John and Michelle Ternullo // North of Boston Real Estate
This is a very good article for homebuyers.. a must read!
By Tara-Nicholle Nelson Broker in San Fransisco, CA
1. FALLING FOR THE DÉCOR- While the furniture may look pretty- keep in mind, it doesn’t come with the house! Too much clutter or conversely, an empty room will make a space look smaller. Does the space and layout work? If you can look past the vintage wallpaper and don’t mind painting, you stand a better chance of buying more home for your money.
2. Not being ready- It could take months before finding the right home or it may be the 1st home your agent shows you- Are you ready to make an offer? Is your financing in order? Many buyers continue to look even after finding something great and priced right… just to “be sure”. When they finally decide to move forward, or when they are ready- often enough the home has generated other interest (now it will cost more if you want to buy it) or even worse -the home is no longer for sale and is under contract.
3. “IT’S A BUYERS MARKET”- A buyers real estate market doesn’t mean there aren’t ANY buyers in the market! If the home looks good to you, chances are it looks good to many more…Even in a down real estate market a quality home that is well priced will move fast. Ask your buyer’s agent about the local real estate market trends- What may be happening on a statewide or national level may or may not be the case in your neighborhood.
4. HANGING YOUR HAT ON THE LIST PRICE- You never want to search for homes for sale above your price range and over extend your budget, however it is not uncommon for sellers to list their home 5, 10 or even 15% over market value. If you find a property that meets your search criteria, but looks like it is slightly over your price range, ask your Realtor for a home market analysis, it may be just over priced. Conversely if you find a property that seems a little too good to be true- it very well may be the seller’s strategy to attract a large amount of buyers. If your agent’s market analysis reveals the property is aggressively priced, keep in mind when you submit your offer that they may be some competition.
5. low ball offers- If an offer is substantially below home market value, some homeowners may get insulted and decide to reject the offer completely rather than counter the offer. It also gives impression that the buyer isn’t serious, so a homeowner may counter, but might be reluctant to offer their best terms and may be slow at responding- (While an offer is being countered, in the mean time, a good listing agent may be informing other prospects about the offer to generate others in hopes to create a bidding war!)
Has there been a lot of activity on the home? What is the seller’s motivation for moving? If your offer is low – have a (non-derogatory) explanation why.. If your offer is genuine, with good reason, you stand a better chance of getting it considered.
6.The seller is the enemy! - Buying a home isn’t a game of winning or losing. Treat the seller as you would like to be treated and be flexible on issues that are less important to you. Once buyers and sellers “draw the line” it’s nearly impossible to successfully negotiate. At some point of the negotiations or transaction, you most likely will need the sellers cooperation…and more often than not the more they like you the more they are willing to offer you.
5. losing your cool- The whole process of buying real estate and moving are ranked high on the list of most stressful events of our lives- Its easy for emotions to get the best of us. Maintain a good sense of humor, expect problems, and remind yourself buying real estate is a business transaction. Keeping the right mindset help you make smarter decisions and more importantly, keep your sanity!
1. GET PRE-APPROVED by a reputable lender, before previewing homes. Many REALTORS will not show properties to potential buyers without having a pre-approval letter. By getting a pre-approval beforehand, it allows you and your real estate agent to search homes for sale that both meet you criteria and your budget. In addition, if you were to search for homes for sale, and fell in love with a home, you would not be able to put in an offer (or at least an appealing one) since you can’t show the seller and/or listing agent you are qualified to buy the home.
2. CHOOSE A GOOD LENDER- Of course you want to shop around for rates and fees, however that should not be your only criteria. Lending as changed so much just over the last few years, and many transactions have not made it to closing because of banking issues. A good lender should be pro active and diligent about the lending process to assure the smoothest transaction possible to alleviate the stress of losing the home you chose and potentially losing your deposit!
3. HIRE A GOOD REALTOR- Plan to meet your REALTOR before previewing homes to discuss not only your search criteria, but to learn about the home buying process and time line. Ask about local market trends as well as strategies for getting your offer accepted at the best possible price. You should feel comfortable with your REALTOR to ask questions, and discuss concerns. Besides help with your search a good REALTOR will evaluate the market for you, strategize the offer, guide you through the process and stay on top of the details to solve inevitable problems that occur when buying a home.
4. SET REALISTIC SEARCH CRITERIA- Make of list of “must- haves”. Then make a list of “would-likes” Consider if you are able to make any improvements. Enter your “must-haves” in your search criteria online and see what comes up. Are the homes listed within your price range? If so, enter your “would- likes”. As long as you have set realistic goals within your budget, it is common not to have all of your “would-likes”. If you are willing to do some cosmetic work than you will have more flexibility in your search criteria. If you find your list doesn’t match the price points available for sale, than it’s time to revisit the search criteria.
5. DRIVE AROUND the areas where you are considering buying a home. A home purchase is much more than the home itself- you’re buying into the location and neighborhood as well. What is the feel of the neighborhood? What are the other homes like? Well maintained? Similar style/size? What is the proximity to important areas like work? Family/ Friends? Shopping? Highways? Churches? Parks? Schools?, Etc.
6. ASK FOR A MARKET ANALYSIS- Once you have found a home that you are ready to put an offer in, ask your agent for a market analysis on the property. They should provide you with a current market value of a home based on recent comparable sold homes, as well as local market trends. This information will not only help you make sure your offering and/or getting a fair price but will also provide insight on strategies on getting your offer accepted at the best possible price.
7. BE PREPARED for some heartache. Buying real estate can be an emotional roller coaster! Are you ready to keep looking if your offer doesn’t get accepted? Are you ready to look at the home inspection report that has an endless list of problems? Are you all packed up and ready to move but the closing got delayed?
Do your homework and get mentally prepared. Buying a home is the largest financial decision many of us will make, so its normal if it feels a little scary to take the first step. Don’t be in a rush or make hasty decisions, but when you find something good – go for it!
