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There are a few things to consider, including cost, individual needs, and what will add value down the road. Other points to consider would be:

1. Can you finance the home improvement with your own cash or will you need a loan?
2. How much equity is in the property?
3. Is it possible to develop the current space for an addition?
4. What is permissible under local zoning and building laws in your town or city?
5. Are there affordable properties for sale that would satisfy your changing housing needs?

Make sure you are ready both financially and emotionally. A house needs constant upkeep. Address the following questions:

1. Is my debt lower than my total income?
2. Do I have steady income?
3. Do I have enough money to pay for the down payment and closing costs?

The general rule of thumb is that you can buy a home that costs about two-and-one-half times your annual salary. Your mortgage broker or lender will determine how much you can afford and estimate the maximum monthly payment based on the loan amount, taxes, insurance and other expenses. To find out now how your income, debts, and expenses can affect what you can afford, click here to figure out how much you may be able to borrow to purchase a home.

Bottom line - You own it! The other perks arise from potential tax savings and the build up of equity as your property likely appreciates in price over time. Also, the mortgage interest paid on a home loan is tax deductible, as is the local property tax. If you get a fixed-rate home mortgage loan, you also can invest more wisely knowing your monthly mortgage payment, unlike rent, will not change substantially.

The marketing has been inundated with great low mortgage rates which ultimately make the home buying affordable. If you purchase a starter home today, you might start to build value that can lead to the purchase of a larger, dream home in the future.

Good agents also adhere to a strict code of ethics - avoid high-pressure sales tactics, refrain from showing you properties that do not fit your needs or goals, and alert you to problems about the condition of the property.

They have good knowledge of financing options, are up to date on the latest housing trends and share with prospective buyers data on the local housing market and home sales. They pre-inspected most properties, take the time to qualify buyers and show properties in their price range and plan showing routes.

Never disclose the maximum amount that you are willing to pay for a home. Maybe an agent could spend a lot of time showing you homes and sharing information, the truth of the matter is that she/he works for the seller, who ultimately pays each and every agent involved in helping to complete the home sale. The seller pays the agents in the form of a commission, a percentage of the proceeds from the home sale.

Your best alternative is for you to hire your own real estate professional by signing an employment contract commonly known as a buyer’s agent or a buyer’s broker agreement.

By signing an Exclusive Buyer Agent Agreement – your agent will negotiate the best price and terms and protect your interests in the real estate transaction.

The agent will analyze data, handle all the paperwork that is involved in the real estate transaction. Further, he/she will answer questions, and share their professional expertise.

By law, real estate agents may not discriminate on the basis of race, color, religion, sex, disability, familial status, or national origin. Further a real estate agent can not follow spoken or implied directives from the home seller to discriminate. If you suspect you have been discriminated against, a complaint may be filed with the local Department of Housing and Urban Development (HUD). Toll-free number is 1-800-669-9777, or visit its web site at www.hud.gov/complaints/housediscrim.cfm.

The asking or the listing price that the seller would like to receive for the purchase of the home does not necessary means that is the price that the seller will settle. It is good rule of thumb to check recent sales and the current listing prices of the neighborhood homes and compare them the seller’s asking price.

Also, knowing the seller’s motivation to sell will enhance your negotiation position. Sometimes seller have to move quick do to various reason (contract on another home, divorce, job transfer etc) and might be willing to accept a lower price to speed up the process.

Very important tips during any real estate transactions are to NOT allow emotions such as ego, anger, fear, love get in the way of negotiation. And, be flexible – never say this is the final. That will only leave you in a dead lock.

Most offers include two typical contingencies: an inspection contingency which gives you the rights to have accredited home inspector inspect the property and an appraisal/financial contingency which makes the sale dependent to receive a loan from a lender.

Without contingencies, a buyer could forfeit his or her deposit if he or she backs out of the purchase contract.

The purchase contract should also include the seller’s responsibilities – making any agreed repairs, maintaining the property in its present condition, passing clear title etc.

All depended on your state where your property is located. For instance California does not require an attorney but Virginia does.

Close attention should be placed to any contingencies, clauses and other special considerations that will allow the seller or the buyer to back out of the contract.

If you ever question the transaction, consult an attorney.

Not really – unless the home has been overpriced, expect to have your low offer to be rejected. In a way when turning low-ball offer you have dampened the prospective sale and have prevent the seller from negotiating at all with you. Be careful, the low offer might not work in a normal market conditions, however in buyer’s market if might motivate the seller to give you a counter-offer or even accept it. So, it is all relative to the market you are in when buying property.

Home inspector inspects your future property and run reports to make sure that it is safe by searching for defects or other problems that could lead to potential and costly issues by focusing on home’s construction, structure and other systems.

After signing the purchase contract, typically the home inspection takes place.

As you hire the home inspector to examine the structure of the property, you also have the rights and should consider hiring other experts to inspect your future home – radon gas, asbestos, water disposal system etc.

Purchasing home without home inspection is not a very wise decision, since the home inspector might discover problems in the plumbing or electrical that will cost you!

It is a good idea to include an inspection clause in your written purchase agreement – the clause will give you the opportunity to negotiate the agreement if repairs are needed. The clause could specify that any or all problems that have been uncovered must be repaired before the settlement.

The American Society of Home Inspectors (ASHI) http://www.ashi.org – this organization has code of ethics and standards set for its members who must be qualified and experienced and have demonstrated field experience and knowledge about structures and their various systems.

It is a good idea since following the inspection the home inspector will go over the findings and discuss the problem areas with you.

The market value is established when the buyer and seller meet and discussed the purchase of the home. Bottom line, the home’s value is what someone is wiling to pay – and everything else is an estimate of value.

There are two reliable ways to determine the home’s value – (1) An appraisal which is conducted by certified appraiser and (2) the comparative market analysis which is compiled by your real estate agent.

The appraiser inspects and verifies that size and square footage, improvements, number of rooms, construction qualify of the property, the neighborhood condition and the comparable sales in the neighborhood – thus determining the estimated value of the home. Typically, the lender does require the appraisal since the report ensures and protects the lender regarding the home value. The appraisal fee is paid by the buyer and usually runs between $350.00 to $450.00

The comparative market analysis is an informal market estimate of value based on the recent selling prices of similar neighborhood properties that have been sold within the last 6 to 12 months. In additional to the recent sold homes, your realtor will run reports of the properties that are in the neighborhood currently on the market.

The list price is the approximate price that the seller would like to sell the property. And, when the home sells that price becomes known as the final actual sales price of the property.

Closing costs are the ADDITIONAL cost above the price of the property. They are fairly costly and average between 2 to 3 percent of the total home purchase price. They include: title insurance, escrow fees, notary charges, property taxes, document process fees, loan points and lender fees.

Parties, the buyer and the seller, absorb some of these costs upon transferring the ownership of the property. But, who pays what, all depends on buyer and seller negotiation and what is a the typical in your part of the market.

It is an agreement between a renter and a landlord in which the renter signs a lease with an option to purchase the property. The option only binds the seller; the tenant has a choice to make a purchase or not. Lease options are common among buyers who would like to own a home but do not have enough money for the down payment and closing costs. A lease option may also be attractive to tenants who are working to improve bad credit before approaching a lender for a home loan.

A standard policy is the typical policy that most home owners get. The policy does coverage for several natural disasters and catastrophic events. However, it does not guard against earthquakes, floods, war, and nuclear accidents. Please note that your lender might request from you to purchase flood or earthquake insurance if the house is in a flood zone or a region susceptible to earthquakes.

While you are not required by law to have home owner’s insurance, mortgage lenders stipulate that you do. It protects their investment in the home in case of a natural disaster or catastrophic event.

When you have conventional loan with less than 20 percent down payment your lender will require you to have private mortgage insurance. Please note that this insurance is no longer necessary after enough equity has been built up in the property.

PMI guarantees the lender will not lose money if you default on the loan.

The title insurance is almost always a requirement when closing escrow. The insurance protects the lender against unclean title to the property. The price of the title insurance is a set value per thousand of dollars of the total loan amount.

The property taxes are given by the city and the county and it is taxes solely based on how much the property you own is worth. The real property tax is an ad valorem tax, or a tax based on the value of property.

The property taxes in general help pay for public services such as police and fire protection, libraries, schools roads etc.

Yes. You may deduct them every year on your primary residence, second home and other investment properties. Very similar to the mortgage interest paid on a home loan, property taxes are fully deductible from your income

Yes. You are allowed to appeal the property taxes at the Assessor’s Office for a particular period of time before a deadline when they are made public.

When you protest/appeal your property taxes, you will have to provide a proof of why do you think your property is worth less in value. One way to do this is to get an appraisal and ask your Realtor of perform comparative market analysis.

Contact your local tax assessor's office for procedures on appealing your property tax assessment.

An impound account which is set up and held by your lender and is an account that collects monthly payments from the you (the borrower) for the payments of: property taxes, hazard insurance and mortgage insurance.

The impound account is lender’s safety net to make sure that you (the borrower) will pay the property taxes and insurance on time. Typically at closing the lender does collect 2-3 months cushion for the taxes and insurance.

If you have a conventional loan and if the loan amount if 80 percent of less of the purchase price you might expect to have the impound account waived. However, you might be charged an additional ¼ point for this option by your lender.

Yes. Many city and county governments offer Mortgage Credit Certificate (MCC) programs, which allow first-time homebuyers to take advantage of a special federal income tax write-off

Program requirements for MCCs vary, although most go by the following guidelines:

• The buyer must live in the home being purchased with an MCC-assisted mortgage.
• Total household income cannot exceed certain limits.
• The buyer cannot have owned a principal residence within the past three years. This restriction may be waived if a property is purchased within a certain targeted area.
• The purchase price must fall within an established limit.

For more detailed information your local housing or redevelopment agency

The points that you pay to purchase your home loan are deductible for that year when you purchase the home. However, the other costs paid at closing are not immediately deductible. The appraisal, document, recording and loan application fees that are given when purchasing the home can be recouped by adding them to the adjusted cost basis, the starting point for figuring a gain or less when selling the home. Significant home improvements also can be calculated into your cost basis.

There are plethora of benefits from the time you buy to the time you sell. The mortgage interest is tax deductible for the primary residence (up to a home loan of $1,000,000.00) or second home. And if you use a potion of your home for business purposes, you can depreciate deduction as well.

Please contact your local tax agency for more information. Many federal tax benefits are also available from local and state tax agencies.

Lease option is an agreement between the landlord and the renter in which the renter signs a lease with an option to purchase the property. The option is only binds the seller, and the renter has the choice to opt out.

The landlord agrees to give the tenant an exclusive option to purchase the property. A portion of the rent/lease goes towards future down payments. The option price is usually determined at the beginning of the agreement and the agreement states when the purchase should take place.

Lease option is very attractive to tenants that would like to own a home but do not have enough financial capital for closing costs and down payment. Some even have bad credit but are working on improving their FICO scores before applying with a lender for a home loan.

Please consult attorney before you decide to do a lease option.