Your Money_ The Missing Manual - J. D. Roth [106]
Ask the seller to pull a CLUE report (http://tinyurl.com/clue-rpt). The Comprehensive Loss Underwriting Exchange is a database the insurance industry uses to track insurance claims connected to people and property. A CLUE report tells you what sorts of claims were filed at the address during the past 7 years. You can't order this report yourself—only the person who owns the property can.
Get an independent inspection. A good inspection will cost several hundred dollars, but it's worth every penny. Ask friends, family, and coworkers to recommend inspectors. Don't use an inspector recommended by the seller, broker, or real-estate agent; you want somebody who's thorough and tough, and whose livelihood isn't tied to others in the process. Tag along during the inspection and ask questions. (You may want to film the house at this time.) Don't panic if the inspector finds problems; instead, use them to negotiate.
Talk to the neighbors. Ask about the house and the neighborhood. The seller may be reluctant to spill the beans on the garage conversion he did without a permit, but the old guy next door probably won't be.
Stay on top of things. The home-buying process involves a lot of people, and they're usually juggling lots of other deals, too. Don't be afraid to be the squeaky wheel that needs a little grease. Your questions may drive people crazy, but that's okay. What's worse: To annoy the title-insurance company or to lose tens of thousands of dollars because you were too chicken to speak up?
Do a final walk-through. On the day before you close the sale, ask to take one final pass through the house. Are the window treatments there? Are the light fixtures still the same? Have requested repairs been made? Your goal here isn't to do another home inspection or to find things to negotiate on, just to be sure everything's in the same condition as when you made the offer.
Tip
Don't finance your closing costs into the mortgage. It might seem like a good idea, but it means you'll pay twice as much for them in the long run.
Ask to read the mortgage paperwork before closing. (Closing is when you sit down and finalize the deal by signing all the necessary paperwork.) This is the most important item in this list. You're likely to sign more than 100 pages filled with legal gibberish—do you really want to read it for the first time at closing? What happens if you discover there's a penalty for prepaying the mortgage? Or that the contract specifies a term of 15 years instead of 30 years? If you don't read the contract, you have nobody to blame but yourself if something goes wrong. If you need to, have a lawyer review the paperwork. This is likely to be the biggest legal contract you ever sign, so take the time to get it right.
Tip
If you don't already have a lawyer, consider hiring a real-estate attorney to review your mortgage paperwork. It'll cost you a few hundred bucks, but that's peanuts compared to the hundreds of thousands you're spending on your home. Besides, during this process, your lawyer will be the only other person actually in your corner representing your best interests.
Owning a Home
After all that research and hard work, you've finally got yourself a home—congratulations! Of course, your responsibilities don't end there.
When you rent a place to live, your only cost is the monthly rent payment (and maybe utilities). But when you own a home, the costs never seem to end. In addition to monthly mortgage payments, you have to pay property taxes, homeowners insurance, utilities, maintenance and repairs, redecorating, landscaping, and more.
Let's look at two of the most important expenses: maintenance and repairs and paying the mortgage.
Tip
For a look at the true cost of owning a home, read Cameron Huddleston's account at Kiplinger.com: http://tinyurl.com/homecost.
Saving Money through Regular Maintenance
Your house is like a living, breathing organism. As much as you try to keep things in working order, eventually something goes wrong—and usually at the worst possible time.