Tips for Home Buyers

By
Mortgage and Lending

These six tips were put out several years ago when the market favored sellers more than now, but the basic principles are valid. 

 

1. Humanize yourself     In a multi-offer situation, make yours shine brighter than the rest. Consider submitting your bank statement with the offer so the seller sees you have cash and are ready to proceed (cover up your account and Social Security numbers first).  Perhaps write a letter to the seller.  An owner may accept a lower offer simply because the buyer wrote a letter saying: "We are a young family with a child on the way, and would like to raise our family in the house as you raised your family there."  It's not a foolproof strategy, and a lot will depend on the owner's personality.  And remember, don't be rude.  When a buyer disparages the decorating, that buyer is going to lose points with the seller if there are multiple offers.  Often just the tone can be destructive.  Use words like "enhancements" rather than "improvements."

 

2. Drop the contingencies     Don't be the difficult buyer. If there are four offers on a house and yours is contingent on your home selling, it's likely not going to work.  You have to go in there with few conditions.  While you're ridding yourself of encumbrances, position your bid to meet the seller's needs.  Have a home inspector ready to complete the inspection within three days.  And consider the seller's timeline.  "What is the absolute best day for the seller to close?  What other conditions can I eliminate to make this as clean as possible?"

 

3. Get the expert     Find a real estate professional you can count on.  Your family, friends, co-workers, or lender probably could recommend a good agent for you.  Top producers generally are best since they have the most experience, but a relatively new agent can be just as hungry to earn your business and do a great job for you.  Make sure you get along well with the agent in an interview.  If it doesn't feel right, research other people. 

 

4. Cough it up     For the property you can't live without, pay more money.  If $5,000 is standing in the way of making your transaction, just do it, provided the house is competitively priced.  An offer that defies mainstream thinking can be a key to beating out other bidders.  On a house listed at $280,000, offer $281,750.  No one's going to have that kind of a number.  Still, offering a flat-out "I'll beat your best offer" is not the way to go.  You're writing a blank check.

 

5. Pre-approval is all     Get pre-approved for financing.  A good Listing Agent will make it a requirement.  And a GREAT agent will make sure the lender is a local affiliate.  The seller will go with the buyer with the greatest opportunity to go to closing, that's the person with the pre-approved loan, not just pre-qualified.  And don't worry about revealing the figure for which you qualify.  It doesn't mean your offer has to be as high.  Get the pre-approval in writing, and get a copy to your agent, who can confirm it with the lender.  The pre-approval should be specific as to the maximum payment, property type, loan program, expiration date, and conditions that must be met before closing.  And just like you would find an agent you can count on, the same holds true for your lender.  Work with a professional, not just someone with a low rate. 

 

6. Know the market, and thyself     Figure out what you want and be prepared to react quickly.  Decide what your real needs are before you go out: Number of bedrooms, style of the house, location, so you can find what you want and react without delay.  To determine what's available in your market, seek out the Multiple Listing Service in your area, where you can check out what's actively on the market and what the listing prices are.  Also, know all the financial resources available to you.  A parent or family member may help by co-signing or loan or providing gift money.  Current homeowners should evaluate how much equity is available.  

 

 

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Rainer
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Bruce Bourgault, Vice President, Mpro
Central Pacific Homeloans - Honolulu, HI
Hi Randy -- Great post and I gave you a 5! Your point on being pre-approved is so valid.  Make sure the approval is for the home you are making the offer on and not a generic approval.  Makes a huge difference.  Aloha
Jul 31, 2007 04:13 PM #1
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