Real Estate Tips: What you need to know before you buy your home
Get qualified and, hopefully, approved before you begin your house hunt. Unless you have cash with which to purchase a property, you have a better shot at success if you can prove that you have the downpayment and loan approval. Verifying capacity is part of a typical contract anyway. If you provide evidence upfront, your offer is more valuable. Put your best foot forward.
There is a difference between “pre-qualified” and pre-approval. In most cases, we can get a written approval from a lender. Pre-qualified means that a loan agent believes that you are qualified. No one has confirmed that, subject to appraisal, the borrower will get the financing.
Once your offer is accepted, you gain power. As long as you stick to the offer, you can walk away anytime before your longest contingency. The seller cannot. In other words, if you have 21 days for inspections, you can change your mind up until then. In fact, you can ask for more time. If there is a logical reason, most sellers will extend the contingency. I don’t advise frivolous offers but, especially in a seller’s market, the balance of power changes upon acceptance.
In my mind, the house that I want to be my home is more important than whether I get the last nickel in negotiation. I guess my experience of owning for almost three decades colors my perception but if I had paid $10,000 more or less, it would make little difference today. Buy what you love, where you want to live for a long time. This is particularly true if you are planning to raise a family there. Memories have value. Stability is underrated. I’ve met too many “shoulda’s” in my time. Don’t regret missing out on a good fit.
I believe in fair. Everyone loves a bargain but no one loves a fight. The best strategy is to be direct and honest. Give it your best shot. Don’t offer more than you are willing to pay, assuming the house passes scrutiny. By the same token, low ball offers are only going to succeed where the property has a broken leg or is otherwise not desirable, and maybe not economically fixable.
In today’s market, materials are very costly. Fixers stop being a value when the cost to fix is great than the price advantage. Same with size. Few need a palace but a larger house can be a great value over a smaller one in a good location. Again, adding on to a house never costs less than estimated.
Most buyers get a physical home inspection. It can be a road map but it may not be the be all and end all. I’ve always liked a specialist, be it plumber, roofer, or electrician to give me an opinion and cost estimate. Key elements of a house are costly. Inspections are a bargain.
Schools are important for resale. Even if you have no kids and no plans to have any, a great school district makes a difference. Private school is expensive. A good public school has a dollar value on top of providing a great environment and education.
Last, don’t be afraid to walk away. It’s your money and your preference. If it doesn’t feel right, keep looking!
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