Powerful Buying Strategies

 

Don't Get Pre-Qualified!  Get Pre-Approved!

Do you want to get the best house you can for the least amount of money?  Then make sure you are in the strongest negotiating position possible.  Price is only one bargaining chip in the negotiations, and not necessarily the most important one.  Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller. In years past, it was always recommended that buyers get "pre-qualified" by a lender.  This means that you spend a few minutes on the phone with a lender who asks you a few questions.  Based on the answers, the lender pronounces you "pre-qualified" and issues a certificate that you can show to a seller.  Today, sellers are aware that such certificates are worthless, and here's why:  None of the information has been verified! Many times, unknown problems surface like recorded judgments, child support payments due, inaccurate and accurate glitches on the credit report, down payments that have not been in the customer's bank account long enough, etc.  So the way to make a strong offer now is to get ´´pre-approved."  This happens after all information has been checked and verified.  You are actually APPROVED for the loan and the only loose end is the appraisal on the property.  This process takes anywhere from a few days to a few weeks depending on your situation, however it's very powerful weapon for you to have in your negotiating arsenal.

Sell First, Then Buy

If you have a house to sell, sell it before selecting a house to buy.  Contingent sales haven't been very successful in recent years, unless it´s with a new home builder who has other houses to sell and can afford to put one on a contingency. Let´s pretend that we go out looking for your perfect house.  We find it and you love it!  Now you have to go make an offer to the sellers, and you want the sellers to reduce the price and wait until you sell your house.  The sellers figures that´s a risky deal, since they might pass up a buyer who doesn't have to sell a house while he´s waiting for you.  So they says "okay," they'll do the contingency but it has to be a full price offer!  So you see, you tend to pay more for the house than you could have because of the contingency.  Also, you now you have to sell your existing house, and in a hurry!  Otherwise, you lose the dream house!  So to sell quickly you may have to take an offer that´s lower than if you had more time. The bottom line is that buying before selling might cost you tens of thousands of dollars.  It's usually a good idea to sell first, then buy.  If you're concerned that there may not be a house on the market for you when you're ready, then go on a window shopping trip. You can identify possible houses and locations without falling in love with a specific house. If you feel confident after that then put your house on the market. Another tactic is to make the sale of your house "subject to seller finding suitable housing." Adding this phrase to the listing means that when you do find a buyer, you will have some time to find the new place.  If you don´t find anything to your liking, then you don´t have to sell your present home.

Play the Game of Nines - Skin and Bones

Before house hunting, make a list of nine things you want in the new place.  Then make a list of the nine things you don´t want.  You can use this list as a scorecard to rate each property that you see, and the one with the biggest score wins!   This helps avoid confusion and keeps things in perspective when you´re comparing dozens of homes.  When house hunting, keep in mind the difference between ´"skin" and "bones."  The "bones" are things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan.  The "skin" represents easily changed surface finishes like carpet, wallpaper, color, and window coverings.  Buy the house with good "bones," because the "skin" can always be changed to match your tastes.  Always imagine each house as if it were vacant.  Consider each house on its underlying merits, not the seller's decorating skills.

Stop Calling Ads!

Reality - agents create ads solely to make the phone ring!  Many of the homes have some drawback that's not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What's not mentioned in the ad is usually more important than what is.  Remember that the person writing the ad is representing the seller and not you!   The most important thing you can do is having someone on your side looking out for your best interests.  Your own agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about.  So whether you decide to work with me or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer's broker.  Then you become a client with all the rights, benefits, and privileges created by this agency relationship, and you're no longer just a shopper. Did you know that many homes are sold without a sign ever going up or an ad ever being put in the paper?  These "great deals" go to those people who are committed to working with one agent.  When an agent hears of a great buy, who do you think they're going to call?  The client, who they have a legal obligation to work hard for, or someone who just called on the phone and said "keep your eyes open?"  To get the best buy on a property, always get your own agent and stick with them.