Buying a home can be complicated and frightening. You acquire a large debt and assume many new responsibilities. And in the back of your mind is that nagging question, “Did I get ripped off?”

The American Homeowners Foundation has prepared a list of 10 tips designed to help you make the best home-buying decision possible.

1. Look at the purchase as an investment. Home equity is one of the primary ways Americans save. Tax incentives and the ability to tap into your home equity under certain circumstances make buying a home a prudent financial investment for most people.

2. Avoid short-term loss. Most places have seen rapid home price appreciation. But in some places, average home prices have dropped over the short term in recent years. It is always possible that unforeseen conditions may force you to sell your home in a slow market. You can make the most of your investment by buying in a neighborhood where home values are expected to appreciate.

3. Use a buyer’s agent. A buyer’s agent represents the buyer and is paid by the buyer to represent his or her interests. In a traditional transaction, the real estate agent represents and is paid by the seller. In such cases, agents must disclose all relevant information to the seller, but not to the buyer. If you’re not a skilled negotiator, a buyer’s agent is probably the smart choice.

4. Choose your agent wisely. Look for an agent who is experienced in working with buyers, knowledgeable about the neighborhood you are considering and doesn’t have a reputation for being pushy. Interview at least three agents, and ask for references. A good agent knows you need time to sort out the many factors involved in a purchase decision.

5. Watch interest rates. Experts recommend you buy and sell real estate when interest rates are low–if you can. The lower the interest rates, the bigger the mortgage a buyer can afford. An asking price may sound too high, but at a lower interest rate, you might be able to qualify for a loan and afford the payments.

6. Carefully inspect the home. Learn as much as possible about evaluating the condition of a home. Avoid making an offer on a home with a major defect. Always have a professional inspection. If problems are uncovered, you may be able to use the estimate for repairs as leverage to get the owner to lower the asking price.

7. Research mortgage options. Sellers normally want buyers to apply for a mortgage quickly. Before you make an offer, get all of your paperwork together and research what kind of mortgage fits you best. Get rate quotes from at least three lenders. Consider getting a loan commitment in advance. If you are able to “lock in” an interest rate, remember that doesn’t last forever, so make certain you’re ready to make a decision.

8. Learn about the seller. There might be mutually beneficial opportunities. For example, a seller who is saving for retirement or a child’s education might be willing to finance all or part of the home purchase at a rate that is lower than you could obtain otherwise and more than they could earn elsewhere.

9. Learn to negotiate. Money is saved or lost in negotiation of just about every transaction. Even if you have a buyer’s agent, you’ll have to make decisions about how much to offer and how much to compromise on a counteroffer.

10. Study, study, study. These tips are only the beginning. You’ll need to know a lot more if you want to make wise decisions. Read articles on home buying, financing, negotiating, home inspection and real estate contracts.

David S. Jones is senior editor for the Real Estate Center at Texas A&M University.

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