Taking Stock: First-time homebuyers

Dear Mr. Berko: We are a young family of four and would like to become first-time homeowners. We found and drove by a house we like, and it is in our price range. Do you think this is the time to buy? What would you advise us?

L.M., Syracuse, N.Y.

Dear L.M.: The housing market is still gloomy, prices are still soft, foreclosures are still at record numbers, the overhang is daunting, it's still a buyer's market and prices are still falling. But there is a pinprick of light at the end of the tunnel through that tunnel is still darn long. So, yes, it's looking like a fine time to buy a home.

However, unlike a decade ago, when you could overpay and a few months later the home would be worth more than you paid -- those times are gone. Because a home isn't the nest egg it used to be, a buyer must be as diligent in the purchase of a home as he is in the purchase of a used car.

I think it's a good time to buy a home; though prices may still fade, there are some excellent bargains out there. But be mindful that while a neighborhood may define the range in ''values'' of various homes (you are unlikely to find a $140,000 home in a neighborhood of $300,000 homes), it's usually the neighbors that define the ''selling price'' of a home.

Of course, the home size, its age, physical plant including the roof, the heating and cooling systems, the interior condition, lot size, type of construction, etc., also contribute importantly to a home's selling price. So while a home's value may be $300,000 a sloppy neighbor can devalue a home, making it less desirable.

The first sign of a bad neighborhood are the driveways. Americans are the only species I know who will pay $275,000 for a home; stuff the garage with dirty tools, used clothes, old appliances, worn tires, a porcelain sink and toilet bowl and boxes of litter; then park two $35,000 SUVs in their driveways. This clutter also speaks volumes about the inside of the house and the people who live there.

Another easy ''tell'' is a boat, trailer or camper parked in the backyard or at the curb. These things stand out like scarecrows and suggest the owner's personal habits are more in common with a junkyard than a personal residence.

Glimpse the neighbors' lawns. If they're unkempt, have mange spots and weeds, and the edges spill on the sidewalk, walk away. This suggests your potential neighbor is verbally abusive, physically aggressive, doesn't socialize well and may exhibit some undesirable personality quirks. These and other physical signs often indicate a neighborhood that is in the process of decline.

Lastly, put your realtor to work or hire a private investigator. You want a background check (for obvious reasons) on your potential neighbors. Are any of them sex offenders? Do some have criminal records, or are they involved in other activities that you consider offensive? If the neighbor has kids, check them out through the juvenile court system.

Finally, get a copy of your potential neighbors' credit reports, check with the police department to see if civil complaints may be been filed, then visit potential neighbors on Facebook. Certainly, you would rather know the answers to these questions before you buy a home than discover some nasty truths when it's too late.

Some readers might think this is overkill, a request for unnecessary personal information or an invasion of privacy. And they may be right. Though, they should be mindful that a bank will ask you many similar questions prior to approving YOU for a mortgage.

A home is usually the largest purchase most folks will make in their lifetimes. So if a buyer wants to protect his investment, his family and his future, he needs this information to make an informed decision.

Please address your financial to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com. COPYRIGHT 2011 CREATORS.COM

Published: Thu, Jun 23, 2011