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The Internet Can Help You Find By Michael S. Gottlieb, Esq.* Introduction It’s almost springtime, so soon it will be time to go house shopping. If you’re not careful, though, home buying can become a full time job, and if your boss is anything like mine, s/he won’t be too thrilled if you accept that new job! Chances are good that you don’t have hours and hours of free time to go shopping for your next (or first) home, nor would you want to! Fortunately, if you want to find the perfect house (without quitting your day job) there is a wonderful, time saving tool available: the Internet! You can perform all of the following tasks online to cut down on the amount of time you’ll spend buying your new home:
Best of all, you can do this all in the relative comfort of your home (or your work computer - on your lunch hour, of course). You’ll be able to eliminate telephone tag to trade minor pieces of information, you’ll have access to most everything you’ll need to buy your house with less cost and stress than you ever thought possible.
Finding Your Dream House Up until a couple of years ago the only way to see a selection of homes was either to see a Realtor® or thumb through the classifieds of your local paper. Now, however, many of the realty companies have websites that allow you to take virtual tours of homes (or at a minimum, view pictures and brief descriptions) of their listings online (visit http://www.housebid.com). As helpful as these sites are, you may want to investigate some of the other real estate web listings available, such as:
Now that you’ve found some potential homes to investigate, you’ll need to locate these homes in the real world. Again, the Internet can come in quite handy. By creating customized driving directions with a few quick keystrokes, you’ll be on your way to your new home! Pre-Qualifying/Interest Rates/Financing/Loan Shopping Before you get too far along in the quest for a new home, it’s advisable to look into pre-qualifying for a loan. When you pre-qualify for a loan, the bank tells you the upper limit they’ll lend you to purchase a new home. If you earn $25,000 a year, your lender probably won’t agree to loan the $1.9 million needed to purchase the local mansion. Knowing what they are willing to lend can help you focus in on the right neighborhoods for your budget. Many banks and numerous other sites provide online calculators that will provide guidance as to how much house you can afford, what your monthly payments can be, and numerous other valuable calculations. Shopping for the best deal on a loan is not the most enjoyable aspect of shopping for a home, but it can make quiet a difference in what you can or can not afford. The difference of a 1/4 point on your interest rate can make the difference between qualifying for a house or not qualifying for it. That 1/4 point can push your income ratios to beyond what is acceptable for the lender and therefore disqualify you for that loan amount. While online, you can learn all you need to know about current interest rates, and you can determine who has the most favorable combination of good reputation and good financing packages. It’s not worth saving a 1/8 or 1/4 point to go with a lender with an iffy reputation who may not be here tomorrow. Regarding financing packages, remember to ask the lender about the fees they intend to charge you. Usually you’ll have to pay for an appraisal, credit report, flood certification, points (more on those soon), and a plethora of potential other fees. You may be offered a great rate, but if that rate is accompanied by several thousand dollars worth of fees, it may be not be your best deal. If you are new to house shopping, you may not be familiar with points. Points refer to percentage points of the property price that you pay upfront (at settlement) usually for the purpose of lowering the Annual Interest Rate that you will pay to borrow the money. For example, you wish to borrow $100,000 to purchase your new home and the lender indicates that you can do so with no points and at 8.5%. If you have some extra cash available, you may want to negotiate a lower rate and offer to pay points up front. This way perhaps you’ll pay 1, 2, or 3 points ($1,000 to $3,000) up front, but in exchange you’ll get a lower interest rate. That decreased rate will likely save you a lot more than the points you paid over the life of the loan. On the other hand, if you don’t have a spare pile of money (above and beyond the down payment) to use towards points, it may be better to pay a slightly higher rate to minimize the amount of cash required for settlement. If the lender wants you to pay a higher rate and points, it may be time to look for a new lender. If a lender tells you that you can’t have as much money toward the house as you’d hoped based on your credit history, you can even pull your credit history online to make sure that everything on the report is proper.
Real Estate Assessments and Taxes You’ve narrowed the choices down to a reasonable few, so now it’s time to really do some Internet digging. Many localities provide the assessed value and previous sale price of real property online, so you may be able to find out exactly how much the house you are interested in cost the current owner. If that information is unavailable, you may be able to learn what other homeowners in the neighborhood paid for their properties. For example, If you live or plan to move to Maryland (one of the most Internet savvy states in the U.S.!), you can check out their real property database at: http://www.dat.state.md.us/sdatweb/charter.html. This comparable pricing information used to be available through RealtorsÒ or by going to the county land records and sifting through an incredibly difficult paper trail. Now, with just a few clicks of the mouse, you will be armed with some serious negotiating power. Your real estate tax rate may affect whether you wish to live in one locality versus another. For example, your county of choice will likely require that you pay real estate taxes on the property, but if the city within the county also requires taxes, that can get quite costly. It’s certainly worth the online trip to your county and city homepages to see if they provide tax rate information. Further, there may be first time homebuyer credits or senior citizen or lower income exemptions or credits.
Moving Moving can be an extraordinary expense and finding the right mover is not an easy job. Check out the following website for some guidance on the price you should expect to pay movers to bring your possessions to your new home: http://www.homefair.com/calc/movecalcin.html?NETSCAPE_LIVEWIRE.src=homefair Also, check out some of the websites with forums to see if someone in your new location has had positive dealings with a given mover. You’re trusting nearly everything you own to these movers, so it is worth the effort to locate one that has a good reputation (don’t just go by the mover’s own website). Visit your local Better Business Bureau’s website, if available, to see if any complaints have been filed. Cost of Living Part of moving is trying to determine what the relative cost of living is going to be in the new place. That has always been extremely difficult to do…until now! For example, suppose you want to know the amount of money you will need to earn to maintain the same lifestyle in Manhattan as you currently have in Columbia, South Carolina, go to:
Change of Address Filling out change of address cards is one way of changing your address, but the Internet makes that chore much easier. At the US Postal Service website (http://www.usps.gov), you can prepare your change of address online and then print it out and provide it to your mail carrier. For the litany of other address changes that will need to occur, many can be done online by going to the provider’s website. A new website, http://www.startsmart.com can do all of this administrative address changing for you and they do it for free!
School Reports/Neighborhood Reports It’s one thing to move across the street to a larger house, but what if you are moving to an area that’s new to you? How do you know if the kids on your street will go to the good school 5 minutes away or the other school that’s 30 minutes away? Check the Internet. You may be able to find out graduation and college attendance rates, average SAT scores, and sports information about local schools. Knowing this can help you decide if you want your children to go to a specific school or whether you should be looking for a different school/neighborhood. Speaking of neighborhoods, it’s great to know a little something about a potential neighborhood before moving in.
Finding the Right Settlement Agent Selecting the right law firm or settlement agent is important because they can make the process virtually stress free or turn it into a nerve-racking experience that you’d sooner forget. Look for an attorney who has the technical savvy to assist you through the home buying process the way you want it to go. There are a small, but growing number of settlement attorneys that are online and that can do much of the paper pushing via e-mail or through their websites. E-mailing documents back and forth and submitting questions or requests for information online or via e-mail are just a few of the activities that can facilitate a smooth transition. Eventually, we’ll be able to file the legal documents online, but until then, you’ll certainly appreciate having a forward thinking settlement attorney to help guide you down the pathway of buying your new home. The real estate attorney’s role in the process is fairly well hidden, that is until settlement day (or if a problem develops). However, the role of the attorney is a significant one, as they must thoroughly understand the law and local procedures for handling real property transactions. Further, they must actively follow the changes in real estate law to ensure compliance with these changes. Additionally, they should be able to guide you through the maze of documents prepared by the bank for your signature. They should resolve the potential problems (to the extent possible) that may affect your ability to settle on the property in a timely manner (title issues, liens, etc…) and they should be there to facilitate a stress-free transition between the buyer and the seller. You can learn more about the settlement process and the fees associated with settlement at:
The Final Touches You may even be able to arrange to transfer the utilities and/or services for your new home right over the Internet. A quick check of one of the many search engines will reveal whether the company you need to be in touch with has a website (many of them do). If your new home is like most, there will be a few home repairs or improvements that you need or wish to undertake as soon as you move in. Within a few key clicks, you can learn all about doing the repairs/improvements yourself, or if you prefer, you can find the right repairperson for the job online!
Conclusion The Internet is a wonderful tool that can save you lots of time and effort and potentially a great deal of money by finding the right home and the best lender online. Ten years ago we had no such resource to access this type of information, so purchasing a home had the potential of being a much more stressful experience. Now, buying a home has become essentially a point-and-click purchase!
* Mr. Gottlieb, an attorney with the Washington, DC law firm of Jacobs & Associates (http://www.internet-law-firm.com), practices Internet/high-tech, intellectual property, corporate law and conducts real estate settlements through the firm’s subsidiary, Stress-Free Settlements. Mr. Gottlieb recently purchased his home and by using the Internet as a resource he was able to save a substantial amount of time and effort throughout the process. If you have any questions, please e-mail him at: gottlieb@internet-law-firm.com.
Copyright 2000 by Michael S. Gottlieb, Esq. of Jacobs & Associates, Attorneys at Law (www.internet-law-firm.com). Not intended as Legal Advice, which can only be provided upon retaining an Attorney. |
