By Suzanne Grace
Special to Relocation.com
Maybe you've been sitting on the sidelines waiting for the carnage in the real estate world to play itself out. Now you're wondering whether it's time to get back in.
So ... should you?
You don't have to decide now, but there are a few quick things to do right now so you can pounce if you come across that dream home - at a dream price.
Get approved first After you know how much home you can afford, you'll know what to look for. Also, there are a lot of obstacles today in obtaining a loan, so make sure you can get qualified before wasting your time - and breaking your heart!
Meet with a reputable lender You might be surprised, but there are a lot of lenders today who are used to the old way of doing things – they take a glance at your credit report, a look at your income, and then tell you to go find a home.
As a real estate agent, I can't tell you how frustrating this is -- in today's world, there's no longer such a thing as an 'easy loan.'
If you're using a real estate agent, ask for a recommendation, or get one from trusted family member and/or friends. I prefer that my clients have an approval from two different loan officers and banks in the event of a problem.
Know your loan Make sure you review what type of loan you have been approved for and that you understand the home loan and your estimated payments. Online calculators often don't estimate your entire payment, which can cause problems as well. Get it all in writing, and ask if the payment includes taxes as well as insurance.
Meet with an experienced real estate agent! If you're using one, make sure the agent works full-time and has vast knowledge in the area in which you desire to buy. Many times buyers avoid using the services of an agent under the mistaken belief that it costs them money - or that they will be able to negotiate a better deal directly with the seller or seller's agent.
This can be an expensive mistake.
When buying a home, if you are negotiating directly with the seller or seller's agent, you may not be taking advantage of the best deal available. An agent can be committed to helping you buy a home and negotiating for YOUR benefit – and since the agent's fee is usually picked up by the seller, it comes at no cost to you.
An experienced agent can help you avoid the other costly mistakes outlined here, and make your home buying experience an enjoyable, stress-free one.
Use your own agent. Some buyers mistakenly believe that if they work directly with the seller's agent, they will get a better deal. Not so.
It is very important for buyers to know and understand just who the agent is actually working for. The agent may be working as a sub-agent - representing the seller's best interests during negotiations - or as your agent representing your best interests during negotiations.
If you are not sure who your agent is working for, ask. Your agent must fully explain which is which. When negotiations commence, wouldn't you want to know whether information you divulge will be used for the seller's benefit - or yours?
Know what you are buying! Before you make an offer, have a good idea about market value to ensure you do not overpay. Your agent can prepare a Comparative Market Analysis showing what similar homes have recently sold for, and the difference between the asking and selling prices. This is the same type of report the seller receives when deciding on an asking price.
Work with your agent on negotiating the price Many buyers believe the way to achieve a fair price is by offering low. This is the strategy of the buyer who is not in possession of all the facts essential to negotiating the best possible deal.
Many times that type of strategy will polarize negotiations and lead to inflexibility on the part of the seller - or worse, failed negotiations! In a market where foreclosures have 3, 4 and sometimes 10 offers on them, work with your agent in determining your very best price – what I say to my clients is, "At what price are you willing to loose the home"?
You would be stunned to know many buyers lose their dream home over $5,000, which translates to about $20 per month. Remember, an agent with many successfully closed transactions gets paid the same as someone who is inexperienced. That experience could mean a better deal at the negotiating table with a minimum amount of hassles.
Get the home inspected! Buying a home is a major purchase usually made after spending just half an hour looking it. It is definitely worth the cost of an inspection, ensuring you will not be surprised later with deficiencies that could cost you thousands. Your agent can recommend several reputable companies for you to choose from, and ensure the appropriate clause is in the offer/contract.
Know your rights! It is important to understand completely the terms of the purchase agreement. Wrong assumptions, poorly written or missing clauses, and not understanding how the clauses affect the purchase can lead to increased costs or a voided contract. Don't understand something? Just ask! If you can't seem to get the answer you are looking for from the real estate agent, you can also check with the escrow/closing company and/or a real estate attorney.
Wondering about the tax benefits of buying? Check out our blog post on the government's plan to stimulate the housing market.
Your Next Move:
Your First-Time HomeBuyer Guide
Suzanne Grace is a real estate agent in Thousand Oaks, Calif.