The process of buying a home can be an emotional, time-consuming venture even if this is your fourth move. In the end, feeling that you made the right decision and got a good deal can make all the difference.
As with almost all major decisions, the amount of work and research you do before you start shopping can have a dramatic impact on how well you do in the end. Here are some points to consider.
#1 How important is that backyard tennis court?
Everyone can picture their ideal home. You will find that if you don’t thoroughly prepared yourself prior to viewing houses, you will find that ideal home, but you’ll wind up paying too much for it.
It is essential to approach the buying process with a slightly detached manner. Buyers who fall in love with houses usually pay too much.
That’s why you should work hard to develop a list of needs and one of wants. When looking at houses, make sure that the needs are covered – things like sufficient space, good neighborhood, perhaps a garage – and then have fun with items on your wants list. Treating the process in a disciplined manner will help you to make a rational, informed decision.
#2 Get pre-approved
Before shopping stop by your lending institution. Be sure to get your mortgage commitment in writing. Being pre-approved will give you a solid price range, and lets your Realtor® and potential sellers know that you are serious and ready to truly find the right home.
#3 Choose the right people to stand beside you
It’s a complicated process, this home buying process, and many people involved. Having the right people on your side can truly make a big difference. An experienced, dedicated, and knowledgeable Realtor® will offer you choices from a team of advocates, including lenders, lawyers, home inspectors and movers.
The more you share with your Realtor®, the better he or she will be able to represent you and find your ideal home. Let him/her know exactly what you’re looking for, in terms of needs/wants, price range, and location. This can eliminate unnecessary trips to unsuitable homes and will keep everyone focused to help ensure that you wind up in the right home.
#5 Location, location, location
It’s still true. The resale value of your home depends on location more than any other factor. People want a desirable community. One with character, quality schools, access to work, major transportation arteries, shopping, recreational facilities, etc.
While you’re shopping for your home, take a careful look and ask the following questions: How does this home stack up to others in the neighborhood? Are yards fenced? Are there many children playing here? Are the yards and exteriors of the homes properly maintained? The less expensive houses in a better area will appreciate faster than the most expensive houses in a less desirable area.
Some additional factors that affect the property value of a home include traffic, sounds, smells, zoning bylaws, and many others. Try to be objective. Be sure you are completely satisfied with the neighborhood. If the neighborhood has problems, you probably won’t get as much as you hoped when it comes time to sell.
#6 Use your Realtor’s® knowledge
Your Realtor® has trained in all aspects of real estate, including understanding supply and demand, economics, and the neighborhoods of the city in which they practice. A professional Realtor® can do much of the work for you. They will review your needs, review available properties, and make an informed selection of properties to view. A comprehensive knowledge of the available homes in your neighborhood is one of your Realtor’s® strongest assets. With the Multiple Listing Service and other computerized systems, a Realtor® is notified within hours when a home becomes available.
#7 There could be to red flags – Pay attention to them
When evaluating a home, be aware of the difference between acceptable and unacceptable problems. Cosmetic items like peeling paint, worn carpeting, or unattractive wallpaper can be easily remedied. They even make good negotiation items, as there will be costs involved in updating the home.
Major problems, however, are clearly red flags. Potential trouble spots are major foundation cracks, water damage, outdated electrical systems, and inadequate plumbing. These items might be too expensive to remedy, which will make the home a less than worthwhile investment.
#8 Always use a home inspector
A home inspection is an inexpensive way to gain peace of mind, and saves you money in the long run. A proper inspection will cover all areas of the house including foundation, electrical, heating, plumbing, floors, walls, ceilings, attic, roof, siding and trim, porches, patios, decks, garage and drainage. They can give you an objective view of the property, with a written report, indicating the present condition and a summary of items that will need repair.
#9 Be cautious about fixer-uppers
Sometimes, a fixer-upper can be purchased below market value, and can be sold at a significant profit once sufficient repairs are made. However, beware, not all fixer-uppers will bring the price you might expect.
Consumers will often overestimate their level of enthusiasm for doing extensive renovation work, and underestimate the costs associated with such work. A wall that needs to be replaced or moved might lead to the discovery of faulty plumbing, electrical, or worse. Your Realtor® and home inspector are your best allies when it comes to cost-benefit analyses.
#10 What are your future needs
A move is a major undertaking, so take a good look at your current lifestyle and consider the future. Will you need extra space for a home office, a child, or perhaps a child moving back home? Or perhaps you will need less space in the near future? Perhaps it may be easier and less expensive if you purchase a home that can meet those needs now, rather than moving again a few years down the road.
#11 Proceed quickly
When you’re ready to buy, act. Good properties sell. This is especially true given the current buyer’s market.. However, when you work with a Realtor®, you have access to the latest, most inclusive technology. As part of the MLS, a Realtor® has access to properties within hours of when they are listed.
Technology definitely works to your advantage. Many Realtors® now have personalized websites, which allow you to sign on as a client, and receive notification of new listings via email. You save time and effort, you can share with others, and you can view only the homes that come closest to meeting your needs.
#12 Clarify agency relationships
In any real estate transaction be very clear about who is working for whom, and what the relationship represents. Unless otherwise stated, the listing agent represents the seller in transactions for the sale of a home. This agent, as part of his or her fiduciary duty, must ensure that the seller’s (and not your) position is represented. Get a buyer’s agent on your side, or ensure that someone is acting in your best interests. The buyer’s agent has a fiduciary duty to guard your interest.
#13 Get a written CMA
A Comparative Market Analysis (CMA) is an analysis of comparable homes in a given area. It will show you the sale prices of comparable homes in the neighborhood that have already closed, along with asking prices of other homes in the area currently on the market. A Realtor® can compile this report for any home and neighborhood. Ask for this report in writing. You’ll have solid, reliable information about how fairly a home is priced compared to its real market value.
#14 As much as possible, know the seller
Understanding a seller’s motivation for moving could work to your advantage during negotiations. For instance, a seller who has been transferred to another city may be more motivated than someone who is still shopping for a new home. A vacant house, or a house that has been on the market for several months and has been reduced in price, could provide the opportunity for seious negotiations.
#15 Keep it impersonal
Conversely, information about your circumstances could be used to your detriment. Information about your mortgage, size of down payment, move-in deadline, or motives for buying could be used to the seller’s benefit in negotiations. While you want your Realtor® to know these details, maintain your poker face and don’t reveal anything in the presences of the sellers or their agents.
#16 Always measure twice, sign once
While you definitely want to move quickly once you’ve made the decision to purchase, you don’t want to be pressured into a quick close. Someone trying to pressure you into buying a home quickly is most likely doing so for their benefit. Make sure the reasons for you to buy a home are your reasons, not theirs.
#17 Drag out your negotiating skills
Many of us prefer not to haggle, but it’s worth it, especially when it’s your home and one of your biggest investments. Most people expect to haggle over the price. There is always room for negotiation, and your Realtor® should be a professional negotiator.
#18 Try to avoid bidding wars
In some cases, the listing agent may use scare tactics to rush the sale or increase the price. Falling for this line of reasoning could cost you money. If there is another buyer, or some other reason this pressure is being applied, whoever wins also loses because they tend to overpay. Let reason be your guide, try to stay impersonal.
#19 Everything must be in writing
Legally, sellers must disclose all known material defects of a property. These facts will be included in the Property Condition Disclosure – ask for it if the Realtor hasn’t provided it on the MLS. Also be sure to consider the implications of any of these defects. Will they be costly down the road? Are they “serious” defects?
#20 Be aware of hidden costs of home ownership
While first-time buyers are tempted to do rent/mortgage comparisons, there is more to a home than simply the mortgage. You will be responsible for other items including mortgage insurance, appraisal fees, legal fees, inspection fees, transfer taxes, title insurance (varies with the area), property taxes, increased bills, etc. Your Realtor® can give you a good idea of the costs associated with buying a home, so don’t be afraid to ask these questions.
Your Advocate in the Greater Nashville Real Estate Market
We help our clients understand the ever changing real estate market with the goal in mind of making informed, forward thinking choices. Whether you’re ready to buy in the Greater Nashville area or you’re thinking of selling, The Linda Seaton Team is your real estate advocate! Give us a call to discuss your real estate needs or even easier – just drop us a note right here.
The Linda Seaton Team – Your Advocate in a Changing Market
Linda – 615.478.9977