Armchair Millionaire Community Bulletin: The Best Deal on the Best Digs

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Home ownership is part of the American Dream for some very good reasons. When you're ready to join the ranks of homeowners, do the footwork in advance that will ensure that you get the best deal possible.

A house can be one of the best investments you’ll ever make. According to Freddie Mac home prices nationwide increased a whopping 10.0 percent in the year ending in the second quarter of 2004. And under today's tax laws, most if not all of your gains will be free of capital gains taxes--a very good deal, indeed.

But regardless of how your home might appreciate in the future, you still want to get the most for your hard-earned money now. We tapped the collective wisdom of the Armchair Millionaire community for its best advice. Here are some of the gems we uncovered:

"Always be prepared to walk away from even the most perfect-seeming house if the bidding isn't going well. Don't become so emotionally involved in the bid that you lose sight of what is financially the best thing for you." --Julie

"Everyone knows that you can get a good deal from a desperate seller but alternately, you can get a good deal from a wealthy seller who does not want to be bothered with negotiating for a few more dollars. My advice is to find out all you can about the sellers and let that guide you when making an offer." --Rocy D.

"The best way to get the best deal on a house is to check how long houses in that neighborhood have been on the market. The sellers may be anxious to move and willing to accept much less. Check other houses for sale in the same neighborhood and find out the discrepancies between the house you're interested in and other comparable houses. This may give you bargaining power to get the best deal." --Sean S.

As a first-time home buyer, you'll be faced with a range of issues, many of which may seem confusing in the beginning. My checklist will clear those up and set you out on your most important steps.

The Armchair Millionaire's Checklist for Buying a Home

Order a credit report. It's inexpensive (even free in some states) and will give you the full picture of what you owe. In addition, you'll want to ensure that you have plenty of time to have any errors corrected before you apply for your mortgage. (A recent study by the U.S. Public Interest Research Group found that 25 percent of all credit reports contain errors serious enough to result in credit being denied.)

Get pre-approved for a mortgage. Knowing exactly how much you can afford and having your financing in place will give put you in a much better bargaining position when it comes to making an offer.

Find a real estate agent. Use the Web to locate candidates or check with friends and co-workers for recommendations. Don't hesitate to interview several agents before choosing. And make sure you understand exactly who the agent represents--you, the seller, or both. Remember, if the agent represents the seller of a home that you're interested in buying, they must act in the best interests of the seller, not you.

Prioritize your wish list. Make a list of the things you'd like to have (like a hot tub in the back yard) and the things you must have (like a third bedroom for the baby on the way). This will save you a lot of time and will help you end up with the house you really wanted.

Don't get swept off your feet. It's easy to fall in love at first sight with some homes, but be sure to ask yourself some commonsense questions: How are the schools in the area? Is it convenient to your job, to shopping, to childcare? Does it need many minor (or any major) repairs? How much are the annual property taxes?

Negotiate a fair price. Consider several things before you make the offer. Is the asking price comparable to similar properties in the area? How long has the house been on the market? Does the home need any expensive repairs? Are there other buyers making offers at the same time? The answers to these questions can come from your broker and will give you hints as to whether the seller might accept a lower offer. If your initial offer is rejected--and they often are--don't despair. You may have to go back and forth several times before agreeing on a price.

THE BOTTOM LINE: Home ownership is part of the American Dream for some very good reasons. When you're ready to join the ranks of homeowners, do the footwork in advance that will ensure that you get the best deal possible.

THE ARMCHAIR MILLIONAIRE WEEKLY SURVEY: How's your cash flow these days? Log on to and let us know.

Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, The Armchair Millionaire, was published in 2001. Schiff's newest report, "How to Know When You Are Rich," is now available at


Lewis Schiff

Armchair Millionaire


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Lewis Schiff