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 for the least money? Then make sure that you are in the strongest negotiating position. Price is only one element in the negations and often not the most important one. Other terms, such as the fiscal strength of the buyer or the length of escrow, are critical to the seller.
In years past, it has been recommend that buyers get “pre-qualified”. This means that you spend a few minutes on the phone with a lender answering a few questions. Based on the answers, the lender pronounces you “pre-qualified” and issues a certificate you can show to a seller. Sellers are aware that such certificates are WORTHLESS, and here is why! None of the information has been verified!
Many times unknown problems can surface! Some of the problems include recorded judgments, alimony payments due and glitches, right or wrong, on the credit report due to any number reasons, etc.
So the way to make the strongest offer today is to get “pre-approved”. This happens after all the information has been verified. You are actually APPROVED for the loan and the only loose end is the property appraisal. This process can take anywhere from a few days to a few weeks.. It’s a VERY POWERFUL WEAPON and one you should have in your negotiating arsenal.
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 offers aren’t as strong as ones that come in with a ready, willing and able buyer. Consider this scenario: You’ve found the perfect house-now you have make an offer to the seller. You want the seller to reduce the price and wait until you sell your house. The seller figures 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 it but, it has to be a full price offer! You have now paid more for the house than you could have, and you have to sell your current home in a hurry! 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.
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. Use these lists as a guide to rate each property. The one with the highest score wins! This will avoid confusion and keeps things in perspective when you’re comparing many homes.
When house hunting, keep in mind the difference between “STYLE AND SUBSTANCE”. The substance are things that can’t be changed such as location, view, size of lot, noise in the area, 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.
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 everything available that meets your requirements. Don’t make a decision on a house until you feel that you have seen enough to pick the best one for you.
In the past few years, homes in Santa Fe have been selling quickly, often a few days after listing. In that kind of market, Realtors may advise their clients to make an offer ON THE SPOT if they like the house. That can be good advice. However, there isn’t always this urgency, unless a home is drastically under priced, and you’ll know if it is. This is great reason to work with a knowledgeable buyer’s agent.
Don’t forget to check into the school districts in the area you are considering. Think resale!
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 as important as what is.
For this reason, please be very careful when reading ads. Remember that the person writing the ad is representing the seller, not you! The most important thing you can do is have someone on your side looking out for your best interests. Your own buyer’s agent will critique the property with an eye towards how well it meets your needs and will point out any and all drawbacks you should know about. So whether you decide to work with me or not, pick a buyer’s agent you feel comfortable with and enlist the services of that agent. Then you become a client with all the rights, benefits and privileges created by this 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 going 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/smart with, or someone who just called on the phone and said “if you see something good, call me”.
So to get the best buy on a property, I always recommend that you hire your own buyer’s agent and stick with him or her. And best of all the seller, in most cases, pays for it. |
