|
| |
5
Powerful Buying Strategies
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! 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 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! I haven't seen a contingent sale work in the last 3 years, unless its
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 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. So he says OK, 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 TENS OF 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 anything to your liking, you don't have to sell your present home.
Play the Game of Nines
Before house hunting, make a list of nine things you want in the
new place. Then make a list of the nine things you don't want. I
call this "NINE OF THIS AND 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 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, 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 merits, not the seller's decorating
skills.
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. Go to the Multiple Listing computer with
your agent to make sure that you are getting a COMPLETE list. In the late
1980's, homes were selling quickly, 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 under priced, and you'll know
if it is. Don't forget to check into the SCHOOL DISTRICTS of the area
you're considering. Information is available on every school; such as
class size, percent of students that go on to college, SAT scores, etc. You can
get this information from your agent, directly from the school, or this website.
Stop Calling Ads!
A word of caution - agents create ads solely to make the phone
ring! Many of the homes have some drawback that's not mentioned in the ad,
such as traffic noise, power lines, or litigation in the community. What's
not mentioned in the ad is usually more important that 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 an agent
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 an 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"? So to get the best buy on a property, I always
recommend that you hire your own agent and stick with him.
Back To Buyers Info
|
