|
5 Secrets to Buying
the Best House for Your Money |
1. Get
"Pre-Approved" - Not "Pre-Qualified!"
Do you want to get the best
property you can for the least amount of money? Then make sure you are
in the strongest negotiating position possible. Price is only one
element in the negotiations, and not necessarily the most important one.
Often other terms, such as the strength of the buyer or the length of
escrow, are critical to a seller.
In years past, it was always
recommended that buyers get "pre-qualified." 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!
Many times unknown problems can
come to the surface! Some of the problems I've seen include recorded
judgments, alimony 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 clients' bank account long enough, etc.
So the way to make the
strongest offer today 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 days to a few weeks
depending on your situation. It's VERY POWERFUL and a weapon I recommend
all my clients have in their negotiating arsenal. I am the
instrument to make that a reality. Call me, email me,
contact me anyway you can BEFORE you look to buy.
2. Sell Your Property
First, Then Buy the House
If you have a house to sell,
sell it before selecting a house to buy! Contingency sales aren't nearly
as strong as one that comes in with a ready, willing and able buyer.
Consider this scenario: You've found the perfect house - 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 this is 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! You have now paid more
for the house than you could have because of the contingency, and you
have to sell your existing house in a hurry! Otherwise you lose the
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 THOUSANDS of dollars.
If you're concerned that there
is not a house on the market for you, then go on a window-shopping trip.
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.
Another tactic is to make the
sale ''subject to seller finding suitable housing''. Adding this phrase
to the listing means that WHEN YOU DO FIND A BUYER, you will have some
time to find the new place. If you don't find anything to your liking,
you don't have to sell your present home.
3. Play the Game of
Nines
Before house hunting, make a
list of things you want in the new place. Then make a list of the things
you don't want. You can use this list as a guide to rate each property
that you see. The one with the biggest score 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 ''STYLE AND SUBSTANCE''. The SUBSTANCE are things
that cannot be changed such as the location, view, size of lot, noise in
the area, school district, and floor plan. The STYLE represents easily
changed surface finishes like carpet, wallpaper, color, and window
coverings. Buy the house with good SUBSTANCE, because the STYLE can
always be changed to match your tastes. I 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.
A decade ago, 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 the time. Today there isn't always
this urgency, unless a home is drastically under-priced, and you'll know
if it is.
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 this web
site.
5. Stop Calling Ads!
Please note - ads are sometimes
created to make the phone ring! 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's not mentioned in the ad is usually
more important than what is.
For this reason, I want you to
be very careful when reading ads. Remember that the person writing the
ad is representing the seller and not you! The most important thing you
can do is have someone on your side looking out for your best interests.
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. So whether you decide to work with me 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
privileges created by this agency 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 hard for you,
or someone who just called on the phone and said "keep your eyes
open"? So to get the best buy on a property, I always recommend
that you hire your own agent and stick with him or her. |
