Don't Get "Pre-Qualified"...Get Pre-APPROVED!
Do you want to get the best house you can for the least amount of
money? Then make sure you are in the strongest negotiating position
possible. Price is only one bargaining chip 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, I always recommended that
buyers get "pre-qualified" by a lender. This means that you
spend a few minutes on the phone with a lender who asks you a some
basic 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 usually
un-reliable and don't place much value in them, and here's why!
None of the information has been verified! Oftentimes-unknown
problems surface! Some of the problems I've seen include
recorded judgments, child support 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 a strong 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
that all my clients have in their negotiating arsenal.
Sell First, Then Buy
If you have a house to sell, sell it before selecting a house to buy!
Contingent sales are harder to negotiate, and you come from a position
of "weakness" rather than "strength" in your offer. Sometimes a
new home builder who has other houses to sell can afford to put one on
a contingency, so that may be an exception. Let's assume that we go
out looking for the perfect house for you. We find it and you
love it! 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's a risky deal, since he might
pass up a buyer who DOESN'T have to sell a house while he's waiting
for you. However, he agrees and he'll do the contingency but it
has to be a full price offer! So you see, you paid more for the
house than you could have because of the contingency. Now you
have to sell your existing house, and in a hurry! Otherwise you
lose the dream 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.
I always recommend that you sell first, then buy. 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 a house to your liking, then you don't have to sell your
present home. Or, you can always make your escrow for 60 days, which
would give you 30 days to find a new home, and another 30 days to
close the escrow on your old place once it's sold. You may also
be able to work out a "rent-back" with the buyer of your home, which
means that you could close escrow in 45 days, and then maybe "rent
back" your home for another 15 days...still giving you 60 days to stay
in the house...there are options for you!!
#3 Find Your
"Wants" vs. "Needs" In Your New Home
Before house hunting, make a list of things you want vs. the things
you need in the new place. Then make a list of the things you don't
want. You can use this list as a scorecard 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 "skin and bones". The bones are
things that cannot be changed such as the location, view, size of lot,
noise in the area, school district, and floor plan. The skin
represents easily changed surface finishes like carpet, wall paper,
color, and window coverings. Buy the house with good bones,
because the skin 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
Don't Be Pushed Into Buying Just Any House
I can 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. We can go to the Multiple Listing
computer together to make sure that you are getting a
complete list. The past few years, homes were selling quickly, usually
a few days after listing. In that kind of market, agents advised
their clients to make an offer instantly if they liked the
house. That was good advice at the time. When markets are
"hot" or "sellers markets" you have to do that sometimes. I can
advise you as to "what type of market" you are in when you make an
offer. 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 visiting my website at:
Stop Calling On Homes You See In Ads, On The
A word of caution - agents create ads solely to make the phone ring!
Some homes have drawbacks that are not mentioned in the ad, such
as traffic noise, power lines, or a lot that is undesirable. 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 a Broker 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 your 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, or someone who just called on the phone and said "keep
your eyes open for me"? So to get the best buy on a property,
I always recommend that you hire your own agent, be committed to work
with him and stick with him - you'll get that same commitment back!
If you need additional strategies about buying, please don't
hesitate to email me directly at
firstname.lastname@example.org or call me at: 435-668-7885.
Service to you...is important to me!