Introduction

Shopping for a house can be daunting, but with a little planning, you can end up controlling the process instead of letting it control you. What do we mean by that? We're saying the search process begins at home where you and your family can sit down and determine what you're looking for in a home and neighborhood. What should you consider first: neighborhood? realtor? local schools? new house? fixer upper? design? These are all important questions and ones you should try to answer before you shop.

In the following pages 1st Source Bank provides helpful information that you can use when you search the real estate market for your new home. Reading through this material will answer many questions and give you others to think about. Just click on the buttons to help you make an informed choice for you and your family.

Make a List

An excellent way to begin searching for a new house is by staying home. That's right, don't leave the house. Instead, get some paper and a pencil and begin by evaluating your lifestyle. This will help you determine your wants and needs. Are you single? Married with no children? Have a large family? Just about to retire? Plan on living in the house only a few years?

Clarifying your lifestyle helps you pin down what's important to you now and in the future. Make two columns, one for needs and one for wants. What's the difference? Wants are those things you would like to have but can survive without. Needs are things that you are not willing to compromise on. Here are some examples.

Needs:

• Number of bedrooms and bathrooms
• Room size
• Garage
• School district
• Proximity to work and school
• Access to public transportation
• Room for animals
• Proximity to family

Wants:

• Neighborhood
• Old vs. new
• Extra features
• Design
• Proximity to entertainment and shopping
• Lot size

Consider your needs now and in the future. Remember that some day you will probably move so it's important to consider how easy the home will be to resell. It may just be you and your spouse right now, but is there room for a family somewhere down the road? On the other hand, big houses with grand stairways and large yards are great places to live, but may be too much if you're nearing retirement.

These considerations are all very important and to make the task easier 1st Source Bank provides you with a Home Buyer's Planning Guide to help you pin down exactly what you're looking for in a home.

Pick Your Neighborhood and Home Type

Choosing where you live is one of the primary decisions when searching for a house. Do you want to live in a neighborhood in town or would you rather locate in the suburbs? Many of our suburbs are old and beginning to decay while many of our downtowns are experiencing the renovation and construction of desirable housing. A move to the "burbs" no longer guarantees a more attractive neighborhood.

The type of house you're looking for also plays a role in the neighborhood you'll choose. If, for example, you have your heart set on a newly constructed home, you probably won't find it in a city setting. If a "fixer-upper" is what you're looking for you may find yourself attracted to established city neighborhoods and housing developments.

If you have children or are planning on starting a family, the school district you live in will be an important factor in your choice of neighborhoods. This is also an important consideration when looking to the future and the possible sale of your home. Location in a superior school district makes your home more attractive to more buyers when the time to sell arrives.

All of these decisions point out the importance of determining your priorities from the beginning. Knowing what's most important to you in a home and location before you start window-shopping can save you loads of time. But remember, the "perfect" house is difficult to find if it exists at all, decide where you are willing to compromise and where you're not.

Choosing a Realtor

Most people who buy or sell a home use the services of a real estate agent. Real estate transactions are complicated and time consuming so an agent is usually an indispensable part of the process. Do they get paid a healthy percentage of the sale? Absolutely, but they provide a great deal in return and, as the buyer, you pay nothing. Can you buy or sell a home without one? Sure, but you had better be prepared to devote a whole lot of time and effort to the endeavor.

Here are some of the advantages to using a realtor.

• Use MLS as a powerful search tool - About 90% of all homes for sale are listed on the MLS (multiple listing service) and a realtor has access to all of that information.
• Help narrow your search - Give them your "wish list" and they will be able to narrow your search by zeroing in on the homes that meet your needs or, at least, come the closest. They know the area and its neighborhoods, and have access to all kinds of information.
• Familiar with the community - Realtors know real estate values, property taxes, utility costs, schools, municipal services, pending zoning changes, and more. If you have a question about any of these, your realtor will find the answer for you.
• Provide due diligence - Depending on the area, this may include inspections for termites, dry rot, asbestos, septic tank condition, faulty structure, etc. They will help you find qualified companies to carry out these inspections.
• Help with transaction - Your realtor will help you through the complicated transaction including negotiation of the price. They will make sure that everything is ready for closing and will work with the mortgage company to set up appointments.

Real estate agents provide a very valuable service when buying or selling a home but there are some very important points you need to remember.

The agent that shows you prospective properties is, most likely, the seller's "fiduciary." This means the home is listed by them and they must act in the best interest of the seller, not you. That relationship becomes very important when you enter into the negotiating process.

For example, you've made no secret of your enthusiasm for a particular home, the agent is bound to communicate that to the seller. If, on the other hand, the seller has told the realtor how low they are willing to drop the price, the agent is under no obligation to tell you and will not offer the information. Who the agent represents though, is not as important as their business ethics. They are not out to cheat anyone and they hope your experience is positive so you will use their services in the future.

The very best way to find an agent is to ask your friends, relatives, neighbors, and coworkers. They have first hand knowledge of realtors they've worked with in the past and can relate the experience to you.

Using a realtor will help you with your search, but you can conduct your own search. These are tools that can help you find the home of your dreams.

• Word of mouth - Let your friends, relatives, and coworkers know you're in the market for a house. They may know of a good prospect just as it comes on the market.
• "For Sale" signs - Now that you're looking for a house, you'll notice every "For Sale" sign in the county. It's fun to get in the car and drive around looking at different neighborhoods and homes.
• Newspaper ads - Grab a cup of coffee and the local newspaper. After you've circled a few ads that look promising, head out in the car and take a look. The paper will also help you find the location of current open houses and the times when they're open.
• Multiple Listing Service - The same MLS that your realtor uses can be found online. You can use this informative network to look for homes in Indiana, Michigan, or any other state from the comfort and privacy of your own home.
• Real estate guides - These are the real estate magazines you find at grocery stores and restaurants. They contain listings from most of the local realtors. In them you will find a small photograph of each home accompanied by a brief description and the selling price.

After you start looking at homes, let 1st Source Bank's Home Visit Checklist help you keep track of the homes you visit. By completing this check list after you leave each home, you'll be able to easily compare homes when the time comes to narrowing it down to the one you want.

Have fun using these tools to find a home of your own! Take time to enjoy the process, but remember that buying a home is a big decision. Make sure you explore all that your community has to offer.

Make Sure You Ask These Questions

When you get the chance to visit the homes you're interested in, here are some of the questions you should be sure to ask.

• Are you the listing agent for this home?
  • Sometimes agents will get busy and have other agents or assistants show the house. You want to talk to someone who's knowledgeable.
• How long has this house been on the market?
  • Homes in good conditions that are priced reasonably usually don't last long. If this one has been on the market a long time, find out why.
• Have the owners received any offers and, if so, why weren't these offers accepted?
  • Find out if the offers were simply too low or if the owner placed difficult conditions on the sale.
• Why are the owners selling?
  • Knowing the owner's motivations may help you put together a stronger offer. Are they moving out of state? Are they building a house and have a timetable to meet?
• Are there any fixtures, furniture, or appliances being sold with the house?
  • Often sellers don't plan to take these items with them or would prefer to avoid the hassle of disposing of them. Often they are used as negotiation points after an offer has been made.
• Are there any special costs connected with owning the property?
  • Examples are: association fees, special tax assessment districts, and flood hazard zones.
• How does this home compare with others on the street?
  • A good agent should know of any recent or pending sales in the same neighborhood and the asking prices of those homes. If the residence is a tract house, the agent might be able to share some remodeling ideas they've seen in nearby homes.