I know I’ve said it before, and I’ll say it again. This is a great time to buy real estate. Interest rates are low, prices are down, and most sellers are willing to negotiate to get the deal done. For what many are paying in rent, they could be building equity in their own home. So, if you have a job and a decent credit score, here are a few tips when you go house shopping:
1. Talk to a mortgage lender at a bank and find out how much house you can comfortably afford. I can give you an idea of what price range you can handle based on how much you can spend per month. However, a mortgage lender can tell you exactly what your payment would be, your interest rate, and what kind of loan would be best for you. A mortgage lender can also pre-qualify you for a loan, so when you find that perfect place, you can present a much stronger offer. When a contract comes in accompanied with a pre-approval letter, the seller knows the buyer is serious.
2. Unless you’re a seasoned pro at investing in real estate, a good Realtor is the best investment you can make. (Besides, the Realtor’s commission is built into the seller’s costs, so it doesn’t cost the buyer anything). A real estate agent will help you find the best areas and neighborhoods, and then zone in on the house or condo specifically for you. While I encourage my clients to actively search for their home; many times, I find the one they end up buying. Finding the home is only the beginning…. A Realtor negotiates the price and conditions of the contract; then walks their client all the through to the closing.
3. When working with a new buyer, I define their home search as much as possible. The more information as my client can tell me about their dream home the better… The parts they aren’t sure about, we can figure out together. Location (along with price) is probably the most important factor. Age of the house, square footage and number of bedrooms, and any special features are all helpful things to know. “I want a home in Brentwood with 4 bedrooms, 3 ½ baths, and an in-ground pool.” That’s a specific house that I can find. Then there is that non-quantifiable factor, when the buyer walks into a house and just knows this is home.
4. When you walk into that house that you want, go ahead and make an offer. So many times, we have found a place that fits their criteria and the buyer absolutely loves, but they let it get away. It might be early in the search process and the buyer felt like they should see more houses before committing. Or, maybe they just drag their feet about filling out a contract. For many, making an offer is a nerve-wracking experience and I understand that. Some buyers (especially first-time home buyers) have to lose out on their first home before they get serious and realize that when they see what they really want, go for it.
5. When you write an offer, (almost) always make it contingent on an inspection. This way, you can get out of the contract if you discover during the inspection process that the house is going to need more repairs than you bargained. Some properties are listed “As Is,” which means the seller is not open to doing any repairs. These properties should already reflect a price reduction built-in and might be a good deal if you are not afraid of doing some work yourself. Most buyers are willing to do a little bit, but they expect a home in excellent condition. Even if a home is in great shape, an inspector will almost always find a list of things that need to be fixed or replaced. The buyer can then ask the seller to make the repairs or provide financial compensation so they can fix them after closing. Sometimes, fixing the problems yourself is the best option since you know you will do the best job possible.
6. Try not to get too personally involved in the negotiation and let the process play out. Sellers are financially, and often emotionally, invested in their house. On the other hand, buyers obviously want the best deal possible. In-between, there are a lot of opportunities for emotions to flair and the deal to derail. This is where agents really pay for themselves. By maintaining a buffer zone, the agents can usually work out a reasonable deal for both parties. In the end, the buyers and sellers are usually extremely happy and relieved that the deal is done.
If you are looking for a new home, I hope you'll consider letting me help you. I can be reached at 615-545-8611 or jefffulmer@comcast.net. Thanks!
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