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Five Things You Must Absolutely, Positively Know Before You Buy Any Home
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1. Don`t Get "Pre-Qualified!"
Do you want to get the best house you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. Often other terms, such as the financial strength of the buyer, are critical to a seller.
In years past, we always recommended that buyers get "pre-qualified" by a lender. This means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you "pre-qualified" and issues a certificate that you can show to a seller. Sellers are aware that such certificates are WORTHLESS, and here`s why! None of the information has been verified! Oftentimes unknown problems surface! Some of the problems I`ve seen include judgments, child support payments due, glitches on the credit report due to any number of reasons both accurately and inaccurately, down payments that have not been in the client`s bank account long enough, etc.
So the way to make a strong offer is to get "pre-approved." This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few minutes to a few days depending on your situation. It`s VERY POWERFUL and a weapon we recommend all our clients have in their negotiating arsenol.
2. Sell First, Then Buy
If you have a house to sell, sell it before selecting a house to buy! We haven`t seen many contingent sales work in the past few years, unless it`s with a new home builder who has other houses to sell and can afford to put one on a contingency. Let`s pretend that we go out looking for the perfect house for you. We find it and you love it! Now you have to go make an offer to the seller. You want the seller to reduce the price and wait until you sell your house. The seller figures that`s a risky deal, since he might pass up a buyer who DOESN`T have to sell a house while he`s waiting for you. So he says OK, he`ll do the contingency but it has to be a full price offer! So you see, you`ll pay more for the house than you could have because of the contingency. Now you have to sell your existing house, and in a hurry! Otherwise you`ll lose your dream house! So to sell quickly you might take an offer that`s lower than if you had more time. The bottom line is that buying before selling might cost you TENS OF THOUSANDS of dollars. We always recommend that you sell first, then buy.
If you`re concerned that there is not a house on the market for you, then go on a window-shopping trip. We`ll be glad to give you an overview of homes on the market based on your criteria, and show you some if you desire. You can identify possible houses and locations without falling in love with a specific house. If you feel confident after that, then put your house on the market.
3. Play the Game of Nines
Before house hunting, make a list of nine things you want in the new place. Then make a list of the nine things you don`t want. We call this "NINE OF THIS AND NONE OF THAT." You can use this list as a scorecard to rate each property that you see. The one with the biggest scorecard wins! This helps avoid confusion and keeps things in perspective when you`re comparing dozens of homes.
When house hunting, keep in mind the difference between "SKIN AND BONES." The BONES are things that cannot be changes such as the location, view, size of the lot, structure, flow and floor plan, and school district. The SKIN represents easily changed surface finishes like carpet, wallpaper, color and window coverings. Buy the house with good BONES, because the SKIN can always be changed to match your tastes. We always recommend that you imagine each house as if it were vacant. Consider each house on its underlying merits, not the seller`s decorating skills.
4. Don`t Be Pushed Into Any House
Your agent should show you everything available that meets your requirements. Don`t make a decision on a house until you feel that you`ve seen enough to pick the best one. Go to the Multiple Listing computer with your agent to make sure that you are getting a COMPLETE list of homes for sale and not just the homes that the agent wants to show you.
In the late 1980`s, homes were selling quickly, usually a few days after listing. In that kind of market, agents advised their clients to make an offer ON THE SPOT if they liked the house. That was good advice at that time. Today, in our market, there isn`t always this urgency, unless a home is drastically under priced, and you`ll know if it is. But keep in mind, if you wait too long there is always a chance of the house selling before you get your offer to the seller. If you really like a house, get an offer written and make sure your agent writes in the proper clauses to get you out of the offer if necessary.
Don`t forget to check into the SCHOOL DISTRICTS of the area you`re considering. Information is available on every school, such as class sizes, % of students that go on to college, SAT scores, etc. You can get this information from your agent, or directly from the school, or from the Community section of this web site.
5. Stop Calling Ads!
A word of caution - agents create ads solely to make the phone ring! Many of the homes being advertised have already been sold! Many of the homes have some drawback that`s not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What is not mentioned in the ad is usually more important than what is. Remember that the person writing the ad - -the person you are calling - - is representing the seller and not you! They have a contractual obligation to the seller, not you.
The most important thing you can do is have someone on your side looking out for your best interest. Your own agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about. Your own agent will contractually represent your interests, and does not cost you a penny!. The agent is paid by the seller when you buy a home.
So whether you decide to work with us or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer`s broker. Then you become a client with all the rights, benefits, and priviledges created by this agency`s relationship, and you`re no longer just a shopper.
Did you know that many homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUT IN THE PAPER? These GREAT DEALS go to those people who are committed to working with one agent. When an agent hears of a great buy, who do you think he`s going to call - - his client (who he has a legal obligation to work for), or someone who just called on the phone and said "keep your eyes open?" So, to get the best buy on a property, we always recommend that you hire your own agent and stick with him or her.
There Are Realtors. . .
. . . And then there are Committed Real Estate Professionals.
Which One Do YOU Want Representing Your Interests?
We hope the information above has given you useful advice for helping you find, buy and finance your next home. And at this point, you`re probably pretty clear that, in order to find the right home and save money, you need someone competent and professional to represent YOUR interests.
The Magic Realtors recognize this fact, which is why we wrote this special report, and structured our practice around giving the most competent service possible.
There`s a difference between agents who simply sell real estate, and those who commit to whatever it takes to serve a client beyond their expectations. We make it a priority to educate you on every aspect of buying a home in your preferred area.
We guarantee everything we do in writing. This places the burden of risk and performance on US, not you. We also have references for reputable people in mortgage lending, appraisals, inspection, repair, tax specialists, and attorneys. These are people we have used in other transactions.
Each day we speak with dozens of people directly related to buying or selling real estate. And we receive over 80% of our new clients through referrals and repeat business. Our personal marketing involves such outstanding and continued service to our existing clients and personal network, they are inclined to recommend our services with family and friends. We`re not saying these things to impress you, but to impress UPON you the difference between a Realtor and competent dedicated Real Estate Professionals. Buying and selling real estate can be tricky business. And selecting the wrong Realtor can cost you a lot of money, headaches, and wasted time.
Call us today, and experience the MAGIC! 770-653-0756
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