Learn lessons from '05

The government rewards us for being homeowners.

And why not?

We are investing in the American dream, which for many people includes homeownership. The government allows us to write off our mortgage interest and taxes on our federal tax returns.

In addition, if we own investment property, we can depreciate this property over time.

What a way to go.

Make your plans and take your time to think of your future. Real estate is not a get-rich-quick scheme. It is a long-term, deliberate choice to buy, enjoy and build equity.

The mistakes of 2005 tell us over and over again that we are not in the kind of market to buy and "flip" or sell quickly and make a profit. Those times are gone.

However, 2005 has taught us the following:

--- Be careful in looking for mortgages. Make sure you find the best interest rates and the lowest closing costs.

Make sure you understand the consequences of possible pre-payment penalties or changes in the interest rate that could negatively affect you.

Do not be afraid to ask questions and talk to several lenders.

Understanding closing costs isn't always easy, so ask about "typical costs," "mandatory costs" (like taxes) and "garbage fees" (unnecessary lender charges).

Most important, do not go for the mortgage you can just afford, but be conservative and go for the amount of mortgage payment that you are comfortable with.

--- Be careful in looking for homes. Do not view more than five homes in one day.

A trained Realtor can keep up with the numerous combinations, but most people start losing track after three -- remembering such basics as location, floor plan, colors and particular features of the home.

The most important part of purchasing a home is the location. It should be convenient to work, schools and shopping.

Rank the homes that you see and eliminate the ones that do not work for you.

Think and be critical about the homes you have viewed, but remember that many features, such as paint color, landscaping, carpet and flooring, can be changed.

Location, floor plans and neighborhoods cannot. These are most important.

--- Know about the sales contract that you will sign and make sure this contract is contingent on any inspections of the home being satisfactory to you, in all respects OR you reserve the right to cancel this contract.

--- Make your home purchase a priority. Find a knowledgeable agent you trust.

A good agent will guide you and assist you in this most important decision.

Make this decision wisely. Lessons learned from 2005 are good lessons.