* Don't Get "Pre-Qualified!
Do you want to get the best house you can for the least amount of money? If so, 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 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, because 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 accurate and inaccurate, down payments that have not been in the clients' bank account long enough, etc. 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!
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 make an offer to the seller. You want the seller to reduce the price and wait until you sell your house. The seller thinks 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. Even if he says he'll do the contingency, he may insist on a full price offer! You end up paying more for the house than you could have because of the contingency. Now you have to sell your existing house, and in a hurry, or you lose the dream house! In order to sell quickly you might take an offer that is 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, and 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, go ahead and put your house on the market.
* Play the Game of NINES
Before house hunting, make a list of nine things you want in the new place. 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 several homes. When house hunting, keep in mind the difference between "changeables and non-changeables.¿ The non-changeables include location, view, size of lot, noise in the area, school district, and floor plan. Changeables are surface change items like carpet, wallpaper, color, and window coverings. 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.
* Don't Be Pushed Into Any House
Your agent should show you all homes that best suit your needs. You may want to sit at a computer and review the possiblities with your agent. In 2004, homes were selling within hours of being listed. In that kind of market, clients needed 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 under priced or unique to your needs (i.e. city view). If you have children, don't forget to check into the SCHOOLS in the area you're considering. Information is available on every school, such as class sizes, truancy, grading, etc. You can get this information directly from the school or the school district 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 than what is. 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 toward how well it meets your needs and will point out any drawbacks you should know about. 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. 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"? To get the best buy on a property, I always recommend that you hire your own agent and stick with her.
For more information please contact me at susanmorrow@homesvegas.com
