What Is a REALTOR®?

Every state has its own laws governing real estate licensing; there is no national license. In Indiana, agents are required to successfully complete 54 hours of instruction at an accredited school and to pass a licensing exam. They must also complete 16 credits of continuing education every two years in order to maintain their licenses. In addition, any agent who identifies him- or herself as a REALTOR® has affiliated with the National Association of REALTORS® and has pledged to adhere to their code of ethics and professional standards. All sales associates with the F. C. Tucker Company are REALTORS®.

With two years of selling experience, agents may return to school, pass another class and exam, and become licensed as real estate brokers. At this point they can go into business for themselves if they choose.

Real estate agents must affiliate with a broker before they can conduct real estate transactions. They operate on behalf of the broker, and he/she is legally responsible for their professional conduct. Any listings an agent has legally belong to the broker.

Who Do REALTORS® Represent?

The answer to this question used to be somewhat complex, but in recent years, the laws have been simplified. Now, agents working with a buyer represent the interests of the buyer and those working with a seller represent the interests of the seller. In practical terms, this means that whether you are a buyer or seller, your agent is now required to:

• Exercise reasonable skill and care in performing their duties


• Deal with you as a client honestly and fairly


• Disclose all facts which are known to the agent (or may be reasonably discovered) that affect the value or desirability of any property you are considering.


• The only exception to this law is when a buyer wants to buy a home listed by his/her own agent-or by an agent affiliated with the same broker (since the listings legally belong to the broker). In this situation, the agent becomes a "limited agent," representing the interests of both parties. This limited agency must be disclosed, and both the buyer and the seller must give their consent in writing for the transaction to move forward.

Why Should You Work With a REALTOR® When You Buy?

There are many compelling reasons to use a real estate agent when you buy a home:

• They have access to the Broker's Listing Cooperating (BLC) which allows them to search for available homes that meet your criteria.


• They will handle the administrative details of scheduling showings for the homes you would like to see.


• They save you time by providing you with information about schools, neighborhoods, etc.
• When you find a home you think you might be interested in, they can use the BLC to find out the list prices of other homes for sale in the area as well as the sales prices of those that have recently sold. This can help you determine the fair market value of the home before you make an offer.


• They will guide you through the maze of offers and counteroffers, inspections and amendments-always looking out for your best interests. Their advice and insight in these areas can help you avoid potential pitfalls and may save you from costly errors. Your agent will know, for example, which items in the home need to be included in the purchase agreement; some items can be assumed to stay with the house while others must be specifically stipulated. If the inspection uncovers problems, your agent will help you negotiate changes with the seller. Most real estate agents will not tell you what to do, but their training, previous experiences, and professional contacts can help you make better, more informed decisions.


• They can help you find a reputable mortgage company.


• They will explain the closing process and all of the paperwork involved.

How Are REALTORS® Paid?

Real estate agents are paid on commission, generally a percentage of the selling price of the home. The commission for a particular transaction is established in the listing agreement between the seller and his/her agent. The commission is paid at closing. The selling agent's broker receives a portion of the commission, and the buying agent's broker receives the other part. Each agent's broker then pays him/her a portion of the commission.

Why Should You Work With F. C. Tucker Company & The Reel Team When You Buy?

The F. C. Tucker Company was founded by Fred C. Tucker, Sr., in 1918. His vision and values were passed to his son, Bud Tucker, and to his grandson, Fred C. Tucker, III, who leads the company today. The F. C. Tucker Company has been number one in Indianapolis for more than 25 years and enjoys a 35 percent market share. In such a competitive industry, that kind of success does not happen accidentally. The F. C. Tucker Company leadership has worked hard to listen to consumers, anticipate their needs and stay ahead of the trends. For this reason, you, as a consumer, really do Get More(TM) with Tucker.

• More knowledge - Tucker has its own full-time training department which provides pre-service and in-service training to our agents. We have a state-of-the-art computer lab where agents can stay on top of technological advances; instructors teach courses ranging from basic word processing to using email, Palm Pilots, and Top Producer (a program designed specifically for real estate agents).


• More professionalism - In addition to the superior training they receive, all F. C. Tucker agents devote themselves to real estate full time. Your agent won't be waiting tables when you want to see a home.


• More offices - We have 14 offices throughout the Indianapolis area, and unlike our "individually owned and operated" competitors, our offices all work together. Wherever you are in the city, you'll have convenient access to F. C. Tucker Company resources.


• More hours - Our offices are open seven days a week (except holidays) and into the evening on weekdays, making them more accessible when you need them.


• More support - We have more support staff which frees our agents to serve you more efficiently.


• More access to support businesses:
• Each F. C. Tucker office hosts a mortgage loan officer from Tucker Mortgage. While you are in no way obligated to use our mortgage company, the loan officers are easily accessible if you choose to finance your home through them.
• Our title company, Title Services, L.L.P., is headquartered in the same building as the mortgage company.
• We offer home warranties through HMS Warranties. These warranties cover problems not protected by your homeowner's insurance policy.
• Tucker's Home-Link will help you move into and maintain your new home: everything from changing utilities, enrolling your kids in school, finding a contractor, or purchasing a new refrigerator - all at no cost to you. Once you enroll in this program, you can use these services whenever you need them. No other company in the state offers such premier customer service.

How Do You Find a REALTOR®?

You'll want to keep several things in mind as you select a real estate agent. Remember that during your search you may spend a significant amount of time with this agent, so he/she should be someone you can enjoy. You will be seeking your agent's advice on one of the most important decisions you will make, so he/she should be someone you can respect. In the course of your search, you may need to share intimate details of your finances, so your agent should be someone you can trust. In addition, you'll want an agent who will know when to share his/her opinion straightforwardly and when to listen to your opinions.

A good candidate...

• Is familiar with the area of town you're interested in


• Is available at times that are convenient for you


• Can assess your personal compatibility


• Asks questions about what you want and need in a home


• Is a good listener


• Has respect for you and your preferences


• Follows up with answers to questions he/she did not initially know


• Returns calls promptly

You Choose … Half Empty or Half Full?

Phenomenal…
Opportunities Abound…
Amazing Values…
Greatest Midwest Location…

These are just some of the words and mantras that we, not just the Real Estate Industry, but homeowners, homebuyers and investors need to remember and repeat to ourselves everyday. We need to stop being discouraged and down-trodden by the media who sensationalize how bad the housing market is, to the point we don’t hear any other voices. Despite the hype several businesses are actually doing well… why? Because key leadership have told their employees to not watch the news and not be influenced by their one-sided reporting.

Therefore, our industry believes it is important to be heard over the constant drone of negativity. Our leadership needs to shout about the amazing opportunities that everyone has right now for home ownership!

Here are the facts - Positive and Phenomenal facts that rise us above the nay-sayers…

-You can borrow money! There is money available for homes, cars, student loans!
-Mortgage companies are thriving and surviving and have money to lend!
-Mortgage rates are the lowest since …. Since EVER! Can you even remember what distant President was in office when rates were this low???
-Property Taxes are very reasonable - some of the lowest in the country.
-Construction costs to build a new home are down.
-Our home values haven’t taken a major drop here in Indiana nor were hit by some huge housing bubble, like other markets in the US.
-And instead of seeing the increase in bank owned homes as a negative - let’s look at it as an awesome opportunity for first time homeownership and investor purchasing.
-First time homebuyers can actually purchase bank owned properties that may or may not be in need of repair with FHA loans!

Sure the days of getting something for nothing may be gone. So you have to have a little money down in order to obtain one of the biggest investment’s in your life, but isn’t that what made America great to begin with - hard work and saving in order to achieve the American Dream.

According to the Indianapolis Metropolitan Board of Realtor’s as of the end of October, 2008 already over 25,800 properties have SOLD so far this year! You can decide how to look at this information - half full or half empty. We choose to see the wonderful FULL value of home ownership… How it can build a family, a community, a thriving neighborhood business or affiliation. Indiana is still one of the most affordable and best places to live, work and raise a family. So next time the news or radio comes on with their gloom and doom perspective, do yourself a favor - Select the Off Button! Published in the southsidealliance.com - Indianapolis

Why now is the time to buy a home?

Many people have questions about today’s housing market - especially first-time homebuyers navigating their first purchase in the midst of conflicting news about market conditions.

Is it a good time to get in? How does the national housing market affect us locally? What does the current uncertainty about property taxes mean, now and down the road?

Consumers contemplating a new home purchase can look forward to 2008 with great hope: This is an excellent time to take advantage of market conditions that are ripe for buyers. Home inventories are up, giving buyers lots of options, and mortgage rates are low, with traditional money readily available for most consumers.

Worrying about how the national housing market affects the local market is a natural reaction for buyers trying to sort out the sometimes-gloomy national forecast. But as Lawrence Yun, chief economist for the National Association of REALTORS has often said, “A national picture of the real estate market is just about as valuable as giving a national high temperature for the day.”

While the overall picture is important, buyers and sellers in central Indiana are better positioned than many of their counterparts across the country. Central Indiana was spared the major price corrections and severe oversaturation of housing supply that plagued the rest of the nation in 2007. And while predicting the overall level of activity in 2008 is difficult, buyers - particularly those entering the housing market for the first time - can feel confident about a home purchase for several reasons.

Central Indiana’s status as an affordable market is a plus for any first-time buyer. The National Association of Home Builders/Wells Fargo Housing Opportunity Index named Indianapolis the most affordable major market for the ninth consecutive time. Some national media reports have touted the anticipated strength of central Indiana’s market in the coming years, and national market watchers also have their eyes on central Indiana.A Nov. 7 Fortune Magazine article listed Indianapolis as one of only seven cities expected to see home values increase in the next five years. The magazine studied the correlation between property values and rent rates, typically a reliable guide to the value of homes to determine whether an increase was likely. Indianapolis was one of more than 50 cities studied.

CNN Money.com noted that Indianapolis’ local economy is poised to grow faster than the national average over the next two years, with house prices projected to post a respectable gain. It pointed to Indianapolis’ low unemployment rate and stable employment sectors such as professional and business services, health care, education and government.

“Indianapolis is riding a few trend that are bringing about an early recovery in its real estate market,” it said.

Many factors - such as good schools, access to transportation, parks and recreation, and public safety - contribute to overall quality of life and, ultimately, the success of the housing market. But affordability is the cornerstone of central Indiana’s housing market - for 2008 and beyond.

Stocks jump following rebound in home sales

NEW YORK (AP) — Some heartening news on home sales and earnings Tuesday has let Wall Street set aside a little of its angst. Full Article 02/03/2009

• The National Association of Realtors said buyers stepped in to snap up properties at steep discounts in December, especially in the South and Midwest. Its seasonally adjusted index of pending sales for preowned homes rose 6.3 percent in the final month of the year from revised figures in November. Wall Street welcomed the news; investors are looking for any signs that the housing industry slide is slowing.
• “The market is encouraged by the more upbeat report on housing, albeit from a low level,” said Alan Gayle, senior investment strategist at RidgeWorth Investments. “A key element of the current malaise is housing and credit-related. And the report on home sales suggests that we are making progress on that front.”

13% Increase in Pending Home Sales

From the Associated Press in Washington comes news of a 13% increase in pending home sales in the South and Midwest.

Article Highlights:

• An index that tracks signed contracts to purchase existing homes rebounded in December, as buyers snapped up properties at deep discounts, especially in the South and Midwest.
• It was the second positive sign in the past two weeks for the troubled U.S. housing market, and may indicate that a bottom is forming — at least for home sales.
• The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for previously owned homes for December rose 6.3 percent to 87.7 from an upwardly revised November reading of 82.5 … The reading also was up 2.1 percent from December 2007 … January sales data, to be released later this month, may look good too.
• Pending home sales increased about 13 percent in the South and Midwest, but fell almost 4 percent in the West and about 2 percent in the Northeast.

Save On Your Next Home

Recommendations

The housing slump is hurting plenty of homeowners nationwide, but there's one group of people that's celebrating: prospective homebuyers.

As one member of our Foolish community discovered, buyers are in the driver's seat when it comes to real estate. Gone are the days when you had to make offers on houses the first morning they were listed. Sellers aren't seeing many bidding wars where they eventually get well above their list price. Instead, homes are remaining on the market month after month, and inventories continue to rise.

It's a game of chicken between buyers and sellers, and so far, sellers have played well. While overall sale prices are down, there hasn't been nearly the level of panic selling that makes those price tags really plummet. However, there are probably quite a few sellers whose patience is wearing very thin - if they blink first, then the price drops we've seen so far may look like just the tip of the iceberg.

Buyer, It's Your Market

So if you're in the market for a new home, time is on your side. Sure, you may end up missing the exact bottom of the real estate market. But with real estate out of favor in many parts of the country, there's no reason for you to feel rushed or pressured into acting quickly. Here are some tips for negotiating the best possible deal:

Take Your Time - Buying a house is always full of high-pressure situations. Nearly everyone involved in the transaction -- the sellers, real estate agents, and loan officers, just for starters -- is interested in one thing and one thing only: getting the deal done. But with conditions the way they are, you have all the leverage -- unless you give it up voluntarily. Don't do it.

Shop Around - Because time is on your side, you can get to really know an area before you buy. Rather than making a blind offer without being familiar with a particular neighborhood, you can compare your top prospects and do more in-depth research on the specific things that are most important to you. Whether it's finding a good school system or living in an area with promising long-term price appreciation potential, make the effort to find the place you really want.

Get Creative - Are you interested in buying, but don't have the best credit in the world? With the subprime woes spreading to larger firms like Bear Stearns (NYSE: BSC) and UBS (NYSE: UBS), you'll find that lending standards have tightened across the board.

As a result, you might have trouble getting financing as easily as you would have in the recent past. But don't despair: See if your seller would be interested in doing a private financing deal for part, or all, of the purchase price. Some sellers will do anything it takes to get their property off their hands, and you might be able to negotiate an interest rate that beats anything you could get in the subprime market.

Don't Jump The Gun - Unfortunately, many buyers are also in the position of being sellers at the same time. In the past, it was tempting to go ahead and buy your new house before you sold your original house, especially with easy bridge financing that made it possible. Now, however, you can't count on your old house selling in a timely fashion. If you just can't wait, make sure you put an express contingency into your offer to give you an out if your house doesn't sell.

Learn more

Buying a house is one of the most stressful experiences you'll ever go through. If there's a single piece of advice you need to remember, it's this: Don't panic. After going through all the stress of a home purchase, the end result is everything you hoped it would be.

What Impacts Your Credit Score?

Your monthly principal and interest charges are determined by the rate and the amount of the loan. And the rate and loan amount, in turn, are affected by several factors. The rate depends on your credit score, discount points you pay, and whether the down payment is less than 20 percent. The loan amount depends on the size of the down payment and the home's price.

There is also the matter of mortgage insurance, which is levied on borrowers who make a down payment of less than 20 percent.

What determines your mortgage payment?

Mortgage lenders closely scrutinize your financial history to determine whether to approve your loan application.

Of primary concern are:

• Your credit report, which details your payment history on all loans, bankruptcy filings and other financial information.


• Your credit score, which uses your credit report to arrive at a numerical representation of your overall creditworthiness.
  

Credit scores (sometimes called FICO scores after Fair Isaac Corp., the firm that created the most commonly used form) range from the 300s to about 900, with most home buyers falling in 600s and 700s.

Factors used to determine your credit score

Past delinquency: Those who have failed to make payments in the past tend to do so in the future. The more recent a delinquency, the more it counts against you; a 30-day delinquency within the past 12 months hinders your chances of getting favorable mortgage terms.

Length of credit: The longer you've had credit, the better.

Credit use: If you're maxed out or close to your credit limits, you're viewed as risky.

Mix of credit: Someone with a combination of revolving and installment debt is considered less risky than one with only a secured credit card.

The higher your credit score, the less risky you appear to a lender. A good credit score will help you qualify for a mortgage loan and obtain better terms.

Cleaning up your credit report

Why check your credit report before your lender does?

Because an estimated four out of five credit reports contain some kind of misinformation -- errors you'll want to clear up before approaching any lender.

Obtain copies of your credit report from all of the big three credit reporting agencies -- Equifax, Experian and TransUnion. Each probably will differ from the others in small ways.

Tips for cleaning up your credit report

• Look closely for any errors and correct them.


• Note late payments and credit balances; you may have to explain them to a lender.


• Compare account numbers to make sure they're yours.


• Pay all bills on time.


• Learn more about credit scores and how they're calculated.
  
  

How To Escape Foreclosure

Most people who sign a mortgage don't intend to walk away from it. Still, unforeseen circumstances -- huge medical bills, lost jobs, divorce or eroding property values -- can overwhelm even the best-intentioned borrower. A simple twist of fate can leave you facing a homeowner's worst nightmare: foreclosure.

Communicate With Your Lender

Rest assured, where foreclosure is concerned, you and your lender are on the same side. Lenders want your money and the interest that comes with it, not your house. If you seem to be a good risk, the lender will offer to help keep your mortgage afloat. But be forewarned: If you seem like a bad risk, the lender may cut its losses by taking steps to foreclose and evict you as quickly as possible.

The key is to contact the lender before your debt gets the better of you. The sooner your lender knows of your problem, the more help it can provide.

The Foreclosure Spiral

The foreclosure spiral begins when your loan payment becomes 16 days overdue. At that point, your mortgage company will try to contact you to work out a repayment schedule to bring your loan current.

If your first payment becomes 30 days delinquent and the next month's payment looks doubtful, collection attempts begin in earnest. If your payments fall 90 days behind, the company will likely refer your mortgage to an attorney or other entity that will initiate formal foreclosure proceedings.

Ways To Avoid Foreclosure

Here are some options your lender may offer you if you miss a payment and want to avoid foreclosure:

• Repayment Plan: If you suffer a short-term financial setback (expensive car repairs, a medical emergency), your lender may provide some breathing room by agreeing to let you pay off your missed payment in two installments over the next two months.
• Loan Modification: Mortgage company can adjust the terms of your loan -- most often by lengthening the amortization schedule, lowering the interest rate or rolling the delinquent amount into the loan and re-amortizing the new balance -- to help you bring the loan current.
• Short Sale: The lender allows you to sell the house for less than the outstanding loan amount, takes the proceeds and forgives any remaining debt.
• Short Refinance: The lender forgives some of your debt and refinances the rest into a new loan.
• Refinance With A "Hard Money" Loan: You won't like the high rates and fees of a hard money loan -- one from a private lender -- but it may buy you time to sell your home and avoid foreclosure.

Questions To Ask Your Mortgage Lender (Cont.)

Is there a prepayment penalty on this loan?

There may be a prepayment penalty on your loan. Some penalties are 1 percent of the loan amount, others are equal to six months' interest, some apply only when you refinance or reduce the principal balance by more than 20 percent, and some kick in if you sell your home. Find out the duration of any penalty period and how the penalty is calculated. Some lenders offer lower interest rates to buyers who accept prepayment penalties.

What is the minimum down payment required for this loan?

The rate and terms of your loan will be based on a down payment figure, typically 3 to 20 percent of the buy price. If you can put more money down, you may be able to lower your rate and improve your terms; if you come up short, you may be required to get mortgage insurance.

What are the qualifying guidelines for this loan?

These requirements relate to your income, employment, assets, liabilities and credit history. First-time home buyer programs, VA loans and other government-sponsored mortgage programs typically offer easier qualifying guidelines than conventional loans.

What documents will I have to provide?

Most lenders will require proof of income and assets before approving your loan, and may require other documents as well. Buyers with excellent credit may qualify for a no-documentation or "no-doc" loan, but they can expect to pay a hefty down payment and higher interest rate.

How long will it take to process my loan application?

The answer will depend on a number of variables. When the loan business is brisk, underwriters get backed up, verification takes longer, appraisals move slower and other bottlenecks develop along the loan pipeline. Lenders may say two weeks, but 45 to 60 days is probably more realistic in most cases. You'll need their best guess to determine how long to lock in your loan.

What might delay approval of my loan?

If you provide the lender with complete, accurate information, the loan process should run smoothly. If the underwriter discovers credit problems, however, there could be delays. Make sure you notify your lender if you change jobs, increase or decrease your salary, incur additional debt or change marital status between the time you submit an application and the time the loan is funded.

Questions To Ask Your Mortgage Lender

Once you've narrowed the lender field to a short list of finalists, it's time to compare their offers.

Here are the key questions to ask at application time to help you find the best overall mortgage loan. If you have already selected a lender and are ready to apply, make sure you have the answers to these questions first.

Once you've narrowed the lender field to a short list of finalists, it's time to compare their offers.

Here are the 10 key questions to ask at application time to help you find the best overall mortgage loan. If you have already selected a lender and are ready to apply, make sure you have the answers to these questions first.

What is the interest rate on this mortgage?

To determine exactly what you'll pay over the term of the loan, you need to know the rate. Rates change quickly, and if your credit is less than perfect, you may not be offered the lender's lowest figure.

To effectively compare different lenders' programs, ask for the annual percentage rate (APR) of the mortgage interest, which is generally higher than the initial quoted rate because it includes some fees. But beware: the APR found in advertisements can be misleading. Mortgage lenders don't always include all the fees they charge in the calculation that determines APR, so customers who use that figure to shop rather than an itemized breakdown of rates, points and fees may end up comparing apples to oranges.

How many discount and origination points will I pay?

Lenders may charge prepaid mortgage interest points to lower your interest rate or other points that have no benefit to you at all. Find out how many you'll be expected to pay and which kind of points they will be.

What are the closing costs?

Mortgages come with fees for various services provided by lenders and other parties involved in the transaction. You want to know what those fees will be as early as possible. Lenders are required to provide a written good faith estimate of closing costs within three days of receiving a loan application.

When can I lock the interest rate and what will it cost me to do so?

Your interest rate might fluctuate between the time you apply and closing. To prevent it from going up, you may want to lock the rate, and even points, for a specified period. Ask your lender if lock fees apply.

Now It's Time To Search For A Home!

Your first step here is to figure out what city or neighborhood you want to live in. (Remember the old saw about "location, location, location.")

For overall demographics and data on metropolitan areas, you can visit a city site like CNNMoney.com's annual Best Places to Live list. For more detailed neighborhood information, check out sites like Yahoo! Real Estate, Homepages.com or NeighborhoodScout for comprehensive school and demographic information on a number of communities. Look for signs of economic vitality: a mixture of young families and older couples, low unemployment and good incomes.

Pay special attention to districts with good schools (high teacher-student ratios and graduation rates are among the hallmarks), even if you don't have school-age children. When it comes time to sell, you'll find that a strong school system is a major advantage in helping your home retain or gain value.

Try also to get an idea about the real estate market in the area. For example, if homes are selling close to or even above the asking price, that shows the area is desirable. Try Homegain.com, which is free, or Dataquick.com, which is available only to paid subscribers, to check out recent home sales.

Your real estate agent may also be able to show you listings. Incidentally, if you have the flexibility, consider doing your house hunt in the off-season -- meaning, generally, the colder months of the year. You'll have less competition and sellers may be more willing to negotiate.
Next, take your search to real estate site like reelestate.com which let you search for property that fit your requirements.

Be wary of choosing search criteria that are too restrictive. For example, select a price range 10 percent above and 10 percent below your true range. Add a 10-mile cushion to the location you specify. If you see a house you are interested in, save it, print it, add it to your bookmark or favorites list, and take note of the MLS code; your agent will want that code to arrange to show you the home in person.

In a condo, each owner has absolute ownership of his own unit, which may be an apartment or townhouse. Owners pay a monthly fee to maintain shared areas like the lobby, the pool, or the laundry room. The chief financial risk to a condo owner is that the common charges can rise, or, in the event of a major problem such as a roof repair or boiler replacement, the condo board can assess fees to cover expensive repairs.

It's a good idea, when considering a condo, to find out how much the common charge has changed over the last five years, and whether there have been major assessments during that time. Also ask what percentage of the residents actually own their units as opposed to just renting them (many condos include both). A complex with lots of renters has fewer owners who care about the upkeep, and it may be harder to get a loan on such a property.

When you actually start touring homes, bring a notebook and a digital camera to help you remember details. Your real estate agent should supply you with a description of each house and the lot it sits on, the property tax assessment, the asking price, and sometimes a diagram of the rooms. Your camera and notebook are there to record other details, ranging from the cost of heating to the view out the rear window.

One note: Don't automatically reject a house just because it doesn't measure up to your desires, either in features or price. You can always add a deck, for instance, or update a kitchen. Since the asking price is just a starting point for negotiation, you will be making offers and counteroffers as both parties seek an acceptable price.

Don't Buy A Home Without Professional Help.

With all the tools and advice available today ranging from books and magazines to online advice like this lesson - it would be possible for you to buy your home almost completely without the aid of real estate professionals.

That's not necessarily recommended. The housing market, like politics, is basically local, and each state, city, and even neighborhood has a thicket of local laws or customs that you need to understand. For that, it helps to have a team of professionals to guide you.

You might want to start by finding an agent who can represent your interests in the search. This is not as simple as it sounds. Sure, 85 percent of sellers list their homes through an agent - but those agents are working for the seller, not you. They're paid based on a percentage, usually 5 to 7 percent of the purchase price, so their interest will be in getting you to pay more.

What you need is what's known as an "exclusive buyer agent." Sometimes buyer agents are paid directly by you, on an hourly or contracted fee. Other times they split the commission that the seller's agent gets upon sale. A buyer's representative has the same access to homes for sale that a seller's agent does, but his or her allegiance is supposed to be only to you.

To complicate matters, there are hybrid agencies called either single-agency or dual-agency brokers. In both cases, an individual agent in the firm may represent either sellers or buyers, sometimes both, in the same transaction. Potential conflicts of interest abound in this situation, so if you are seeking a buyer agent but no exclusive buyer agent is available, make sure to ask the agent about conflicts of interest.

There are now about a dozen Web sites that help connect buyers with buyers agents, among them reelestate.com.

Next start looking for a mortgage lender. Take your time, since you could be paying this loan for 30, even 40, years. Start on the Internet at places like LendingTree.com and E-loan.com. You may also want to check out the rates at CNNMoney.com, Bankrate, or HSH Associates. These sites carry nationwide listings of mortgage interest rates and other related information.
Don't limit your search to the Web, though. Once you have an idea of the best rates from national lenders, get on the phone to your community banks and any other institutions with which you may have a relationship. Ask if they can beat the national rates. Often, the local lender can offer a better deal simply because he or she knows the local market and wants to keep your business.

You might also consider using a mortgage broker, a middleman who keeps tabs on rates from a multitude of lenders. The mortgage broker isn't paid directly by you but gets paid by the bank. However, the fee - usually 1.5 to 3 percent of the loan amount - may get transferred to you in the closing costs. Most search engines have extensive listings of mortgage brokers. There's also a trade group, the National Association of Mortgage Brokers, which can put you in touch with a broker in your area.

Getting the money right

For most people, buying a house involves a double financial whammy.

First you have to assemble a pile of cash for the down payment and closing costs. Then you must convince a bank to lend you an even more staggering sum - generally 80 percent or more of the purchase price.

So your first step, even before you start the actual hunt for a property, should be to get your financial house in order.

Start with your credit

Credit reports are kept by the three major credit agencies,
Experian, Equifax, and TransUnion. Among other things, they show whether you are habitually late with payments and whether you have run into serious credit problems in the past.

A credit score is a number calculated by Fair Isaac based on the information in your credit report. You have three different credit scores, one for each of your credit reports.

A low credit score may hurt your chances for getting the best interest rate, or getting financing at all. So get a copy of your reports and know your credit scores. Try Fair Isaac's MyFICO.com, which charges upwards of $50 for all three reports and scores.

Errors are not uncommon. If you find any, you must contact the agencies directly to correct them, which can take two or three months to resolve. If the report is accurate but shows past problems, be prepared to explain them to a loan officer.

Know what you can afford

Next, you need to determine how much house you can afford. You can start with one of the Web's many calculators. For a more accurate figure, ask to be pre-approved by a lender, who will look at your income, debt and credit to determine the kind of loan that's in your league.
The rule of thumb here is to aim for a home that costs about two-and-a-half times your gross annual salary. If you have significant credit card debt or other financial obligations like alimony or even an expensive hobby, then you may need to set your sights lower.

Another rule of thumb: All your monthly home payments should not exceed 36 percent of your gross monthly income.

The size of your down payment will also determine how much you can afford.

Line up cash

If you haven't already, you'll need to come up with cash for your down payment and closing costs. Lenders like to see 20 percent of the home's price as a down payment. If you can put down more than that, the lender may be willing to approve a larger loan. If you have less, you'll need to find loans that can accommodate you.

Various private and public agencies - including Fannie Mae, Freddie Mac, the Federal Housing Administration, and the Department of Veterans Affairs - provide low down payment mortgages through banks and mortgage companies. If you qualify, it's possible to pay as little as 3 percent up front. For more, check out their Web sites at Fanniemae.com or Freddiemac.com.

A warning: With a down payment under 20 percent, you will probably wind up having to pay for private mortgage insurance, a safety net protecting the bank in case you fail to make payments. PMI adds about 0.5 percent of the total loan amount to your mortgage payments for the year.

So if you finance $200,000, your PMI will cost $1,000 annually.

Increasingly, though, lenders are giving qualified buyers the option of using "piggyback loans" to cover a portion of a home's down payment and avoid paying PMI. These second loans are usually in the form of a home equity loan or line of credit for 10 percent to 15 percent of the home's purchase price.

Once you've considered the down payment, make sure you've got enough to cover fees and closing costs. These may include the appraisal fee, loan fees, attorney's fees, inspection fees, and the cost of a title search. They can easily add up to more than $10,000 - and often run to 5 percent of the mortgage amount.

If your available cash doesn't cover your needs, you have several options. First-time homebuyers can withdraw up to $10,000 without penalty from an Individual Retirement Account, if you have one, though you must pay taxes on the amount. You can also receive a cash gift of up to $12,000 a year (the limit for 2006) from each of your parents without triggering a gift tax.

Gift taxes are paid by the donor, not the recipient. (In fact, if your and your spouse's parents are both well-heeled, they can give you a total of $96,000 in one year - $12,000 from each of the four parents to each of you.)

Check on whether your employer can help; some big companies will chip in on the down payment or help you get a low-interest loan from selected lenders. You can also tap a 401(k) or similar retirement plan for a loan from yourself.

Top Things To Know About Buying A Home (Cont.)

6. Get professional help.
Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.

7. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points -- a portion of the interest that you pay at closing -- in exchange for a lower interest rate. If you stay in the house for a long time -- say five to seven years or more -- it's usually a better deal to take the points. The lower interest rate will save you more in the long run.

8. Before house hunting, get pre-approved.
Getting pre-approved will you save yourself the grief of looking at houses you can't afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.

9. Do your homework before bidding.
Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that's about eight to 10 percent lower than what the seller is asking.

10. Hire a home inspector.
Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.

Top Things To Know About Buying A Home

1. Don't buy if you can't stay put.
If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner.

2. Start by shoring up your credit.
Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.

3. Aim for a home you can really afford.
The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.

4. Don't worry if you can't put down the usual 20 percent.
There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price.

5. Buy in a district with good schools.
In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.

Ways to Lower Your Homeowners Insurance Costs (Cont.)

7. Seek out other discounts

Companies offer several types of discounts, but they don't all offer the same discount or the same amount of discount in all states. For example, since retired people stay at home more than working people they are less likely to be burglarized and may spot fires sooner, too. Retired people also have more time for maintaining their homes. If you're at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies. Some employers and professional associations administer group insurance programs that may offer a better deal than you can get elsewhere.

8. Maintain a good credit record

Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowners insurance policies. In most states, your insurer must advise you of any adverse action, such as a higher rate, at which time you should verify the accuracy of the information on which the insurer relied. To protect your credit standing, pay your bills on time, don't obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.

9. Stay with the same insurer

If you've kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurers will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more. But make certain to periodically compare this price with that of other policies.

10. Review the limits in your policy and the value of your possessions at least once a year

You want your policy to cover any major purchases or additions to your home. But you don't want to spend money for coverage you don't need. If your five-year-old fur coat is no longer worth the $5,000 you paid for it, you'll want to reduce or cancel your floater (extra insurance for items whose full value is not covered by standard homeowners policies such as expensive jewelry, high-end computers and valuable art work) and pocket the difference.

11. Look for private insurance if you are in a government plan

If you live in a high-risk area -- say, one that is especially vulnerable to coastal storms, fires, or crime -- and have been buying your homeowners insurance through a government plan, you should check with an insurance agent or company representative or contact your state department of insurance for the names of companies that might be interested in your business. You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.

12. When you’re buying a home, consider the cost of homeowners insurance

You may pay less for insurance if you buy a house close to a fire hydrant or in a community that has a professional rather than a volunteer fire department. It may also be cheaper if your home’s electrical, heating and plumbing systems are less than 10 years old. If you live in the East, consider a brick home because it's more wind resistant.

Remember that flood insurance and earthquake damage are not covered by a standard homeowners policy. If you buy a house in a flood-prone area, you'll have to pay for a flood insurance policy that costs an average of $400 a year. The Federal Emergency Management Agency provides useful information on flood insurance on its Web site at FloodSmart.gov. A separate earthquake policy is available from most insurance companies. The cost of the coverage will depend on the likelihood of earthquakes in your area.

If you have questions about insurance for any of your possessions, be sure to ask your agent or company representative when you're shopping around for a policy. For example, if you run a business out of your home, be sure to discuss coverage for that business. Most homeowners policies cover business equipment in the home, but only up to $2,500 and they offer no business liability insurance. Although you want to lower your homeowners insurance cost, you also want to make certain you have all the coverage you need.

Ways to Lower Your Homeowners Insurance Costs

1. Shop Around

It'll take some time, but could save you a good sum of money. Ask your friends, check the Yellow Pages or contact your state insurance department. National Association of Insurance Commissioners has information to help you choose an insurer in your state, including complaints. States often make information available on typical rates charged by major insurers and many states provide the frequency of consumer complaints by company.

Also check consumer guides, insurance agents, companies and online insurance quote services. This will give you an idea of price ranges and tell you which companies have the lowest prices. But don't consider price alone. The insurer you select should offer a fair price and deliver the quality service you would expect if you needed assistance in filing a claim. So in assessing service quality, use the complaint information cited above and talk to a number of insurers to get a feeling for the type of service they give. Ask them what they would do to lower your costs.
Check the financial stability of the companies you are considering with rating companies such as A.M. Best and Standard & Poor’s and consult consumer magazines. When you've narrowed the field to three insurers, get price quotes.

2. Raise Your Deductible

Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25 percent. Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage. If you live near the coast in the East, you may have a separate windstorm deductible; if you live in a state vulnerable to hail storms, you may have a separate deductible for hail; and if you live in an earthquake-prone area, your earthquake policy has a deductible.

3. Don’t confuse what you paid for your house with rebuilding costs

The land under your house isn't at risk from theft, windstorm, fire and the other perils covered in your homeowners policy. So don't include its value in deciding how much homeowners insurance to buy. If you do, you will pay a higher premium than you should.

4. Buy your home and auto policies from the same insurer

Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them. But make certain this combined price is lower than buying the different coverages from different companies.

5. Make your home more disaster resistant

Find out from your insurance agent or company representative what steps you can take to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.

6. Improve your home security

You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems aren't cheap and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you'd save on premiums.