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Buying
a Home
1. Use a Buyer's Agent
2. Why You Shouldn't Make Any Major Credit Purchases
3. Getting a Legitimate Lender and Getting Pre-Approved
4. Finding the Right Seller
5. Build a Plan of Action and Get Ready
6. Hot, Normal, and Cold Markets
7. Importance of Inspection
8. Avoiding Financial Stress |
Selling Your
Home
1. Getting the Highest Price in the Shortest Time
2. Making a Good First Impression
3. Know Why You are Selling
4. Setting the Price
5. Plan of Action
6. Finding the Right Agent
7. Considering Offers
8. Insist on a Home Inspection
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1. Use a Buyer's Agent
It's important that you choose an experienced agent who is there for you.
Your agent should be actively finding you potential homes, keeping you
informed of the entire process, negotiating furiously on your behalf, and
answering all of your questions with competence and speed.
First, find an agent who represents you and not the seller. This is
beneficial during the negotiation process. If you are working with a
buyer's agent, he or she is required not to tell the seller of your top
choice. In addition, he or she is also focused on getting you the lowest
asking price.
Also, when you use a buyer's agent, you will see
more properties. Not only are they plugged into their Multiple Listing
Service, but also they are actively finding homes that are listed as
FSBO, or homes that sellers are thinking about listing. (back to Buyer Tips)
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2. Why You Should Not Make Any Major Credit Purchases
Don't go on a spending spree using credit if you are thinking about buying
a home, or in the process of buying a new home. Your mortgage pre-approval
is subject to a final evaluation of your financial situation.
Every $100 you pay per month on a credit payment could cost your about
$10,000 in home eligibility. For example, a car payment of $300/month
could mean that you qualify for $30,000 less in a mortgage.
Even if you have accumulated enough savings, you should consider not
making any large purchases until after closing. The last thing you want
is to know that you could have purchased a new home had you curbed the
urge to spend. (back to Buyer Tips)
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3. Getting a Legitimate Lender and Getting Pre-Approved
It used to be that buyers could go
house shopping and when they have found their dream home, then they
go to get pre-approved. However, in today's market, that has proven
to be one of the least effective methods in landing the dream home.
Most lenders can pre-qualify you for a mortgage over the phone. Based on general
questions about your income, debt, assets, and credit history, lenders can
estimate how much mortgage you qualify for. However, being pre-qualified and
pre-approved are different things. Pre-approval means that you have applied
for a mortgage; you have filled out the mortgage application, received your
credit report, and verified your employment, assets, etc. When you are pre-approved,
you know exactly what the maximum loan amount will be.
A pre-qualified letter is not verified and in essence, does not count for much
if you are competing with other buyers who are pre-approved. When you are pre-approved,
you and the seller know exactly how much house you can afford. It gives you
credibility as an interested buyer and lets the seller know immediately that
you will qualify for a loan to buy their property.
In addition to being pre-approved, it's important to be pre-approved with a
legitimate lender. Legitimate lenders include: banks, mortgage bankers, credit
unions, savings and loan associations, mortgage brokers, and online lenders.
Some lenders to avoid: those who lose a form or misplace a file, those who
gather information from you in an unorganized manner, those who are not informed
about interest rates, points or costs, and those who cannot provide you with
the right information. (back to Buyer Tips)
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4. Finding the Right Seller
The best seller is one who
is highly motivated. A highly motivated seller is more likely to sell
for less than his or her house is worth. And it matters that you find
out why; learning the reason why can help you get the price you want
and help the seller get what they want: a timely sale.
When given the opportunity to meet with sellers, ask them why they are
selling. The reasons could be anything from job change to a new location
to financial problems. If you can solve their problem, whether it is
cash related or time related, do so. For example, if the sellers are
highly motivated because they need to move quickly, give them a fast
sale - and a lower price. If you can make an offer, even a low one, that
gives them cash in a short time, they are more likely to accept.
There are also some sellers that you should avoid. Not every seller
is as genuinely motivated as they make themselves to be. Some possible
hints:
*they stall on having the home appraised or inspected
*is unable to clear up liens against their property
*does not own 100% of their property
*they push back the move-out date
*does not have a replacement property or back up plan
etc. etc. etc.
It is impossible to find the perfect seller. But it is possible to find
out which sellers are legit, and which ones aren't. (back
to Buyer Tips)
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5. Build a Plan of Action and Get Ready
Buying a home will
probably rank as one of the biggest personal investments one can make.
Being organized and in control will contribute significantly to getting
the best home deal possible with the least amount of stress. It's important
to anticipate the steps required to successfully achieve your housing
goal and to build a plan of action that gets you there.
Before you can build a plan of action, take the time to lay the groundwork
for your decision-making process.
First, ask yourself how much can you afford to pay for a home. If you're
not sure on the price range, find a lender and get preapproved. Preapproval
will let you know how much you can afford so that you can look for homes
in your price range. Getting pre-approved helps you to alleviate some
of the anxieties that come with home buying. You know exactly what you
qualify for and at what rate, you know how large your monthly mortgage
payments will be, and you know how much you will have for a down payment.
Once you are pre-approved, you avoid the frustration of finding homes
that you think are perfect, but are not in your price range.
Second, ask yourself where you want to live and what is the best location
for you and/or your family. Things to consider:
*convenience for all family members
*proximity to work, school
*crime rate of neighborhood
*local transportation
*types of homes in neighborhood, for example condos, town homes, co-ops,
newly constructed homes etc. (back to Buyer Tips)
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6. Hot, Normal, and Cold Markets
Hot Market -
This is an extremely competitive market, one that is advantageous to
the seller. Sometimes, homes will sell as soon as they are listed or
even before homes are listed. Typically, during a hot market, multiple
offers will be made on each home and more often than not, homes will
sell for more than their asking price. It is even more crucial to be
prepared and to be ready as a buyer when the market is hot. It can be
easy to get caught up in the bid for a home, but if you are prepared
(pre-approved, solid in price range, realistic about your needs), it
is easier to remain focused on your housing needs and price range.
Normal Market -
In a normal market, there is fairly a large number of homes available
and an average number of buyers. This market does not necessarily favor
the buyer or the seller. A seller may not have as many offers on their
home, but he or she may not be desperate to sell either. Again, it is
the buyer's responsibility to be prepared. During a normal market, the
chances to negotiate are higher than in a hot market. As a buyer, you
can expect to make offers at lower than the asking price and negotiate
a price at least somewhat less than what the sellers are asking.
Cold Market -
In a cold market, houses may be listed for more than a year and the
prices of houses listed may drop considerably. This market is advantageous
to the buyer. As a buyer, you have the time to make an offer that works
to your best interest. It is not uncommon to low-ball and to find that
sellers are accommodating to meet your needs. Keep in mind that even
though this market is a great time for buyers, you do not want to lose
your dream home by being unrealistic. Your goal is to get the your dream
home at the best possible price. (back to Buyer
Tips) |
7. Importance of Inspection
As a buyer, you are entitled to know exactly what you are getting. Don't
take for granted what you see and what the seller or the listing agent
tells you. A professional home inspection is something you MUST do, whether
you are buying an existing home or a new one. An inspection is an opportunity
to have an expert look closely at the property you are considering purchasing
and getting both an oral and written opinion as to its condition.
Beforehand, make sure the report will be done by a professional organization,
such as a local trade organization or a national trade organization such
as ASHI (American Society of Home Inspection). Not only should you never
skip an inspection, but also you should go along with the inspector during
inspection. This gives you a chance to ask questions about the property
and get answers that are not biased. In addition, the oral comments are
typically more revealing and detailed than what you will find on the
written report. Once the inspection is complete, review the inspection
report carefully.
You have to demand an inspection when you present your offer. It must
be written in as a contingency; if you do not approve the inspection
report, then you don't buy. Most real estate contracts automatically
provide an inspection contingency. (back to Buyer Tips)
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8. Avoiding Financial Stress
By asking the right questions, and knowing exactly what your needs are,
you can find the right loan for you. There are certain approaches that
you can take while mortgage shopping that can cost or save you money.
It is still true that the better qualifications you have, the lower
your interest rate will be. However, there are mortgages available for
almost everyone; it's the interest rates or the down payments that vary.
Before speaking with a lender, know what monthly
dollar amount you feel comfortable committing to. Then when you discuss
mortgage pre-approval with your lender, it is easier for you to determine
the monthly amount and what value of home the monthly amount translates
into. Do not put yourself in the position where you will be paying
more each month than you intended simply because the "dream" house
requires it.
Do your research on the types of mortgages available to you and find
the one that best suits your needs. There are a number of considerations
to be made in terms of finding the best mortgage for each individual:
*What type of market are you in? Are the interest rates falling or rising?
*Do you want a fixed mortgage rate, where you will always know what your
payment is going to be?
*What are your long-term goals? Do you intend to resell the property?
Do you only need the mortgage for a short time? (back
to Buyer Tips) |
1. Getting the Highest Price in the Shortest Time
In order to get the highest price in the shortest time, you need to know
how to market your home. The better you market your home, the more offers
you will get. And the more offers you get, the more choices you have to
get the price and terms you want.
The most important factor of marketing your home is pricing it right.
Your price should be adjusted to reflect the market, and the property's
worth. The key is to get many people checking out your property at a fair
price instead of having no buyers because your price is set to high.
Another important factor is the condition
of your home. Make sure that your home looks ready to be sold. Fix any
defects (peeling or faded paint, cracks, stains, etc.) Condition alone
can sometimes prompt fast buying decisions. Not only should you fix any
defects, but consider upgrading your home by making major repairs and
cosmetic improvements before selling. A nice looking home triggers the
emotional response. Lastly, get the buzz out about your home. List your
house with a hot agent that ensures your house is listed on the MLS and
on the Internet. On your own, get the word out. It should be visible to
passerby’s that your
house if for sale, whether it be signs, local advertisements or you telling
friends, family, and acquaintances.se that can lead to a
financial response.
Learn how to negotiate the best terms for all parties involved.
Terms are another factor which may be adjusted to attract buyers. If you
insist on getting your asking price, think of what you can offer to the
buyers, for example, improvements you've made, or even offering seller
financing at a lower than market interest rate on a portion of the sale
price. Convince them why they should be paying the price you have set.
Lastly, get the buzz out about your
home. List your house with a hot agent that ensures your house is listed
on the MLS and on the Internet. On your own, get the word out. It should
be visible to passerby’s
that your house if for sale, whether it be signs, local advertisements
or you telling friends, family, and acquaintances. (back
to Seller Tips)
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2. Making a Good First Impression
If you want buyers to be interested in your home, you need
to show it in its best light. A good first impression can influence a buyer
into making an offer; it influences a buyer emotionally and visually. In
addition, what the buyer first sees is what they think of when they consider
the asking price.
A bad first impression can dissuade a potential buyer. Don't show your
property until it's all fixed up. You do not want to give buyers the chance
to use the negative first impression they have as means of negotiation.
Ask around for the opinions others have of your home. Real estate agents
who see houses everyday can give solid advice on what needs to be done.
Consider what architects or landscape designers have to say. What you need
are objective opinions, and it's sometimes hard to separate the personal
and emotional ties you have for the home from the property itself.
Typically, there are some general fix ups that need to
be done both outside and on the inside. As a seller, you should consider
the following:
*Landscaping - Has the front yard been maintained? Are
areas of the house visible to the street in good condition?
*Cleaning or Redoing the driveway - Is your driveway cluttered with toys,
tools, trash etc.?
*Painting - Does both the exterior and the interior look like they have
been well taken care of?
*Carpeting - Does the carpet have stains? Or does the carpet look old
and dirty? (back to
Seller Tips)
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3.
Know Why You are Selling
If you know exactly why you are selling, then it is easier for you to
set the right plan of action to get what it is that you want.
If you are a seller who needs to close a sale as quickly as possible,
then you should know that getting the highest price possible is not one
of your priorities. It does not mean that you won't or cannot get the highest
price, but it means that the price is not the deciding factor. A buyer
who can give you a quick closing time will appeal much more to you than
a buyer who can offer you more money but the negotiation and closing time
drag on.
It's always good to know how low you will go, in terms of selling price.
This will help to eliminate some of the offers that you find simply offensive
or ridiculous. Even though you should consider all offers seriously and
take into consideration the terms of each offer, sometimes, if you know
the bottom line and are strict about it, you can save yourself time.
Once you know what your limits and reasons are, discuss them with your
agent so that they can help you set your goals realistically. If you decide
to list your home on your own, make sure you do research on the current
market, and you get the proper advice you need in terms of legal issues,
etc. The key is to be realistic and to know what your goals are so that
they can be met. (back
to Seller Tips)
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4. Setting the Price
The price is the first thing buyers notice about your property. If you
set your price too high, then the chance of alienating buyers is higher.
You want your house to be taken seriously, and the asking price reflects
how serious you are about selling your home.
Several factors will contribute to your final decision. First, you should
compare your house to others that are in the market. If you use an agent,
he/she will provide you with a CMA. The CMA will reflect the following:
*houses in your price range and area sold within the last half-year
*asking and selling prices of houses
*current inventory of houses on the market
*features of each house on the market
From the CMA, you will find out the difference between the asking price
and selling price for all homes sold, the condition of the market, and
other houses comparable to yours.
Also, try to find out what types of houses are selling and see if it applies
to your area. Buyers follow trends, and these trends can help you set your
price.
Always be realistic. And understand and set your price to reflect the
current market situation. (back
to Seller Tips)
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5. Plan of Action
1) Analyze why you are selling - If you understand your motives, you will
be able to better negotiate and to get what it is that you want, whether
it be a quick sale, high price, or somewhere in the middle.
2) Prepare you home for the buyer - Maximize the strengths of your property
and fix up it's weaknesses. You want the buyer to walk away from your home
with a lasting good impression.
3) Find a good real estate agent that understands your needs - Make sure
that your agent is loyal to you, and can negotiate to help you achieve
your goals. In addition, they should be assertive and honest with both
you and the buyer.
4) Be prepared for negotiation - Learn and understand your buyer's situation;
what are their motives? Can you demand a big deposit from them? Try to
lock in the buyer so that the deal goes through.
5) Negotiate for the best price and the best terms - Learn how to counter
offer to get more from every offer.
6) Make sure the contract is complete - Be honest with your disclosures;
you do not want to lose the deal because you were lying or diminishing
your home's defects. Insist the buyers get a professional inspection. This
will protect both you and the buyer. (back
to Seller Tips)
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6. Finding the Right Agent
Not all agents work the same way. The most important attribute of an agent
is that he/she is well connected to the real estate industry. He/she should
know the market and provide information on past sales, current listings,
his or her marketing plan, and at least 4 solid references. In addition,
you also want to look for an agent that is honest, assertive, and one that
best understands your needs.
Try to go with a local agent. They can better serve your needs; they are
familiar with what the local market condition is, the local prices are,
and what's hot or not in your community. (back
to Seller Tips)
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7. Considering Offers
When reading an offer, keep in mind
that you are out to get the best price AND the best terms for you. If you
focus solely on the price, you may overlook terms that could be favorable
to you as a buyer.
Some terms that may work in your favor:
*higher-than-market-interest in a second mortgage for your home
*the buyer will pay for most or all of the closing costs
*the buyer will take care of any repairs
*quick close - the buyer is pre-approved and ready to close in a time that best
suits you
*all-cash deal
When reading through offers, remember to look at the whole package. Take the
time that you need to assess what is being offered and if it meets your needs. (back
to Seller Tips)
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8. Insist
on a Home Inspection
A professional home inspection protects
both you and the buyer. It allows both you and the buyer the opportunity
to learn about the property's defects.
A home inspection usually covers the following:
*Plumbing conditions - if there is leakage or clogging
*Roofing conditions - the extent of deterioration, if there is leakage
*Electrical conditions - if there are inadequate circuits or potential fire hazards
*Structural problems - if there are problems with the underlying foundation of
your home
As a seller, the home inspection reports protect you because it establishes the
actual condition of the property at the time of sale. (back to
Seller Tips)
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Whether
you’re buying a home or selling a home, Kent Tullis is dedicated to getting you the best deal!
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