Tips for Finding the Perfect Neighborhood

The neighborhood you chose can have a big impact on your lifestyle—safety, available amenities, and convenience all play their part.

Make a list of the activities—movies, health club, church—you engage in regularly and stores you visit frequently. See how far you would have to travel from each neighborhood you're considering to engage in your most common activities.

Check out the school district. The County or City Department of Education can provide information on test scores, class size, percentage of students who attend college, and special enrichment programs. If you have school-age children, also considering paying a visit to schools in the neighborhoods you're considering. Even if you don't have children, a house in a good school district will be easier to sell in the future.

Find out if the neighborhood is safe. Ask the police department for neighborhood crime statistics. Consider not only the number of crimes but also the type—burglaries, armed robberies—and the trend of increasing or decreasing crime. Also, is crime centered in only one part of the neighborhood, such as near a retail area?

Determine if the neighborhood is economically stable. Check with your local city economic development office to see if income and property values in the neighborhood are stable or rising. What is the percentage of homes to apartments? Apartments don't necessarily diminish value, but do mean a more transient population. Do you see vacant businesses or homes that have been for sale for months?

See if you'll make money. Ask your REALTOR^® for information about price appreciation trends in the neighborhood. Although past performance is no guarantee of future results, this information may give you a sense of how good an investment your home will be. Your REALTOR^® or the government planning agency may also be able to tell you about planned developments or other changes in the neighborhood—like a new school or highway—that might affect value.

See for yourself. Once you've narrowed your focus to two or three neighborhoods, go there and walk around. Are homes tidy and well maintained? Are streets quiet? Pick a warm day if you can and chat with people working or playing outside.

10 Tips for First-Time Homebuyers

1. Be picky, but don't be unrealistic. There is no perfect home.

2. Do your homework before you start looking. Decide specifically what features you want in a home and which are most important to you.

3. Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs.

4. Don't wait to get a loan. Talk to a lender and get prequalified for a mortgage before you start looking.

5. Don't ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion.

6. Decide when you could move. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area?

7. Think long-term. Are you looking for a starter house with the idea of moving up in a few years or do you hope to stay in this home longer? This decision may dictate what type of home you'll buy as well as type of mortgage terms that suit you best.

8. Don't let yourself be house poor. If you max yourself out to buy the biggest home you can afford, you'll have no money left for maintenance or decoration or to save money for other financial goals.

9. Don't be naïve. Insist on a home inspection and if possible get a warranty from the seller to cover defects within one year.

10. Get help. Consider working with a REALTOR^® as your buyer's representative. Unlike a listing agent, whose first duty is to the seller, a buyer's representative is working only for you. And often, buyer's reps are paid out of the seller's commission payment.
    

     

Good Reasons to Own Your Own Home

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, property taxes you pay, as well as some of the costs involved in buying your home.

2. Gains. Over last five years (1998-2002) national home prices have increased at an average of 5.4 percent annually. And while there's no guarantee of appreciation, a 2001 study by the National Association of REALTORS^® found that the typical homeowner has approximately $50,000 of unrealized gain in a home.

3. Equity. Money paid for rent is money that you'll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your mortgage payments don't go up over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will rise.

6. Freedom. The home is yours. You can decorate any way you want and be able to benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.