One of the more common incentives in new-home purchases is the "decorating allowance." This is an offer to upgrade some aspect of the home before closing, such as carpeting, flooring, or appliances. Since builders are buying such things "at scale" for multiple homes, the perceived value of the incentive may be higher than their actual cost. If you are considering a decorating allowance, ask these questions about the allowance offer: Is the allowance credited at closing, and can it be applied to your closing costs? What purchase terms must your accepted offer meet to qualify for the allowance? Check with the lender you have selected to make sure the terms the buyer is offering are allowed in your loan arrangement. At closing, make sure the allowance addendum is included on loan disclosures. And make the allowance/upgrade is valuable enough to you to tip the balance in such an important decision.

New-home builders frequently offer additional terms to help close sales quickly; these are usually called "incentives." Incentives are frequently used at critical times, like the end of a financial period, or for particular models or lots. Here are some of the most common: Cost-reduction incentives reduct short-term or up-front costs. For example, a builder might use a cash contribution to closing, or waiver of premiums on the lot, as cost-reduction incentives. Value-add incentives provide upgrades to the home being purchased. A decorating allowance to upgrade appliances, floors or fixtures is a common value-add. Value-to-buyer incentives are not necessarily connected to the house, but they are of value to the buyer. A trip to Hawaii, a car lease, or a big-screen television are all examples of this. Time-to-close incentives speed up the process. For example, if the builder has arrangements with a lender, with details of their project and models already in place, the buying process could be accelerated. While incentives can be emotionally tempting, try to evaluate them neutrally. Would you BUY the item or addition? What will it actually cost over time as part of the mortgage? Is the price fair or inflated? With lender arrangements, ensure that the terms are still fair compared to market terms. As a final check, get advice from your real estate agent or certified new-home cobroker.

The final walk-through is usually the last chance to see the house that you are intending to purchase in an open and empty state. This is an excellent opportunity to look over the property without obstructions. Use it to focus on potential problems and costs. Its a particularly good chance to assess the state of floors, walls, windows and ceilings without distraction. Examine them thoroughly for any indications of structural defects or painted-over problems. If any problems that were already flagged have not yet been addressed, this should be raised prior to closing. It is generally the sellers responsibility to fix them. Remember, once the deal has closed, you own the home and its problems.

Youre ready to buy a house; how do you "Make an offer"? There is a formal process, and the real estate agent(s) will assist you. The offer will involve: Price: how much are you offering? Under what conditions? Time: when do you want to close? Move in? Financial Terms: How much are you offering in down payment? What financing details might affect the offer? Contingencies. Does the offer depend on any other events, such as the sale of your existing home? Earnest Money: what amount are you committing to show that you are in earnest about the purchase? Deadlines: how long is the offer valid? An offer will include the complete legal description of the property, and a few other formal details. Keep in mind, it is "an offer, not a deal." Buyers will frequently provide a counter-offer that changes some of the terms to meet their desired outcome.

The initial offer price and terms on a home purchase have a big effect on the final deal. Keep a few things in mind in calculating your offer: If a buyers agent is involved, working for you (the buyer), they should take the lead on this job. Remind them to keep information and decisions confidential. If a buyers agent is NOT involved, remember that the selling agent works for the seller, not you! Calculating the actual offer should factor in: The price and terms for homes in the area The price and terms for recent, similar and especially nearby sales ("comps" -- comparable homes.) The condition of the home The listing history - how long has it been on the market? Has the listing price changed over time? Your financing terms, and general financing conditions such as interest rates. The sellers situation Know what the home is worth, and what you can afford. Negotiation is common; expect the buyer to make a counter-offer and anticipate more than one back-and-forth to reach agreement on the final price and terms. If you have a buyers agent, consider their advice, but follow your own reason and goals.

Make sure to check a few practical risks in the decision process for a new home, including: Natural disaster risks Is it in an earthquake-prone area? Is earthquake insurance available, and how much does it cost? Likewise, are hurricanes a risk? Tornadoes? How high does the property sit, and is there a risk of flood? (Watch the video on floods here on Video-Genius.) Are there hazardous materials in the area? Building Code compliance; the house should meet local codes. Local zoning and (if applicable) homeowner association rules can also play a big role in future changes. If you envision remodeling, making an addition, or other substantial changes, be sure you understand the regulations and permits that will be involved.

Whether its a real walk-through or a virtual walk-through, theres no substitute for seeing a prospective home. Keep your own list of requirements in mind, but also size up and record these things about each: Do the numbers of bedrooms, offices and bathrooms meet or exceed your requirements? Do the other rooms and features provide the space you need now and later? Will your furniture fit, and fit well? Does the structure look solid? Are appliances, heat/AC and other systems in good working order? Are there obvious outstanding repairs? These might be negotiated in the purchase process. How do yards, decks and garage spaces stack up against your needs? You may save time by measuring and recording the results, especially for key rooms or those that are questionable fits. It can be especially helpful to envision the place in very different seasons. What will this be like in snow? Rain? Heat? Save yourself time by "keeping score", with consistent notes and measurements for each place that youre really going to consider.

Buying a home is so complex that getting started may be intimidating. Ask yourself some basic questions before getting deeply involved. Are you prepared financially and emotionally to make the long-term investment and commitments involved? Are you clear on your budget, both up-front costs and monthly costs? Have you discussed the things youre looking for in the house — space, rooms, features and the rest — in advance? Have you narrowed down the places that you think will fit your life? You will find it easier to get started after being clear on these key factors; writing them down may even help you stay objective through the many decisions to come.

Cash To Close — the final money required in-hand at loan consummation. Borrower-to-Seller comparison, line-by-line (if there is a seller in this transaction.) If there is no Seller, a Payoffs and Payments table may be provided instead. This comparison, and the notes, should assist in understanding how the final transaction compares to the original Loan Estimate.

The Loan Disclosure details the final costs and terms of the loan arrangement. The form and details are set by regulation; heres what you can expect on Page 1. Loan Amount. The total sum you are borrowing. Interest Rate. The % paid to borrow, not including fees. Terms of balloon payment (if there is one). Terms of pre-payment penalties, if applicable. Projected Payments over the life of the loan, including: Principal & Interets Mortgage Insurance Estimates of Escrow Payments, which usually do change over time. Closing Costs – details of expenses required to close the loan. Cash To Close This form must be provided at least 3 business days before loan consummation.