|5 Secrets to Buying the Best House for Your Money
1. Get "Pre-Approved" - Not "Pre-Qualified!"
Do you want to get the best property you can? Then make sure you are in the strongest negotiating position possible. Price is only one element in the negotiations, and not always 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, realtors have 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! Often, none of the information has been verified!
Many times unknown problems can surface! Some of theses problems include recorded judgments, issues on the credit report that may or may not be accurate, down payments that have not been in the client's bank account long enough, etc.
So the way to make the strongest offer today is to get "pre-approved". This happens after all of your information has been checked and verified. You are actually APPROVED for the loan and usually the only loose end is the appraisal of the property. This process typically takes a few days, depending on your situation. It's VERY POWERFUL and a tool that I recommend all my clients have at their disposal.
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 wait until you sell your house. The seller figures that he will pass up another buyers who don't have to sell a house. If he says OK, to the contingency, he'll likely want a significantly higher price due to the rick that he's taking. 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! 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 could very well 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, and then put your house on the market.
3. Play the Game of Nines
Before house hunting, make a list of things you want in your new home. 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 highest score wins! This helps avoid confusion and keeps things in perspective when you're comparing 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, size of lot, and school district. 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 realtor should show you the available homes that meet your requirements. Don't make a decision on a house until you feel that you've found one that fulfills your requirements, at least the most important ones, and satisfies your needs in looking for a new home in the first place.
5. Stop Calling Ads!
Please note - ads are sometimes created just to grab your attention! Often times, many of the advertized homes have some drawback that's not mentioned in the ad, such as being on a busy road, being located next to rail road tracks, a close proximity to commercial buildings, etc. What's not mentioned in the ad is sometimes more important than what is. For this reason, I want you to be very careful when reading ads.
Did you know that many homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUT IN THE PAPER? These often "great deals" usually go to those people who are committed to working with a realtor. When a realtor hears of a great property that is new to the market, they don't wait for the phone to ring and have someone ask them if there are any new homes on the market. Instead, they call their buyer clients. Typically, their first calls are to clients who have commited to working with the realtor.