5 Essential Things You Need for Home Buying:
1) Find a Home to Buy
Buying a home can be an overwhelming process and emotionally draining. Finding the right home is not always an easy task. I advise buyers to look at a maximum of 7 homes at a time because any more than that will make a buyer’s head spin. Most buyers conduct a lot of research online before ever stepping foot in a home. Buyers spend an average of 6 to 8 weeks, according to the National Association of REALTORS, trying to figure out where they want to live. But once the neighborhood is selected, most buyers end up buying a home after 2 or 3 home tours.
2) Get a Loan
It’s not always necessary to have a mortgage broker or bank in your back pocket before buying a home, but it’s smarter to get loan preapproval in advance. This way you know for certain how much home to buy.
3) Negotiate the Offer
Buyers sometimes make the mistake of comparing the sales price of a home to other homes they have seen. It’s a mistake to compare sales prices among homes for sale. That’s because sellers can ask any price they want. It doesn’t mean the home will sell at that price. An agent can provide comparable sales and examine the pending sales. Comparable sales are similar type homes in the same condition and location that have sold within the past 3 months. Pending sales will become the comparable sales by the time your home closes. You may need to pay over list price in a seller’s market, especially if many buyers are vying for the same inventory. Your agent can give you a reasonable price range and help to manage your expectations. An good buyer’s agent knows there is always more to an offer than its price, but price is paramount.
4) Do a Home Inspection
In some states, a home inspection is conducted before buyers make a purchase offer. In other states, a home inspection is a contract contingency. A contract contingency means a buyer has the right to cancel the contract. You might not want to be locked in to buying a home that has a faulty foundation, for example. Sellers are generally not required to make repairs if problems are discovered during a home inspection. A home inspection is for the buyer’s edification. However, sometimes when a buyer gives a Request for Repair to the seller, rather than blow the deal, the seller will often agree to make a repair.
5) Hire an Agent
Because I am an agent, I believe in hiring a buyer’s agent first. But you don’t have to if you prefer to go to open houses and look through a mumbo jumbo of homes online. Mostly, We will save you time. We can send you listings directly from MLS that fit your parameters, and you won’t waste time looking at active short contingent listings that are under contract. We know of new listings coming up that are not yet on the market. You can waste our gas and not your own when you tour homes. We will preview homes for you and can generally spot overpriced listings and advise you accordingly.
Home Selling in a Market Dominated by Foreclosures and Short Sales!!!
If the house for sale next door to you is a bank-owned home, but all the other homes for sale in the neighborhood are not, you don’t have much of a problem. However, if most of the homes that have recently sold in your area were bank-owned homes and short sales, you have a problem. That problem is you must compete with foreclosures and short sales to sell your home. Your home’s market value is directly related to distressed sales if those short sales and foreclosures dominate the neighborhood.
Prior to the real estate bubble of the mid-2000’s, appraisers would often ignore the distressed sales when appraising a home. Since then, appraisers pay close attention to the number of distressed sales that have closed and those presently for sale. What’s a regular seller with equity supposed to do to compete?
Pricing a Home With Equity Against Foreclosures and Short Sales
Pricing a home is at best a mix of facts, science and emotions. It’s a combination of wearing a seller’s hat and stepping into the buyer’s shoes. Bear in mind that it doesn’t matter much how much you think your home is worth if a buyer disagrees. Try answering these 3 questions:
1) What would make a buyer buy your home over a foreclosure or a short sale?
2) Why would a buyer’s lender appraise your home for more than a foreclosure or short sale?
3) How much more is your home worth than a distressed sale?
You might be surprised at the answers. The truth is your home is not worth a whole lot more than a foreclosure, even if you put in upgrades, if all the recent sales are foreclosures and short sales. Appraisers don’t give a huge allowance for upgrades like they used to do.
Buyers want a good deal. They might buy a home that needs carpeting, for example, if adding the cost of new carpeting still makes that bank-owned home’s price attractive. On the other hand, if your home, with equity, is in tip-top shape and priced within the range of distressed sales, a buyer is much more likely to choose your home.
However, say, a bank-owned home priced at $800,000 needs $50,000 worth of work or improvements. If your home doesn’t need any work, a buyer might offer only $850,000 for your home.
Please let us know if you have any questions!
– Bluxen Team