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10 Tips for Consumers

1. Buyers - your recipe for success = PASTA.
   This recipe works just like any other recipe...follow the steps in order but feel free to improvise to suite your preferences!

   Pre-Qualify - to become a strong, credible buyer with a competitive edge. This step alone could save you thousands of dollars because a seller, even in a seller's market, is almost always willing to actively negotiate with a qualified buyer. Getting Pre-approved is even more desirable, especially if you're expecting to settle within 1-3 months. I call this step your "shopping-spree" feeling.

   Action Plan - Assess your wants and needs and set criteria for meeting these expectations. Remember to also consider potential equity and resale value as part of your plan. Buying right is what enables you to realize profits when you sell. Think...what is it that's drawing me to this property and does it align with what I've determined to be most important for me/us.

   Sales Agents - it is both prudent and worthwhile to learn about your choices in agency, what a REALTOR® is, and what expertise and advantages a particular "agent" will offer you BEFORE entering into ANY type of contract. In Pennsylvania, consumers can choose to be represented by an agent (eg. a particular broker: ABC Properties, or XYZ Real Estate) or remain on their own. When selecting an agent, the salesperson works as a subagent to you (i.e. your agency relationship is with the broker...the salesperson simply a vehicle through which the real estate services are delivered to you. That's why it's very important to feel comfortable with the salesperson (aka sales associate) because even though they are licensed, some associates are REALTORS ® (that is they've committed to work according to a code of ethics) and others are simply licensees (haven't officially committed to the code of ethics and the REALTOR ® Associations). My experience has been that working with professionals whose expertise and personal style compliment your standards should prove rewarding.

   Title Search and Insurance - your assurrance of freedom from someone's past debt and obligations. It also provides useful insight into your ownership rights and use based on information in the public records. The policy has an exceptions page...read it, question it, and make sure it is explained to your satisfaction.

   Agreement of Sale - is a potential contract between you, the sellers, and any other parties referenced in the document. It states your offer and the conditions upon which you agree to purchase the property. Make sure it's worded to both meet your expectations and protect your interests via appropriate addendums and contingency clauses.

2. Give yourself a raise! Increase W4 allowances in preparation for home ownership. Tip: this works especially well if you've received a tax refund in preceeding years & if you buy your home early in the year to allow for accumulation of almost an entire year's mortgage interest payments. Please consult your tax advisor for more info.

3. Make extra principal payments during the early years of a loan. You could substantailly reduce the amount of time you'd be paying the loan, saving you thousands of dollars in interest. Insure that your lender does not impose what is called a pre-payment penalty (i.e. money that they'd charge you because you paid your loan off early) so embrace a great opportunity!

4. Maximize leverage - investigate different financing programs and get pre-approved for the largest mortgage amount possible within the program and terms most comfortable to you. This enables your dollar to buy more house.

5. Remember that the deed is the main dish in real estate; the real property, surroundings, and terms of the sale flavor the sauce. If the main dish is burned, no matter what sauce you try to put on it doesn't change the fact that the main dish is burned. What you decide to do from there is up to you.

6. Surround yourself with a successful team.

7. Be SMART - do your research, protect your interests, and be in the driver's seat to a successful real estate transaction using the Satisfaction-Motivated-Approach-to the -Real Estate-Transaction. This technique is essential for recognizing a good opportunity and acting on it.

8. Remember the 3 S's for a SMART buy and incorporate these aspects into your Action Plan: Saleability, Surrounding, and Satisfaction.

9. Prepare your home for sale by allowing the buyer's to "mentally move-in". Pack up your things...you're going to be moving anyway. Do repairs and improvements in a way that is necessary and appeals to a buyer's eye...essentially buyers want inviting, neat, tasteful, and clean. For example, if you have an older home, tighten the stair railings. You'd be amazed at how slanted floors, often common in very old homes, will suddenly take on a whole new life when a buyer is set off balance by a shaky stair railing. All of a sudden, the house is falling apart right before their eyes! Keep decorating schemes simple and use fresh flowers and plants to make a room or entrance inviting. Put on the lights...think of your home as a stage and make it the best it can be for a showing. Ask your local brokers for tips on preparing your home for sale. One rule of thumb...the less of your sentimental "things" all around, the better. Keep one or 2 nice pieces displayed and pack up the rest. Some simple tasteful decorating assists buyer's in "mentally moving in". And one last tip from the past: "A place for everything and everything in it's place" goes a long way in preparing your home for showings. Good luck!

10. Be prepared for PMI...if you put less than 20% down, you will more than likely pay PMI (private mortgage insurance which basically insures the lender for the 20% equity stake in the event you default and the lender needs to recover that portion). Ask potential lenders a) what their policy is for having PMI removed and b) what the monthly PMI payment will be based on their premiums and your loan terms. Some want to see a 12 month good payment history, a new appraisal by certain approved appraisers, or maybe even nothing at all. Nevertheless, once your equity in the property reaches 20%, apply to your lender to have this expensive insurance removed from your loan.

Disclosure: REALTOR is a registered trademark of the National Association of REALTORS. The president of Investor Solutions, Inc. is a REALTOR® licensed in the state of Pennsylvania through Prudential Preferred Properties.

It is unlawful in the state of Pennsylvania for a person to bring buyers and sellers together in a real estate transaction for a fee or other valuable consideration without holding a current Pennsylvania Real Estate Salesperson or Broker License. There are certain exceptions (eg. an owner offering his own property for sale without the aid of a REALTOR) and users of this service are encouraged to check with their state's Real Estate Commission to insure their actions are in compliance with all applicable laws.

Users of this service should investigate US Federal Fair Housing and other legislation to insure they do not discriminate when offering real estate for sale or lease based on race,color,religion,sex,handicap,familial status, or national origin. Additional laws prohibit discrimination, preference, or limitation in the offering of real estate based on age, sexual orientation, and perhaps other basis. Investor Solutions, Inc., it's officers and subsidiaries encourage users of this service to check with local government agencies for more information or to work with real estate professionals of their choice for insuring compliance with all federal, state, and local laws pertaining to real estate transactions.

Investor Solutions, Inc, its officers and/or affiliates will not be held liable for errors, ommisions or losses, incidental or otherwise, arising from use of this site.