How to get THE home at THE price
The process of buying a home can be an emotional, time-consuming venture. As with most major life decisions, the amount of work and research you undertake before you begin the process can have a dramatic effect on how happy you are in the end.
#1 Do you really need that backyard tennis court?
It is essential to treat the buying process in a slightly detached manner. It is recommended that you develop a list of needs and a list of wants. When looking at houses, make sure that they cover all of your needs – things like adequate space, a good neighborhood, perhaps a garage – and then have fun with items on your wants list!
#2 Get pre-approved
Visit or call your lender prior to shopping. Be sure to get a pre-approval or mortgage commitment in writing. Being pre-approved gives you a solid price range, and lets your Realtor® and potential sellers know you are serious and not just a browser.
#3 Get the right people behind you
Buying a home is a complicated process, with many people involved. Having the right people on your side can make a big difference. An experienced, dedicated, and knowledgeable Realtor® can put a team of advocates, including lenders, lawyers, home inspectors and movers, on your side immediately.
The more you share with your Realtor®, the better he or she will be able to represent you. Let your agent know exactly what you are looking for in terms of needs, wants, price range, and location. It will help make sure you end up in the right home for you.
#5 Location, location, location
It’s still true. The desirability and resale value of your home depend on location more than any other factor. People want a desirable community that includes character, quality of schools, access to work, major transportation arteries, recreational facilities, etc. Be sure to take a careful look at the location of your new home and ask the following questions: How does this home compare to others in the neighborhood? Are yards fenced? Are there many children playing in the streets? Are the front and back yards and the exteriors of the homes properly maintained? The less expensive houses in a better area tend to appreciate faster than the most expensive houses in a less desirable area.
Additional factors that affect the property value of a home include traffic, sounds, smells, zoning bylaws, and many others. Be objective. Be sure you are completely satisfied with the neighborhood.
#6 Use your Realtor’s® knowledge
Your Realtor® is trained in all aspects of real estate, including understanding supply and demand, economics, and the neighborhoods of the cities in which they practice. A professional Realtor® can do much of the work for you, by reviewing your needs, reviewing available properties, and making an informed match. A comprehensive knowledge of the available homes in your neighborhood is one of your Realtor’s® strongest assets. With the aid of computerized systems, a Realtor® is notified within hours when a home becomes available.
#7 Pay attention to red flags
When evaluating a home, be sure you know the difference between acceptable and unacceptable problems.
Cosmetic items like peeling paint, worn carpeting, or unattractive wallpaper can be easily remedied, and can be used as negotiation items, as there will be costs involved in updating the home. Major problems, however, are clearly red flags. Look for items such as major foundation cracks, water damage, outdated electrical systems, and inadequate plumbing. These items could be too expensive to remedy to make the home a worthwhile investment.
#8 Hire a home inspector
A home inspection is an inexpensive way to gain peace of mind, and guard your pocket book. A proper inspection will cover all areas of the house including foundation, electrical, heating, plumbing, floors, walls, ceilings, attic, roof, siding and trim, porches, patios, decks, garage and drainage. A professional inspector can give you an objective view of the property, with a written report, indicating the present condition and items that will need repair.
#9 Be cautious with fixer-uppers
Sometimes, a fixer-upper can be purchased below market value, and once sufficient repairs are made, can be sold at a significant profit. However, not all fixer-uppers will bring in the profits you might expect.
Consumers often overestimate their level of dedication to doing extensive renovation work, and underestimate the costs associated with such work. A wall that needs to be replaced can often lead to the discovery of faulty plumbing, electrical, or other major undertakings. Your Realtor® and home inspector are your best allies when it comes to cost-benefit analysis.
#10 Consider your future needs
A move can be a major undertaking. Take a good look at your current lifestyle and consider the future. Will you need extra space for a home office, a child, or perhaps a child moving back home? Perhaps it may be easier and less expensive if you purchase a home that can meet these needs now, rather than moving up to a larger home a few years down the road.
#11 Proceed quickly
When you’re ready to buy, act. Good properties sell. This fact is especially true given the current state of most real estate markets. However, when you work with a Realtor®, you have access to the latest technology. As part of the MLS and Agent Handshake networks, a Realtor® has access to properties within hours of listing.
#12 Clarify relationships
In any real estate transaction, be very clear about who is working for whom, and what the relationship represents. Unless otherwise stated, an agent represents the seller in transactions for the sale of a home. This agent, as part of his or her fiduciary duty, must ensure that the seller’s (and not your) position is represented throughout the entire process. Get a buyer’s agent on your side, or ensure that someone is acting in your best interests.
#13 Ask for a written CMA
A Comparative Market Analysis (CMA) is an analysis of comparable homes in a given neighborhood. It shows you the sale prices of comparable homes in the neighborhood, along with asking prices of other homes in the area currently on the market. A Realtor® can request this report for any home and neighborhood. Ask for this report in writing. With this valuable document, you’ll have solid, reliable information about how fairly a home is priced compared to its real market value.
#14 Know the seller
Understanding a seller’s reasons for moving could work to your advantage during negotiations. For instance, a seller who has been transferred to another city may be more motivated to sell than someone who is still shopping for a new home. A vacant house, or a house that has been on the market for several months and has been reduced in price, could also provide the opportunity for lucrative negotiations.
#15 Keep it impersonal
Conversely, information could be used to your detriment. Information about your mortgage, size of down payment, move-in deadline, or circumstances for buying could be used to the seller’s benefit in negotiations. While you want your Realtor® to know these details, maintain your poker face and keep your cards hidden with the sellers and their agents.
#16 Measure twice, sign once
While you definitely want to move quickly once you’ve made the decision to purchase, you do not want to cave in to pressure for a quick close. Someone who is trying to pressure you into buying a home is likely doing so for a reason. Make sure the reasons for you to buy a home are your reasons, not theirs.
#17 Exercise your negotiating skills
Even if you prefer not to haggle, it’s worth it, especially when it’s your home and one of your biggest investments. Most people expect to haggle over the price. There is always room for negotiation, and your Realtor® should be a professional negotiator.
#18 Avoid bidding wars
In some cases, the seller’s Realtor® may use scare tactics to rush the sale or increase the price. Falling for this trap could cost you money. If there is another buyer, or some other reason this pressure is being applied, whoever wins also loses because they tend to overpay. Let reason be your guide, not passion.
#19 Get it in writing
Legally, sellers must disclose all known material defects of a property. Ask for this in writing. Also be sure to consider the ramifications of these defects. Are they things that have been taken care of already or things you need to include in your budget.
#20 Be aware of hidden costs
While Realtors® often tempt first-time buyers with rent/mortgage comparisons, there is more to a home than simply the mortgage. You will be responsible for other items including mortgage insurance, appraisal fees, legal fees, inspection fees, transfer taxes, title insurance, inspections, property tax, increased bills, etc. Your Realtor® can give you a good idea of the costs associated with buying a home that are beyond its final negotiated price.
Real Estate for Today’s Market.
Contact me directly
Brenda Hanson 952.250.3896
Apple Valley, Minnesota
MN License #40482511