 |
 |
View Every Home For Sale in San Diego County. Absolutely No Obligations. Contact Team Clifton For Further Information Regarding the Sale or Purchase of Your Next Home... |
|
. |
||
| Buying
a Home |
||
It's important
that you choose an experienced agent who is there for you. Your agent
should be actively finding you potential homes, keeping you informed
of the entire process, negotiating furiously on your behalf, and
answering all of your questions with competence and speed.
First, find an agent who represents you and not the seller. This is
beneficial during the negotiation process. If you are working with a
buyer's agent, he or she is required not to tell the seller of your
top choice. In addition, he or she is also focused on getting you the
lowest asking price.
Also, when you use a buyer's agent, you will see more properties. Not
only are they plugged into their Multiple Listing Service, but also
they are actively finding homes that are listed as FSBO, or homes that
sellers are thinking about listing.
Why You Should Not Make Any Major Credit Purchases
Don't go on a
spending spree using credit if you are thinking about buying a home,
or in the process of buying a new home. Your mortgage pre-approval is
subject to a final evaluation of your financial situation.
Every $100 you pay per month on a credit payment could cost your about
$10,000 in home eligibility. For example, a car payment of $300/month
could mean that you qualify for $30,000 less in a mortgage.
Even if you have accumulated enough savings, you should consider not
making any large purchases until after closing. The last thing you
want is to know that you could have purchased a new home had you
curbed the urge to spend.
Getting a Legitimate Lender and Getting Pre-Approved
It used to be
that buyers could go house shopping and when they have found their
dream home, then they go to get pre-approved. However, in today's
market, that has proven to be one of the least effective methods in
landing the dream home.
Most lenders can pre-qualify you for a mortgage over the phone. Based
on general questions about your income, debt, assets, and credit
history, lenders can estimate how much mortgage you qualify for.
However, being pre-qualified and pre-approved are different things.
Pre-approval means that you have applied for a mortgage; you have
filled out the mortgage application, received your credit report, and
verified your employment, assets, etc. When you are pre-approved, you
know exactly what the maximum loan amount will be.
A pre-qualified letter is not verified and in essence, does not count
for much if you are competing with other buyers who are pre-approved.
When you are pre-approved, you and the seller know exactly how much
house you can afford. It gives you credibility as an interested buyer
and lets the seller know immediately that you will qualify for a loan
to buy their property.
In addition to being pre-approved, it's important to be pre-approved
with a legitimate lender. Legitimate lenders include: banks, mortgage
bankers, credit unions, savings and loan associations, mortgage
brokers, and online lenders.
Some lenders to avoid: those who lose a form or misplace a file, those
who gather information from you in an unorganized manner, those who
are not informed about interest rates, points or costs, and those who
cannot provide you with the right information.
The best seller
is one who is highly motivated. A highly motivated seller is more
likely to sell for less than his or her house is worth. And it matters
that you find out why; learning the reason why can help you get the
price you want and help the seller get what they want: a timely sale.
When given the opportunity to meet with sellers, ask them why they are
selling. The reasons could be anything from job change to a new
location to financial problems. If you can solve their problem,
whether it is cash related or time related, do so. For example, if the
sellers are highly motivated because they need to move quickly, give
them a fast sale - and a lower price. If you can make an offer, even a
low one, that gives them cash in a short time, they are more likely to
accept.
There are also some sellers that you should avoid. Not every seller is
as genuinely motivated as they make themselves to be. Some possible
hints:
*they stall on having the home appraised or inspected
*is unable to clear up liens against their property
*does not own 100% of their property
*they push back the move-out date
*does not have a replacement property or back up plan
etc. etc. etc.
It is impossible to find the perfect seller. But it is possible to
find out which sellers are legit, and which ones aren't.
Build a Plan of Action and Get Ready
Buying a home
will probably rank as one of the biggest personal investments one can
make. Being organized and in control will contribute significantly to
getting the best home deal possible with the least amount of stress.
Is important to anticipate the steps required to successfully achieve
your housing goal and to build a plan of action that gets you there.
Before you can build a plan of action, take the time to lay the
groundwork for your decision-making process.
First, ask yourself how much can you afford to pay for a home. If
you're not sure on the price range, find a lender and get preapproved.
Preapproval will let you know how much you can afford so that you can
look for homes in your price range. Getting pre-approved helps you to
alleviate some of the anxieties that come with home buying. You know
exactly what you qualify for and at what rate, you know how large your
monthly mortgage payments will be, and you know how much you will have
for a down payment. Once you are pre-approved, you avoid the
frustration of finding homes that you think are perfect, but are not
in your price range.
Second, ask yourself where you want to live and what is the best
location for you and/or your family. Things to consider:
*convenience for all family members
*proximity to work, school
*crime rate of neighborhood
*local transportation
*types of homes in neighborhood, for example condos, town homes,
co-ops, newly constructed homes etc.
Hot Market -
This is an extremely competitive market, one that is advantageous to
the seller. Sometimes, homes will sell as soon as they are listed or
even before homes are listed. Typically, during a hot market, multiple
offers will be made on each home and more often than not, homes will
sell for more than their asking price. It is even more crucial to be
prepared and to be ready as a buyer when the market is hot. It can be
easy to get caught up in the bid for a home, but if you are prepared
(pre-approved, solid in price range, realistic about your needs), it
is easier to remain focused on your housing needs and price range.
Normal Market -
In a normal market, there is fairly a large number of homes available
and an average number of buyers. This market does not necessarily
favor the buyer or the seller. A seller may not have as many offers on
their home, but he or she may not be desperate to sell either. Again,
it is the buyer's responsibility to be prepared. During a normal
market, the chances to negotiate are higher than in a hot market. As a
buyer, you can expect to make offers at lower than the asking price
and negotiate a price at least somewhat less than what the sellers are
asking.
Cold Market -
In a cold market, houses may be listed for more than a year and the
prices of houses listed may drop considerably. This market is
advantageous to the buyer. As a buyer, you have the time to make an
offer that works to your best interest. It is not uncommon to low-ball
and to find that sellers are accommodating to meet your needs. Keep in
mind that even though this market is a great time for buyers, you do
not want to lose your dream home by being unrealistic. Your goal is to
get the your dream home at the best possible price.
As a buyer, you
are entitled to know exactly what you are getting. Don't take for
granted what you see and what the seller or the listing agent tells
you. A professional home inspection is something you MUST do, whether
you are buying an existing home or a new one. An inspection is an
opportunity to have an expert look closely at the property you are
considering purchasing and getting both an oral and written opinion as
to its condition.
Beforehand, make sure the report will be done by a professional
organization, such as a local trade organization or a national trade
organization such as ASHI (American Society of Home Inspection). Not
only should you never skip an inspection, but also you should go along
with the inspector during inspection. This gives you a chance to ask
questions about the property and get answers that are not biased. In
addition, the oral comments are typically more revealing and detailed
than what you will find on the written report. Once the inspection is
complete, review the inspection report carefully.
You have to demand an inspection when you present your offer. It must
be written in as a contingency; if you do not approve the inspection
report, then you don't buy. Most real estate contracts automatically
provide an inspection contingency.
By asking the
right questions, and knowing exactly what your needs are, you can find
the right loan for you. There are certain approaches that you can take
while mortgage shopping that can cost or save you money.
It is still true that the better qualifications you have, the lower
your interest rate will be. However, there are mortgages available for
almost everyone; it's the interest rates or the down payments that
vary.
Before speaking with a lender, know what monthly dollar amount you
feel comfortable committing to. Then when you discuss mortgage
pre-approval with your lender, it is easier for you to determine the
monthly amount and what value of home the monthly amount translates
into. Do not put yourself in the position where you will be paying
more each month than you intended simply because the "dream"
house requires it.
Do your research on the types of mortgages available to you and find
the one that best suits your needs. There are a number of
considerations to be made in terms of finding the best mortgage for
each individual:
*What type of market are you in? Are the interest rates falling or
rising?
*Do you want a fixed mortgage rate, where you will always know what
your payment is going to be?
*What are your long-term goals? Do you intend to resell the property?
Do you only need the mortgage for a short time?
