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5 Buyer
Secrets 1. Get "Pre-Approved" - Not "Pre-Qualified!" Do
you want to get the best property you can for the least amount of money? Then
make sure you are in the strongest negotiating position possible. Price is only
one element 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! Many
times unknown problems can come to the surface! Some of the problems I've seen
include recorded judgments, alimony 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 the strongest 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 all my clients have in
their 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
sales aren't nearly as strong as one that comes in with a ready, willing and
able buyer. Consider this scenario You've found the perfect house - 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 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 the contingency but it has to be a full price offer! You have now paid more
for the house than you could have because of the contingency, and you have to
sell your existing house in a hurry! Otherwise you lose the 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. 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 anything to your liking, you don't have to sell your present home. 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. You can use this list as a guide 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 "STYLE AND
SUBSTANCE". The SUBSTANCE are things that cannot be changed such as the
location, view, size of lot, noise in the area, school district, 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. 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. 4. Don't Be Pushed Into Any House Your
agent should 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. A decade ago, homes were selling quickly, usually a few days after
listing. In that kind of market, agents advised their clients to make an offer
ON THE SPOT if they liked the house. That was good advice at the time. Today
there isn't always this urgency, unless a home is drastically underpriced, and
you'll know if it is. Don't
forget to check into the 5. Be prepared to act fast! The biggest mistake I see home buyers make is they find something they really like, ask to see other homes, and by the time they decide their first choice was right, the home is gone. In a seller's market, there aren't enough homes to satisfy every homebuyer. Prices are usually sky high because of the low inventory. Homebuyers typically make a fast offer - often for more than the list price - or risk losing the home to a more agile homebuyer. There isn't much room to negotiate in a seller's market unless the property is overpriced. Your agent should show you everything available that meets your requirements. If you see something you like and can afford, buy it. Inexperienced or not, in today's market you must be willing to act fast.
© 2006 WLPP Real Estate Script |