FAQ: Real Estate | Real Estate Agent | Fixed Rate Mortgage | Home equity loans | Bad Credit Loans | Equity Refinancing

Welcome to the Hughes & Hughes Financial Services Real Estate Frequently Asked Questions Area!

While this list is by no means comprehensive, it is intended to provide our clients with a bit of clarity on the basic question surrounding Real Estate, enabling them to make better, more profitable decisions.

Steps to owning your own home

Make your home wish list.
Consult with a Real Estate Agent regarding neighborhoods, homes and financing options.
Search for your new home.
Make an offer on the home you choose.
Earnest money deposit (subject to home inspection, financing etc.)
Acceptance of contract
Apply for a mortgage - WITH HUGHES & HUGHES FINANCIAL SERVICES! :-)
Have an appraisal done
Mortgage is approved.
Have inspections for hazards and termites done.
Contact the utility companies.
Pre-settlement inspection.
Settlement
Moving Day!

Common Pitfalls of Purchasing
Whether you are purchasing for the first time, wish to upgrade your current residence, or are relocating to a new area, many questions arise, as do emotions. Everyday purchasers make life-altering decisions with less than 20 minutes of dedicated viewing and investigation. Any errors that occur as a result of a lack of planning can seriously hamper your financial standing, and even unduly affect the long-term happiness of your family.

To outmaneuver and avoid grave errors, take into account the following common pitfalls when purchasing:

1) Paying too much
Without the aid and assistance of a professional Real Estate Agent, purchasers often pay far more than fair market value. It is not uncommon to hear horror stories where thousands of dollars were wasted because the market was unknown. Market areas differ - what you sold your last home for does not necessarily equate to equal pricing structures in your new neighborhood. Your Real Estate Agent will know what is locally considered good value for investment dollar. If you are relocating to a new city, engage the services of a local Real Estate Agent who intimately understands the fluctuating market trends and will provide a comparative market analysis on the home you wish to purchase.

2) Too much of a fixer-upper
You've heard the stories or maybe even made the comments yourself, "It's only superficial, and It won't take too much money to fix that, we can renovate on the weekends, or I didn't realize it would consist of hiring a structural repair artist."
Nightmares happen when you take on more than you can handle. Purchasing a fixer-upper can equate to replacing everything and still ending up with a very expensive brand new old car!

3) Wrong type of neighborhood
Once you locate a home that appears to fit everyone's needs, take a second look! If you originally viewed the property on a weekend, drive by during weekday rush hour. Check with the local municipal authorities to see if a major highway plan is in the works - one that will produce a backyard oasis of incessant noise. Investigate airport extensions and shopping center improvements. Heavy traffic blaring into your quiet serenity can destroy your solitude.

Consider your outdoor lifestyle. Do you hold family barbecues, enjoy sitting outside, or invite family and friends to vacation with their recreational vehicles in your backyard? In many cases, excessive traffic noise can hamper a quiet conversation by the creek. You many also find out for the first time just how lightly you sleep. There are also the potential toxic fumes leaking from vehicle exhaust. Do you want your children and yourselves breathing this in? It may take only a month or two to realize the grave mistakes you've made.

4) Buying outside of your Budget
We are all familiar with more funds going out than what is coming in. Kids these days always want the best regardless of whether they can really afford it or not. It is easy for a Real Estate Agent to nod their head and make the quick commission, fully realizing that one-year later when the marriage is on the rocks that they will be earning another commission as the property is on the market again.

Careful budgeting is the order of the day! First time purchasers be warned that it is very easy to buy beyond your means, as you count on dual incomes until the new baby arrives. It is better to buy the home you need and con comfortably afford than experience being forced to sell and buy down. House rich and cash poor is not the way to experience life!

On the opposite end of the scale is purchasing a home that offers less function and feature than what you really need. Inevitably, you will end up purchasing the right home and have to bear the cost of reselling and moving again.

5) Over or Underestimating Your Housing Needs
A $10,000+ mistake can occur when you purchase with only the immediate timeframe in mind. You opted for no family room, and three months later are delighted to learn your first child is on its way. Or your children all leave home in the same year and now you find yourself rambling around in empty rooms! On the other hand, when parents downsize too early, they find their adult children have rebounded with a few extra additions! Consider all your options carefully. Saving your hard earned money is a definite plan!

6) Retirement & Condo/Apartment Living
If you are now retired from the workplace and are beginning to contemplate that a smaller residence is just what the doctor ordered. No more high maintenance yard work, shoveling snow or too many rooms to clean. A year after moving to what was once just the right size for the two of you, you find yourself missing those workshop projects that the family loves to receive, or tending the garden you spent years creating. Perhaps you are now facing widowhood and the condo walls speak too many memories. Purchasing a condo or apartment too early for your lifestyle is a grave error that can be avoided.

Determine your needs realistically:

Are the retirement activities in line with your lifestyle?
Are the local amenities close by?
Is the strata council open to family members, especially children, vacationing?
Do you prefer a 55 and older building?
Do the strata rules forbid small pets?
Are you in the same age bracket as the current residents?
Is it a couple oriented building, or singles only?
What are the noise restrictions?
Can hanging baskets and lawn chairs decorate your balcony?
How many parking stalls per unit?
Can you perform minor car repairs?
Is the personal and building security systems to your liking?

These are just a few of the questions that require answers before you enter into a binding contract. Discuss these questions with your Real Estate Agent, allowing their expertise to guide you to just the right home - one that meets all your personal needs, and one that also fulfills your dreams.

7) Overlooking Schools and Children
Is your new home close enough for the children to walk to their new school, is there bus service just down the street, does the school offer academics suitable to your children's needs, or is it right next door and you've reached a point in your life where you would prefer quiet solitude?

Caught up in the passion of your new home, it is easy to overlook and undermine these questions. After six months of taxiing your children to and from school, you may find yourself experiencing the need for more freedom. By graduation, your children may find that had they attended another secondary school, the university prerequisites would have been fulfilled. You may thoroughly enjoy sitting alone in your private backyard only to find recess noise and the school's outdoor gym activities hamper your need for solitude. Determine the answers with your Real Estate Agent before signing on the dotted line!

8) Yard Maintenance
The thought of your own swimming pool, the manicured lawns, or the beautiful English garden in full bloom. It's lovely to look at, but do you want to spend the time required to keep everything in top working order? Do you have the funds required to hire a full-time landscape architect? In some cases, you may be better suited for townhouse living where yard maintenance is part of the contract, and the local recreation center offers swimming and exercise programs tailored to your lifestyle needs.

9) Title Searches
Encumbrances, right of ways, easements, tax liens, builder's liens, leases, an undisclosed co-owner....

Avoid all potential difficulties by having a title search performed as early as possible. Protect your investment by purchasing Owner's Title Insurance.

10) Property Surveys
Review the original property survey:

Is the neighbor's fence where is should be?
Is the home too close to the property line?
Is there room for the addition you are planning?
Are zoning regulations violated?

Discuss these details with your Real Estate Agent. Have visible survey posts inserted into the ground so you can see if there is room for that new workshop or pool.

11) Municipal By-Law Restrictions
Educate yourself! Consult with your Real Estate Agent and local municipal authorities to learn of any abnormalities and restrictions that apply to the property. Do you intend on converting the basement into an in-law suite? Can you run your commercial business from home? Is there a senior's residence next door that prohibits noise after 9:00 p.m.? Can you park your recreational vehicle in that three-car driveway?

12) Structural Defects
Consider an independent home inspection. Careful examination by a professional will remove all doubt! Is that tiny crack in the foundation a repair nightmare or merely settlement? Are the walls infested with termites? Does your budget have room for thousands of dollars in reconstruction costs?

For a few hundred dollars you can obtain an extensive inspection report that will point you to any structural defects in the building. Ascertain the cost of repairs prior to entering into a binding contract. Write your purchase contract subject to a satisfactory home inspection so you can renegotiate if the repairs are beyond your current budget. Or opt for another home more suitable to your needs.

13) Unexpected Costs
It is not unusual to reach settlement stage only to find that hidden expenses have occurred. Such items as real estate taxes and homeowner association dues may be pro-rated, while hazard insurance and taxes must be paid in advance. Avoid stressful discoveries by asking for these figures in advance. NOTE: Should your settlement date alter, so do some of the pre-paid expenses.

14) Hidden Lender Costs
Avoid hidden and questionable costs at application time - tax service fees, courier fees, underwriting fees, loan disbursement charges, or mark-up on court documentation fees - by asking your lender to list exactly what fees are included on the federal settlement forms and what additional fees may be charged at closing. (NOTE: Some fee can be negotiated down or waived if you question them.)

15) Vendor Errors
It is not uncommon to find that repairs have not been made, or other contractual obligations may delay settlement. Plan a walk-through of the property, contract in hand, and check off each item. It is advisable to arrange an escrow fund and set a dollar amount for items that the vendor defaults on.

16) Closing Your Transaction
Occasionally the closing date will be jeopardized just days prior to settlement. Arrange a 60-day locked-in interest rate at application time.

Homeownership is the largest single investment you will most likely make during your life. It's in your best interest to be educated. Pay close attention to every detail and you will win at the real estate game. Your Real Estate Agent's responsibility is to make sure you succeed by avoiding the top sixteen errors purchasers most commonly fall prey to. After all, your Real Estate Agent's and Loan Officer's reputation depends on referrals generated from 100% client satisfaction!

Call Hughes and Hughes Financial Services now and get started today!