincial (from one province
to another). The type of move you are planning is important; it
will determine what regulations, licenses, and pricing structures
under which the van line must operate.
Ask friends, your employer, and co-workers for
recommendations, and check with the Better Business Bureau about
the company's standing.
Get several written
estimates. The only way to get an accurate estimate is for the
mover to come to your home and see everything you want moved. Be
sure to ask if there is a charge for an estimate. Remember, unless
you get a binding estimate, the final cost may be higher than the
original quoted price.
When comparing estimates, remember the cheapest company
won't necessarily do the best job. If one firm's estimate is lower
than the others, then find out why. Are the services and the
mover's experience equivalent? Are all the estimates binding?
|
If one or more of your
items requires special handling, like a piano, make sure that the
mover has the experience and equipment to do the job. Find out
what they will not move, generally high value items like coin
collections, jewelry, or stocks and bonds. Movers also will not
move dangerous items such as corrosives, explosives and other
flammables.
To keep down the cost,
dispose of unnecessary or hard-to-move items before you get an
estimate. Reconsider taking appliances, motor vehicles (boats,
campers, motorcycles, etc.). If you have been wanting a new
refrigerator, now may be the time to sell.
Be sure you understand the moving contract. Write "subject
to further inspection for concealed loss or damage" on
the contract when you sign it to protect yourself in case you find
damage while unpacking.
Ask to see a copy of the mover's annual performance report.
Movers are required to provide information about past performance
and complaint handling procedures. They are also required to
provide you with a copy of your moving rights and
responsibilities.
|
Moving
Make an inventory list and label the contents of all boxes.
When the van arrives at your new location, be ready to pay
the charges so the crew can unload your shipment. Carefully check
your inventory list and mark any discrepancies on the driver's
inventory list before you sign it. Note any damage to the outside
of cartons.
Unpack any items of high value, such as silver or works of
art, immediately.
If you want the movers to unpack for you, be sure to inform
them prior to delivery. Ask if they will dispose of empty cartons,
etc.
|
Do-it-Yourself
Packing
- If you choose to use a moving
company, you can save hundreds of dollars by packing some
things yourself; however, the mover probably will not accept
liability if the items you packed are damaged during the move
when there is no visible damage to the exterior of boxes.
- Pack heavy items in small
boxes.
- Protect mirrors, glass-framed
pictures and artwork with a protective glass tape and bubble
wrap.
- Label all boxes clearly. Mark
breakable items "Fragile."
- Pack glassware in a carton
specifically designed for that purpose. Pack plates on their
edges, not flat.
|
Insure
Your Valuables
There are three types of insurance coverage that are
industry standards. Be sure to ask movers to price out all the
options so you can make an informed decision. Make sure you
understand claims procedures.
- Full Value Replacement,
provides the most comprehensive coverage (replacement or full
repair) but requires a larger additional fee. Some movers
offer special deductible options that cost less but may leave
you paying for small losses outright.
|
- Depreciated Value (or
standard protection), an additional charge, insures your
shipment based on the weight and value of your possessions;
however, with this type of insurance, the mover is only
responsible for the determined depreciated value of each item.
- Basic Liability, is
often included at no additional charge, but does not cover the
full repair or replacement of a damaged article.
|
|
|
