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 few 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 worthless, and here's why. None of the information has been verified! Often, unknown problems surface! Some of the problems I've seen include recorded judgments, child support payments, accurate and inaccurate glitches on the credit report due to any number of reasons, down payments that have not been in the client's bank account long enough, and many more.
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, the only loose-end is the appraisal on the property you decide to buy. This process takes anywhere from a few days to a few weeks depending on your situation. It's very powerful weapon that I recommend all my clients have in their negotiating arsenal!
Please check with your lender before you buy anything on credit or apply for any credit. In most cases you can buy the same car, furniture, vacation, etc. after you buy your home. However, if you buy it before the close of escrow you may significantly impact your ability to buy your new home.
At today's interest rates, a new monthly debt of $70 could reduce your purchase price by $10,000. A new lease on a car for $350 per month could drop your buying power by $50,000. Depending on your price point, that could be a significant difference in the homes that are available for you.
Applying for credit other than your home loan could take you out of your desired price range or even completely eliminate your chances at a quality loan. Lenders look at how many credit checks you have had in the last 6 to 12 months. More than 2 and you could be in trouble. That includes cell phones and "no payment till anytime" deals.
Refuse offers to increase existing credit lines. Pay off and close accounts with finance companies if possible; they are viewed negatively. Maintain at least one of your oldest cards to show a long credit history.
Before house hunting, make a list of nine things you want in your new home. Then make a list of the nine things you don't want. I call this "nine of this & none of that". 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 many of homes.
When house hunting, keep in mind the difference between "skin & 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, wallpaper, 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 decorating skills.
If you have a house to sell, let me help you sell it before selecting a house to buy! I have seen very few contingent sales work in the last 3 years, unless it's with a new home builder who has other houses to sell and can afford to put one on a contingency.
Let's pretend 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
Now you have to sell your existing house, and in a hurry! Otherwise you lose the dream house! So to sell quickly you might accept an offer that's lower than if you had more time. The bottom line is that buying before selling might cost you tens of thousands of dollars. I always recommend that you sell first, then buy.
If you're concerned that there's not a house out there for you, then let's do a little window-shopping. We 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 your new home. If you don't find anything to your liking, you don't have to sell your present home. This strategy can make your home less desirable to both buyers and Agents because they are not sure when you will find the new home.
Whether you decide to work with me or not, pick an Agent you feel comfortable with and stay with that Agent if he or she is doing the job. Agents work on commission and are paid by the seller, not the buyer! I charge nothing for my time when I work for you. To get 100% effort from me, I have to know that you value and appreciate my work on your behalf. Get your own personal representation by using a Buyers Brokers Agreement.
It is your right to have your own representation when buying a home.
You do not have the same representation when using the sellers Agent
to buy the house. If you see a sign or an ad that interests you, call
me and I can get all the information for you. I can get information for
you on any property you are interested in: homes, condos, new development
homes and condos (contractors require that I accompany you the 1st time
you visit), mobile homes, land, leases, FSBO's (for sale by owner), apartments,
income property, commercial and industrial property.
Welcome to the adventure of buying a home!