My recent post 10 Less Obvious Things to Consider When Buying a House was so well received (thanks to all that read it and commented!) that I thought it would be a great to do a companion piece about additional things that buyers can do to facilitate the purchase process.
It is widely accepted that we are in a buyer's market. Being in a Buyer's market does not mean, however, that sellers roll over and play dead. A fair offer with fair terms is likely to be considered and accepted, but too many buyers are living in a world where they are not thinking about how to position themselves so that they can make this type of offer.
To that end, here are some of the ways that a Buyer can facilitate, rather than sabotage, their purchase of a new home:
- Don't reveal too much to the listing agent: everything you say can, and will, be used against you in negotiations. The listing agent does not represent you unless you have established dual agency. Their allegiance, and fiduciary duty is to the seller. Be circumspect in your conversations--even early in the game. Think of it like a card game; don't let the otherside see your cards. It can work against you later in negotiations if they know too much about your financial situation or how much you love the house.
- Get yourself some representation: You may be very good at your job, but unless your job involves buying or selling residential real estate, you should hire someone who specializes in this to look out for your best interests. This is what we do.
- Watch your pocketbook: Make sure that you know your credit situation and that both you and your significant other (if relevant) are on the same page. This is not the time to be buying a new car, or even a new television, on credit. Hold tight to your wallet and keep your eye on the prize!
- Do your soul searching BEFORE you write a contract: A contract is a legally binding document. There are buyer protections, but before you write a contract, be committed to the purchase. It is only fair to all involved.
- Understand yourself: Some people can buy handy-person specials and other people should never even consider them. Know yourself, your strengths and your limitations. Buy accordingly.
- Under all is the land: I remember this from back in the day when my mom sold real estate. It was true then and it is true now. You can change the building, but you can never change the location. That old real estate adage, Location, location, location...is just as true as it ever was!
- Give yourself time: Don't wait until the month before your lease ends to start looking--unless you are very sure you can rent month-to-month. Buying a home should be a thoughtful process, not one rushed by unnecessary deadlines. Ideally, allow your lease to convert to month-to-month or find a friend or relative who would allow you to stay with them, if necessary, while you maneuver the process.
- Be clear on who makes the final decision: Is mom really the one that has to see the house before you write the contract, or will it just make her feel better? If Aunt Jo is helping you with the down payment does that REALLY make her a party to the contract or is she just helping you live out your dream? Writing an offer contingent on a third party can jeopardize the chance that it will be accepted, because your contract is more complicated than another. Understand what is really necessary before you place contingencies in the contract.
- Don't get caught up on the ones that don't work: I once had a client who was looking at homes for his family while the wife remained out of town. After a lot of looking, we put a contract on a home. When he brought her to see it, he said, 'but you should have seen this other one--it was out of our price range--but, it was great.' She put up her hand and said, 'Stop.' She said, 'I don't want to hear about the one we couldn't buy; it is kind of like giving a woman an engagement ring and telling her all about the one you couldn't afford to buy her, thereby ruining the excitement about the one she got. Let's just be happy about the one we are buying!' Very wise advice!
- If you find something you love, be prepared to WRITE AN OFFER: Most Realtors® will tell you that a new buyer will often have to lose a property before they get serious. That makes it very difficult to find your new home. After you lose one, every home you see will remind you of the one you lost. If you are ready to look, you should be ready to write a contract. Sometimes, it really IS the first home you see.
Remember, even in a market that favors the buyers, it is important to be prepared to move quickly and decisively. If you see something you like, be sure that you understand where you stand before writing the contract, and what it will take to get to settlement. Buying a house is rarely as simple and straightforward as you see it on the television real estate shows.
Understanding what you can do to facilitate the process will help you get into the house of your dreams!
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