Mastering the Buying Process
The sizzling summer selling season of 2005 was an unparalleled sellers’ market. Owners could list a property with a real estate agent or sometimes just stick a “For Sale” sign in the yard and watch the offers flow in. A prospective buyer stood only a slim chance of even viewing a property unless a pre-approval letter was in hand. Multiple bids for the same home yielded inflated prices, and many people bought at unrealistically high levels.
Now the bottom has dropped out of the housing market and the buyer has the leverage. What does that mean to you? Simply stated, there are great deals available, but in order to capitalize on them, you'll need to be well informed and well prepared. You need to become a savvy buyer.
From my vantage point as an Accredited Buyer Representative (ABR®), here are some items on the critical path to success.
-
Get pre-approved by a lender before starting to look for a home. This serves two purpose: (a) you will know how much you are qualified to spend on a property and therefore not waste everyone's time looking at homes that don't fall in your comfort zone; (b) and you will have met the owner's first criterion for considering you a credible buyer. If you already have a preferred lender you can contact to go through the pre-approval process, then get started! If you don't, Tommy Hines of Wells Fargo Home Mortgage can assist you through a no-obligation, painless pre-approval process. There are also two other loan officers on my site's Ready Resources page and either of them would be glad to help you. (If you already have a real estate agent, he/she may help you get pre-approved.)
-
Identify the "must-have" and "would-be-nice-to-have" criteria for the property you hope to buy. Some key descriptors might include: the price range (which might be lowered than the amount for which you're pre-approved), the style of home (rancher, 2-story), any room requirements (4 bedrooms, 2.5 baths, large family room with fireplace), the lot (.5+ wooded acres on cul-de-sac), neighborhood and schools. This gives a starting point for your real estate agent's property searches and, after you see some of these homes, you may very well want to tweak the requirements. You can also conduct a property search yourself to peruse the available homes, and that's a good idea. However, remember that your own real estate agent (called a buyer's agent) will be able to probe behind the scenes to locate properties where you might negotiate more favorable terms than you see in the listings. For instance, factors such as what the owner paid for the property, how long it's been on the market, the seller's situation, and even the identity of the listing agent will give your agent some insights into a possible purchase strategy for you. The buyer's agent may also be able to find some properties that are not yet available to the general public, thereby giving you first choice and an opportunity to negotiate a contract on your terms.
-
Check the neighborhood for registered sex offenders BEFORE you make an offer to purchase a home. This is your personal responsibility, so do it!
-
Carve out a durable purchase agreement that will get you to closing with a minimum of hassle and missteps. For instance, I always recommend that my buyers get their own property inspection and that they also select the termite/moisture inspector and pay for the inspection. This way, should any inspection problems arise after closing, there is absolutely no doubt as to who is culpable for rectifying the situation. Additionally, there are many places in a purchase agreement where concise wording may be required to avoid pitfalls later on. Here, your buyer's agent's experience is indispensible. (By the way, in today's market, most seller are contributing toward the buyer's closing costs and that can save you thousands of dollars. Write it into your offer! You might also ask for a home protection plan to be paid for by the seller.)
-
Select your lender wisely and get your financial records to him/her rapidly. This is a pivotal decision for you, as many contracts that fall apart do so because the buyer's loan does not go through -- sometimes at the last minute before a scheduled closing. Your loan officer is the person who will help you select the type of loan that's best for you and will oversee the steps needed to get your loan fully approved. The team supporting the loan officer is responsible for the processing of all the detailed paperwork that will make sure the money is ready at closing. Your real estate agent can provide counsel on selecting a reputable, proved lender.
-
Prepare for the closing. You must have homeowner's insurance in place before you can close. Any repairs agreed to as a result of the inspections should also be completed and approved before closing. You should also have your utilities turned on in your name the day of closing, your mail forwarded, etc. In Virginia, the home becomes your property upon closing and you can move in that very day. I've provided a check list for you on the web site page entitled "Managing the Move".
Buying a home is one of the major purchase decisions of your life and I want to help make your buying jouney rewarding and as hassle free as possible. If you'd like additional information, here’s the buying process as described on the official site of the National Association of REALTORS® and, for an overview of buying tips, please download the buyers' report below.
You can also sign up to receive email updates of all the new listings that meet your search criteria. Just let me know if you are interested in previewing any of the homes you find through my website, and I'd be delighted to arrange a showing.
By the way, if you need a turbo-charged real estate agent to sell your current home that is located someplace other than Hampton Roads, let me know. I can provide a referral to a high performing realtor who specializes in your neighborhood.
|