Buying a home … a five part series
Home buying … part one of a five part series
Buying Your First Place: Where Do You Start?
With the deadline now passed for first time buyers to take advantage of the $8,000 federal tax credit, a lot of people are wondering what to do first.
Surveys of recent buyers show that most of them begin by turning on their computer to see what’s out there. But not so fast!
Your Mac or PC is going to play a crucial part in your search for a house or condo, but all of your messing around online is not very productive until you answer one huge question:
And how much can I afford to spend? Oh, and this assumes that you are credit worthy.
While there are a lot of people who will play a crucial part in your search, the two most important are your Realtor® and the loan officer who shepherds your loan through the lenders wads of red tape. And the Internet may not be the best place to find either of these.
I am, of course, biased. I think you should start off finding a good agent, and we’ll talk about how to find a great one in the next installment.
A good agent will begin the relationship by helping you get pre-approved for a mortgage. I give my new clients three names of loan officers I know are terrific. It is not easy for a lender to make it onto my list, and it’s very easy to be removed from it. I know that whichever of these people my buyer chooses will do a great job.
And in a very short time, you will know how much the bank will lend you, how much you will feel comfortable borrowing (usually less than the bank’s number) and any steps you might be able to take to goose up your credit score.
When you start to look at houses or condos before you have a price range established, you can set yourself up for disappointment and delays. The time to find out that your maximum price is $300,000 is not when you are about to make an offer on a $500,000 house.
The very foundation of your search is loan preapproval. Then you’ll be able to begin to discover the options that are available to you.
This is a reblog from a blog shared by a good friend Patricia Kennedy. Feel free to contact us for more information about Patricia.
Home buying … part two of a five part series
Buying Your First Place: Finding The Right Realtor
When you buy your first place, you and your Realtor® will have perhaps one of the most intimate relationships you’ll have during this lifetime that does not involve sex. By the time you’re done, she’ll know pretty much everything about your life. If your finances are funky, she’ll know. If you marriage is in trouble, she might figure it out before you do. She’ll know all about your dreams and needs, and when you behave badly at some point in the transaction (all clients do), she’ll remain your non-judgmental ally.
So choose carefully!
As you set out on your home buying adventure, you are likely to meet more than one agent who might be a good fit. Unless you are starting off with someone you already know and like, interview several before you commit to a buyer broker relationship with one of them.
What to look for? What questions to ask?
The crucial qualifications are honesty, market knowledge, and a commitment to work in your best interest as you go through the buying process. Your agent needs to “get” you.
- Before your first meeting, did the agent give (or email) you any sort of information package explaining who she is and how she works? Was it well-written and attractively presented?
- How much experience do they have, and do they have a particular expertise? And don’t necessarily rule out a smart, energetic newbie – just make certain he’s well supervised. And if the rookie in any way misrepresents his or her experience, run, don’t walk, away.
- How many other clients are they working with? If this agent is a huge producer, he might not spend the time and attention you want. Your best bet is someone doing real business, but more isn’t necessarily better.
- Does she listen? During your first meeting, is the agent talking about herself? Or is she asking the right questions of you and listening carefully to the answers so she’ll be able to figure out what you really are looking for? You should be doing most of the talking and she should be doing most of the listening.
- How does each agent get you information about the inventory? These days, we all have the ability to email updates any listings that meet your criteria.
- Is the agent tech savvy? We’re talking a purse big enough to hold her Smart Phone, digital camera, and the other handly little tools of the trade that will make both of your lives easier.
- And how does she communicate? Does she answer that smart phone when you call or text, or do you find yourself in voicemail?
- Will she screen properties for you and show them to you, or will she expect you to do a lot of the leg work yourself.
Look at your move as a project. Your agent’s job will be to help you design and carry it out. She is your champion – and your fairy godmother (or father). And she should also pass the “fun test”, helping you through the process without driving you nuts.
This is a reblog from a blog shared by a good friend Patricia Kennedy. Feel free to contact us for more information about Patricia.
Home buying … part three of a five part series
Now you know how much you can spend for your new place, and it’s time for your agent to show you where homes in your range are located.
Buying in the DC Metro area can leave you numb with the sheer number of choices. In DC, many first time buyers favor condos, especially if they want to be near downtown where a lot of the fun and action is.
Once you cross the border into Maryland or Virginia, you usually get more space for the money, but then there might be the dreaded rush hour commute.
What makes some neighborhoods more desirable than others?
- A Metro stop: even though the DC Metro system rarely goes where you want to go, it can be good for the morning commute (assuming your office is anywhere close to a Metro station)
- Schools: if they are a factor for you, greatschools.net is a site than many of my buyers swear by. It rates public and many public charter schools.
- Fun: if you can walk to restaurants, movies and other fun activities, it tends to push an area onto buyers’ favorite neighborhoods list.
- Chic: some neighborhoods are fashionable. Others are not. Others still are on the brink of reinventing themselves.
There is a lot of demographic information that your agent can’t give you without running afoul of the Fair Housing laws. She can’t discuss the age, race, sex, religion or even political affiliation (at least not in DC) of your potential neighbors. Of course, you can always ask friends and colleagues who are not Realtors®, or just walk or drive through the various neighborhood and look at the neighbors – even talk to them.
A lot of condo buildings and neighborhood associations even have their own web sites, and you can learn a lot about the character of a place by checking them out – at least if they allow public access.
This is a reblog from a blog shared by a good friend Patricia Kennedy. Feel free to contact us for more information about Patricia.
Home buying … part four of a five part series
With your pre-approval and your Realtor® chosen, it’s time to hit the Internet and then the streets in search of your new place.
There are many web sites out there that allow you to browse through lists of homes and condos that are for sale. Some are sites like Trulia.com or Zillow.com where many, but not all, agents post their listings. Or you can find about a zillion real estate sites that, in return for your name, phone number and email address, will allow you to use their link to the local MLS. You might, however, find yourself bombarded with email from the agent or company after you sign onto their site.
I suggest than my clients do two things.
- I enter their search criterea into my MRIS contacts page and arrange for two updates to be sent to them by email each day, one in the morning and one in the afternoon. This alerts them both to new listings and to older listings that have had some change in the price or terms. The format includes much more information than you could get using any other search mechanism.
- I have them use homesdatabase.com to do their own searches. You may, but do not have to, register to use this site. It allows you to search adding or subtracting criteria as you choose.
When you are looking at the listings, you’ll find that most include a birdseye views of the surroundings on the map that is included. So if the place backs up to a major highway or a junk yard, you’ll be able to know this before you venture out for a real look.
In the DC area, you may find your possibilites are, by numbers alone, pretty daunting.There will usually be some photos of the listing that can help you narrow things down. But as you look over the on-line tours, keep in mind:
- Some listing agents are terrible photographers and can make a fabulous place look awful. Others have good cameras and know what they are doing, or they hire someone who can get a good tour. I wouldn’t rule out a place solely on no or bad tour photos.
- If the photos are taken with a wide-angle lens, the rooms may appear to be a lot bigger than they really are.
- If pictures of the kitchen are omitted, it probably needs to be redone.
Then you let your agent know which ones you want to get into, you’ll have a good possibility list. As you go through each one, remember:
- Some will be beautifully staged while others will be a little cluttered and maybe even smell like the dog. Try to look beyond the mere cosmetics. Good staging can foment a bidding war. With dog smells and clutter, you’re not likely to have a lot of competition.
- There will be some things you can fix, like carnivorous wall paper, a dated kitchen or green shag wall-to-wall. Other things you can’t really fix, like view, location and room arrangement (at least not easily).
- Higher condo fees usually mean lower prices and vice-versa.
- If the only thing standing between you and a place you love is the price, it may be negotiable, especially if it’s been on the market for a while.
In no time at all, one or more of the places you see could be totally perfect! Then it’s on to Part 5!
This is a reblog from a blog shared by a good friend Patricia Kennedy. Feel free to contact us for more information about Patricia.
Home buying … part five of a five part series
When you find “The One”, your Realtor’s® job is to make it happen. This is where a great buyer brokers earn their keep.
The first step is to prepare the paperwork for your offer. In the Washington area, your agent will work with you to put the offer together using boilerplate forms provided by our local board of Realtors®. And as you go through to fill in the blanks, it’s time to kill a tree! Our forms run from about 35 pages on up.
This document will govern the price and terms of your home purchase. And how negotiable the seller might be will depend on a bunch of factors:
- Are you the only offer on the table? If you’re not, a lot of your negotiating power goes down the drain. And even in this market, the good houses that are well-priced are sometimes attracting multiple offers. This is one reason for acting quickly once you find your Dream House, because the longer you wait, the greater the chances are that other buyers will be in there bidding against you.
- How long has it been on the market? It’s usually easier to get sellers to lower their prices if it’s been on for a while. It’s usually hard to get the owners of a brand new listing to take a huge price cut, even though they may have to lower their price even lower than your low ball offer in a few months.
- How does the price compare to recent sales of similar homes in the neighborhood? And I mean recent – not last year or the year before. Last month, maybe. Your agent can prepare a market analysis for you to give you an idea of how it stacks up against the comparables. If the numbers make the list price look high, even if it is a new listing, it’s probably worth trying to make an offer with a price supported by the comps.
- What do you know about the sellers’ motivation to sell? Is it a transfer? Is the house empty? Is it a happy move or a sad one? All of these factors can have an impact on how the sellers will respond to an offer.
- What did they pay for it, and will they have to bring money to the table if it’s worth less than their mortgage balance? There are a lot of sellers clinging to the hope that they can get just enough to pay off the mortgage, without regard to the home’s actual value. This type of seller might just have to sit on their place for a while before they see the light.
Then there are the terms that can make a contract attractive, even it the price isn’t ideal:
- Offer to settle at a time that is most convenient to them.
- Accompany the offer with a large earnest money deposit.
- Keep the offer as “clean” as possible with few contingencies that give you the opportunity to get out of the deal. Those that you do include (home inspection, appraisal, etc.) should be as short as possible so the sellers will know they have a deal within a week or two of signing the offer.
I always call the listing agent to ask what terms the sellers might need. When do they want to settle? Do they need anything like a post settlement occupancy period. Whatever it might be, I try to work their needs into the offer whenever it works for my buyers.
Once your agent delivers the offer to the listing agent and the sellers, they will have three choices:
- They can sign the thing, meaning they have a done (or pretty done) deal.
- They can reject the offer, fail to reply, etc.
- They can make a counter offer.
In this market, I’ve seen offers and counter offers go back and forth a few times before they finally work. You have to stay patient and remember that old bit of negotiating wisdom: if both sides are less than totally happy with the final product, you both got a good deal!
This is a reblog from a blog shared by a good friend Patricia Kennedy. Feel free to contact us for more information about Patricia.
