You finally did it! You found a great home in what seems like a nice neighborhood at, as far as you know, a reasonable price. Your offer beat out the competition, and now you’re under contract!

With the wheels in motion, you’re set to close on your new home purchase in just a few weeks. A lot will happen between now and then—some good, some not so good. The not-so-good can range from normal bumps in the road to homeownership while others are deal-breakers you can’t and shouldn’t ignore.

Here are four of the potential problems you could encounter—as well as your options if they crop up—plus some tips on how to avoid them.

Your Lender Has to Get “Creative” With Your Loan

If you made your offer on your new home before you were pre-approved for a mortgage, your bank will now begin digging into your finances to determine how much they’re willing to lend you. This could go really well, or it could go terribly wrong.

If you made your offer on an affordable home with a down payment of 10% or more, you’re probably in good shape to get approved for a 15-year, fixed-rate mortgage with a payment of no more than 25% of your take-home pay. Any other loan option is a no-go.

Too many buyers fall in love with homes they can’t afford. And lenders will do their best to “make your homeownership dreams come true” with rotten financing options like adjustable-rate mortgages or piggyback loans. Even a simple 30-year, fixed-rate mortgage is a rip-off that will cost you tens of thousands more in interest and keep you in debt for decades!

Ideally, you need to be pre-approved for a mortgage (not just prequalified) before you begin shopping for homes. That way you know your exact price range, and you won’t make offers on homes you can’t afford.

Your Home Inspection Reveals Extensive (and Expensive) Problems

Even if you’re already approved for a loan, the bank now has to be sure the home is a sound investment as well. That means a thorough home inspection by a licensed professional. Nearly every home inspection—even those on new homes—will turn up some issues. Most are minor and can either be ignored or resolved by further negotiating the terms of the purchase contract.

However, some issues like insect infestations or water damage are warning signs you can’t ignore. According to PestWorld.org, termites , for example, cause more than $5 billion in property damage each year, and the cost to repair that damage is not usually covered by homeowners insurance. In addition to any repair expenses, you’ll also need to pay an exterminator to eliminate the infestation. Chemical extermination can cost up to $3,000 for a 2,500-square-foot home on a slab foundation plus an ongoing $200 a year for annual maintenance services.

Costs to repair water damage can range from $100 to patch a small roof leak up to $70,000 for a burst water pipe, according to data from CostHelper.com. If the leak has been around long enough, you may have a mold problem on your hands too. Additionally, CostHelper.com reports the cost for a typical mold remediation project can cost between $2,000 and $6,000. For widespread damage, you could be looking at $30,000 or more.

Foundation problems and major electrical or plumbing problems are also expensive to repair and indicate the potential for ongoing problems with the home. As much as you love the home or the location, it’s usually better to walk away than to walk into a home with costly complications.

Your New Neighborhood Is Past Its Prime

Sometimes the first time you saw your home was also the first time you ever visited that neighborhood. Maybe you’re moving from out of town and you don’t know which areas are up-and-coming and which are on the decline.

Whatever the case may be, take steps between now and closing to make sure you’re buying a home in a quality neighborhood. Drive through on different days and at various times of day. Do people seem comfortable visiting together outside their homes? Are there kids running around? Is there construction going on nearby?

New shopping areas and expanding neighborhoods are signs of a healthy community. Go online and research the nearby schools and make sure this is a place you’ll want to stay long term. A great deal on a home isn’t worth it if the neighborhood’s in decline. But before you back out of the purchase, consult your real estate agent for their insight.

Your Appraisal Shows the Home Isn’t Worth the Price

There are many reasons why an appraisal might be low. In some areas, home prices are rising fast—so fast that the comparable home sales appraisers use to calculate a home’s value haven’t caught up. You may also end up with a low appraisal if the home you’re buying has features that aren’t typical for the neighborhood, like a basement or view.

But more often than not, a low appraisal is a warning sign you may be paying more than the home is worth. As a buyer, your lender cannot approve a loan amount for more than the appraised value of your home. If you do end up with a low appraisal, you have a few options:

• The seller can lower their asking price (hint: this is the least likely to work).
• You can challenge the appraisal or request a new one if it contains incorrect information.
• You can cancel the contract.
• You and the seller can meet in the middle with cash out-of-pocket.

If you decide on the last option, proceed with caution. You’re already making a down payment of at least 10% of the home’s price. Adding cash to make up for a low appraisal increases your risk since you’ll have to stay in the home longer for its value to recover. If you can’t negotiate a better deal with the seller, your best bet may be to let the home go.

Whenever problems like these come up, it’s best to have an experienced real estate professional on your side. Working with a real estate agent won’t guarantee a problem-free home purchase, but it will keep you from having to navigate those rough waters on your own.

Source: DaveRamsay.com

While most home buyers spend their time at an open house passively observing the layout of the rooms and the name brands on the kitchen appliances, smart buyers know the things that are really important to look for when buying a home.

In competitive markets, you'll often walk into an open house that has been deep cleaned, upgraded, and staged with stylish furniture, so you shouldn't be overly impressed by a house that looks and smells nice. (You can, however, be rightly appalled by a home that looks and smells atrocious.)

Think of the open house as a first date: It’s an opportunity to look beyond the pictures you saw online and figure out if the property is worth seeing again—or if you should move on and never look back.

Don’t let those freshly baked cookies or potpourri simmering on the stove fool you. The more aggressive the scent, the greater the likelihood the seller is taking precautions to mask a more offensive odor, says Denise Supplee, a real estate agent with Long and Foster Real Estate in Doylestown, PA.

"When there’s too much going on in the scent department—plug-ins, wax warmers, and candles, for example—I wonder what that overkill is hiding."

Take a deep whiff in every room you enter, and look closely at walls, ceilings, and flooring for signs of pet accidents, mildew, or smoke.

Red flag No. 2: Poor tiling

Inspect the tile in kitchens and bathrooms, suggests Eugene Gamble, a real estate investor and owner of WeFundYourFlips in Tampa, FL.

"If the gaps or tiles are slightly uneven, it may indicate a DIY job, which will make me think twice, especially if I know this house was flipped," he says. Lazy tiling could indicate that multiple fixes might have been done on the fly, which can add up to big bucks in potential repair costs.

Red flag No. 3: Foundation issues

Most houses have hairline cracks, which just indicate the house is settling into its position, but large gaps signal a bigger issue with the foundation, says Gamble. Other tipoffs: sticking doors or windows, visible cracks above window frames, and uneven floors. How do you know if the floors are uneven? Roll a marble from one side to the other. (This might be more subtle if you have kids with you.)

Red flag No. 4: Signs of deferred maintenance

"When I walk through a home, I look for signs that the owner might have neglected routine home maintenance,” says real estate agent Malcolm Lawson, with Keller Williams Select Realtors in Annapolis, MD. He cites issues such as burned-out lightbulbs, long grass, leaky faucets, or faded paint. “These signs indicate the seller may have ignored other ongoing home maintenance tasks that can cause real problems down the road.”

An attentive homeowner is going to flush the water heater annually, change air filters monthly, clean the chimney, inspect the roof for leaks, and regularly recaulk around windows and doors, for example, which will keep all those systems in good working order.

Red flag No. 5: Nearby water

That creek might look picturesque now, but it won’t when it comes cascading through your back door.

“The increasing unpredictability of weather means that it’s vital to consider the possibility of flooding,” Gamble notes. He’s seen people unable to insure their house against flood risk, which can create giant damage bills on a regular basis.

Red flag No. 6: Wonky windows

Take a second to pull back the curtains to check for lopsided frames, and then give the windows a tug to make sure they slide easily. If they stick, it could be a sign of foundation issues, as noted above, or just poor installation.

The only fix for that—and it’s an expensive one—is new windows, says Supplee, who knows from personal experience: “A home I purchased boasted ‘new windows,’ and it was only after living in the home for several months that I realized many had been installed wrong, and I had to replace them."

Red flag No. 7: Mold

To detect possible signs of mold while wandering through an open house, discreetly open bathroom and sink cabinets to take a look around water pipes or drains, suggests Frank Kirschner, a real estate broker in Fort Lauderdale, FL. Even small black or gray spots indicate that more serious issues may be lurking. You can also check the caulking around faucets and tubs for black spots, and look for patches on the ceiling.

Red flag No. 8: Water damage

A musty odor can indicate water damage, even if you don’t see standing water, says Supplee. Check walls and ceilings for water lines; they likely indicate flooding from a leak or a burst pipe that may have caused internal damage. Also, take a peek at exposed piping in basements or laundry rooms, and check for rust, water stains, or leaking, she suggests.

Red flag No. 9: Cosmetic enhancements

That one freshly painted wall could be an accent wall, or it could be hiding something like a patch of mold, Gamble cautions.

Supplee lifts up area rugs to check hardwood flooring, making sure they’re not stained or damaged by pets.

Red flag No. 10: Improper ventilation

Without adequate interior ventilation, moisture sticks around, which can create mold and increase allergies. The tipoff: Look for condensation on windows or slightly bubbled or peeling paint around windows, doors, or vents, says Kirschner. This can indicate moisture in the walls and ceiling drywall.

The bottom line: Don’t walk through an open house the way you walk through a museum, says Gamble. Even though your home inspectoris likely to detect many of these problems down the line, being attentive to these red flags in an open house ensures that you’re not wasting your time on a home that isn’t the one for you.

Source: Realator.com

Are you dreaming of improving your home, but you don’t have the budget to do major remodeling? If so, there’s still plenty you can do to scratch the home-improvement itch — and make your home look great.

Here are some cheap ways to spruce up your home for $50 or less.

1. Paint the front door

Painting your whole house? That’s an expensive project that takes time. On the other hand, painting the front door gives the front of your house a fresh, new look in one afternoon. Choose a fun, contrasting color, and don’t agonize too much over it. If you decide you don’t like the new color, paint the door again next summer, or next month.

If you want to try out a few colors before committing, Home Depot offers you can get free delivery of paint samples from The Home Depot.

In total, the project — including painter’s tape, a good paint brush, a quart of primer and a quart of exterior paint in your favorite color — should run you less than $50.

2. Add a bird feeder 

Add a bird feeder for your feathered friends to visit near a kitchen or living room window. You will find a range of options and price points. The one in the picture above by Perky-Pet promises anti-squirrel features — and that is key. After all, if left to their own devices, squirrels will consume all your bird feed.

3. Add path lighting

Add a little romance to your sidewalk or garden path with some solar-powered lights. The lights pictured here by Enchanted Spaces get high marks.

4. Replace the porch light

Has your affection dimmed for the porch light that came with the house? Or maybe it’s time to install an additional exterior light out by the back door or garage? The light pictured above is a shabby-chic barn style sconce.

5. Build raised garden beds 

Raised garden beds look tidier and create tiers for gardening on a slope. They also hold the good soil and retain more moisture. They are easy to tailor to the space you have and simple to build for the cost of a couple of boards, fence posts and some chicken wire. But you can also buy them assembled or ready-to-assemble in a variety of shapes and sizes like these at The Home Depot.

6. Insulate water pipes 

Admittedly, this upgrade is boring. But it’s easy, and it will save you money.

Insulate pipes that carry hot water through a cold basement or crawl space with pre-slit, hollow-core, flexible “sleeves” made of polyethylene or neoprene foam. Before shopping, make sure you know the diameter of the pipes you are insulating.

7. Dress up an old sofa

Give the couch new life by pulling a slipcover over its tired old self.

Wayfair.com has dozens of slipcovers in different shapes, sizes and patterns. If you can’t find a fitted slipcover that works on your sofa, don’t worry. Done well, a loose fit is timeless. Check Overstock and elsewhere for machine-washable cotton duck covers in many colors.

With any remaining cash, jazz up your new couch by making or buying some fun accent pillows.

8. Update cabinet hardware

If your kitchen and bathroom look dated but you can’t replace the cabinets, replacing the cabinet hardware gives rooms a new look.

Here are shopping tips:

• Remove one handle or drawer pull to see how many screws each uses and how far apart they should be. Your new hardware will need to have this same configuration.
• Before shopping, take stock of your room’s style. To avoid being overwhelmed by all the options, first browse home decorating magazines to identify the look of the hardware you want. For example, do you want pulls or handles? Sleek and modern? Old world? Recycled and eclectic?

There is a huge selection of pulls on Amazon (including the ceramic pulls featured above) and on Houzz. If you are looking for a vintage look or trying to match the hardware on an older house, check out building salvage stores in your area.

9. Add dramatic lighting

For a fun project that delivers instant drama at a low price, install flexible LED ribbon lighting under cabinets or shelves. For less than $50, you can get an 8-foot length of Armacost RibbonFlex Pro RGB LED tape light.

10. Make a Mason jar lamp

Mason jar lamps are trendy. A YouTube video by TheSorryGirls takes you step by step through the process of making one. Krylon, the maker of aerosol spray paint, provides instructions for painting Mason jars for use as light fixtures.

If a single-jar lamp isn’t enough of a challenge, and you have plenty of Mason canning jars, look for instructions online for making a Mason jar chandelier. Stick to using found materials to keep your costs down.

11. Install a front door kick plate

A kick plate is a broad strip of polished metal used horizontally along the bottom edge of a front door to protect it from scratches, kicks and dog paws. Kick plates are decorative as well as functional. Brass is traditionally used, but popular finishes now include antique brass, pewter, antique bronze and black.

Change your old kick plate for a new one, or install a kick plate if you haven’t used one before. After choosing a metal finish you like, use the same finish on all of your exterior hardware.

12. Paint exterior shutters and trim

A fresh coat of paint (or two) on shutters and trim provides a quick, easy shot in the arm for your home’s exterior. Paint all the trim or just the window trim. And if you are short on time or materials, repaint only the front-facing trim. It’s safest to use a color that’s already part of your home’s exterior color scheme.

13. Install new door handles

Put attractive new knobs or handles on interior doors and closets. For family members who are aging, arthritic or disabled, make life easier by replacing knobs with easier-to-grasp door levers like these from The Home Depot.

14. Make a new headboard

Craft a new headboard for your bed or refurbish your old one. If you scrounge for free and cheap materials, you can do it for less than $50. DIY Network has 15 ideas and photos for upgrading headboards.

15. Rearrange bookshelves

“Style” your bookshelves with artistic flare. Better Homes & Gardens has inspiration and tips. This is a fun, creative project, so spend some time and enjoy it. Among BHG’s tips:

• Treat each shelf as a display, and then stand back and make sure all shelves work well together.
• Position some items off-center on a shelf.
• Place some books in horizontal stacks and use the stacks as bookends for books shelved vertically.
• For a designer look, cover the inside of a bookcase with fabric or wallpaper.
• Don’t pack treasures and collections on every shelf.
• Pieces of pottery make nice, solid bookends.
• Stack a pyramid of books and put one of your favorite objects atop the stack.
• Use bookshelves as a gallery for framed photos or art.

16. Rearrange furniture

Ask someone whose home styling skills you admire to help you see your home and possessions in a new light. Stay open to change and new ideas.

17. Add container plants

New plants dress up your home’s porch and garden and create great curb appeal. You can start plants from seeds in the spring.

In autumn, dig a few of the more vigorous and prolific perennials from your garden and install them in pots. Ivy, a pest in gardens, looks terrific trailing down sides of planters, for example. Your local garden store or nursery may have a half-price area from which it sells cast-offs. Often, watering and care is all they need.

18. Install kitchen utility hooks

For a quick kitchen upgrade that you’ll enjoy daily, install a wall-mounted hanger. Use it for everything from dish towels and pot holders to utensils and measuring cups. You might even slip a recipe you’re using into a plastic ring-binder sleeve, add a ring clip and hang it for ready access.

19. Install new house numbers

Change your old house numbers. Find some new ones with an online search or at hardware stores. Or, shop for handmade numbers at Etsy.

20. Give light switches new life

Here’s how to give grimy old light switches new life: Toss the old covers out and treat yourself to new ones. For a fun project, cover some of them with decoupage.

21. Give your home a deep cleaning

If you’re stuck in a rut, try using Oprah.com’s checklist, timeline and instructions for deeply, thoroughly cleaning your home in eight hours. Oprah.com calls it “spring cleaning,” but don’t let that stop you from doing it now.

The psychological benefits of a clean home are immense, and you’ll feel wonderfully virtuous for doing it

Source:MoneyTalksNews

STEP 1 – Build a Budget

An effective budget will map out your plan to set aside money for your down payment and additional costs. It will also help determine the price of home you can afford.

STEP 2 – Investigate Mortgage Options

There are many different types of mortgages. If you don’t have the 20% down payment for a conventional mortgage, you can get a high ratio mortgage, combined with mortgage default insurance, that allows for a smaller down payment. You should be pre-approved for a mortgage before you start house hunting.

STEP 3 – Choose a Realtor

Your realtor will play a vital role in your homebuying experience. The best realtor will be a combination of a personal advisor, consultant and negotiator. He/she will show you homes that match your criteria, guide you through the homebuying process, negotiate the best possible price for your home and deliver your closing documentation.

STEP 4 – Get a Lawyer

It’s important to hire a lawyer who specializes in real estate. You could find yourself in a bidding war for the home you want, and it doesn’t hurt to have a lawyer look over any offer to purchase before you submit it. A real estate lawyer will also conduct a title search and check for outstanding taxes and liens on the property.

STEP 5 – House Hunting

• Create a wish list
  House hunting can be a lengthy process. To save yourself time, know exactly what you want in a home beforehand. Think about your immediate needs, future plans and lifestyle. When you look at homes, you may be tempted to concentrate on the home, but don’t forget to look at the whole property: the lot, the neighbourhood, the surroundings. How close is the home to facilities and services important to you?
• Bring your checksheet
  When you’re ready to begin shopping for a home – often called “house hunting”. You may end up seeing multiple homes in one day. This checksheet will help you compare and keep track of the homes you visit. And help you remember the features you did or didn’t like.

STEP 6 – Make the Offer

Your agent presents the offer to the seller. This document includes the price, conditions, deposit and closing date. The seller either accepts, rejects or counters the offer (also called “signing back” the offer).

STEP 7 – Home Inspection or New Home Warranty

Hiring an inspector is voluntary, but it’s a smart idea for resale homes. You can choose to make your offer to purchase the home conditional on the outcome of your inspection. If your inspection reveals major problems, you can negotiate those repairs with the seller before your deal closes, or legally withdraw your offer.

What is a New Home Warranty?

New Home Warranties are typically used when you buy a brand new home. The builder provides a New Home Warranty to cover things like deposits and completion dates, along with labour and materials for at least one year after the home was built. It also protects you against structural problems for a minimum of five years.

STEP 8 – Finalizing The Deal

Finalizing the deal will include the final approval of your mortgage, a meeting with your lawyer to finalize details like insurance and conditions, and the results of a title search.

STEP 9 – Moving Preparations

There’s a lot to do before you move. Line up utilities and other services like phone, cable and internet. If you rent, you must give your landlord notice. Also, forward your mail to your new address and hire a moving company. Preparing these things well in advance will help you make a smooth transition to your new home.

STEP 10 – Closing Day

This is the day you legally get possession of the house. Your lawyer completes the paperwork (so the home is in your name), payments are finalized and you receive the deed and the keys. Congratulations on your new home!