5 Tips for Home Buyers When Negotiating

Don’t wait to counter-offer

Responding to counter-offers is important. This is an opportunity for you to either make or break the purchase of a home. And, I’m assuming if you have made an offer on a home you really want it. By not jumping on the counter-offer you are allowing other buyers the opportunity to sneak in with a better offer, or any offer at all that the current home owner is willing to take.

You should also consider your counter-offer carefully before making it. Willing you be willing to go higher if certain criteria is met, such as repairs, or inspections. Having a contingency plan based on expected offers from the seller is good to have in your back pocket so you can respond quickly with an offer you are comfortable with.

Talk to your agent

You should always remember your real estate agent when you are making an offer. Whether you have bought one home, or multiple, it is likely your agent has been through this process many times more than you and can make good recommendations on what they think the house will sell for as well as reasonable contingencies.

In addition, your agent can approach the seller with any questions you have before making an offer, or in regards to a counter offer.

Try to get the scoop on the seller

While not always possible, you may be able to find out information on the seller that is useful in making your offer. The situation of a seller can work to your favor. For example, if a seller is motivated to sell because he or she has been transferred to another city for work. Or, perhaps the house has been on the market for several months and the seller has already purchased a new home. Both of these situations may suggest that the offer can lean in your favor. That is if you are the only offer on the table.

The same goes the other way. If the seller is contemplating renting out their home if they don’t get the offer they want. Perhaps, the home is a hot commodity, or only been on the market a short period of time. Maybe the seller simply isn’t in a hurry to move until they receive the offer they are looking for. Any of these circumstances may put the negotiation on the seller’s terms. However, you may be able to find better footing by leveraging a little compromise.

Review what you can afford

For many buyers who have been looking at homes at several hundred thousand dollars, it can be easy to think that upping your offer by $10,000 or $20,000 isn’t that big of a deal. Yet, be careful. It is always a good idea to run the numbers through your mortgage professional. Sometimes a higher offer may not affect your monthly payments, but you may also be surprised at how much the interest, taxes, and insurance can tack on.

When you talk to your mortgage professional, it is a good idea to have them run your monthly payments through several price offers, so you know what to expect, if you have to make a decision between a higher counter-offer and a lower one. 

Consider writing a personal letter to the seller

Don’t ever underestimate the power of the pen. You need to remember that to most people their home is an extension of who they are. People want to know their home will be left with another good family, and people who will care for what is essentially part of their self.

By writing a letter to the seller on why you want the home, noting specific features, and how much it will mean to you and your family to have the home you may just give yourself an edge. When you provide a personal letter, possibly even photos of your family (and don’t forget the dog) you are putting a face to a name, and taking yourself outside the bounds of simply being another number.

The Fair Housing Act – What Your Real Estate Agent Can and Cannot tell you

Have you ever asked your real estate agent specific questions about a neighborhood, or perhaps asked which neighborhood is better, only to be met with an awkward glance before you were directed to go to the community’s website?

There is a very good reason your real estate agent didn’t answer your questions, and it isn’t because they were being rude, or didn’t know. The reason your real estate agent didn’t answer your questions and won’t answer them is because of the Fair Housing Act. The Fair Housing Act was put in place to prevent “steering” of home buyers to certain areas and neighborhoods.

All real estate agents will be well-versed in what steering is, ad all real estate agents should take the Fair Housing Act very seriously.

What your agent cannot tell you

While many people think steering is solely directed at race, there are many more protected classes involved, and agents should be forthright in saying what they cannot advise you on. Whether the information would be based on opinion of factual data, it is up to the home-buyer to seek out the information on their own. An agent cannot inform, advise, or suggest to you on any of the following:

• Race
• Color
• National Origin
• Religious Preference
• Sex
• Familial Status
• Handicaps

In addition, and subject material which can allude to or possibly broach on the subject should be avoided. This would include almost any demographics available. The agent will also not provide information on preference of areas or neighborhoods. 

What your agent can tell you

The laws are in place to ensure that all home buyers have the ability to make a reasonable and conscious decision, without the bias of a third-party swaying them in any direction. Most subjective questions will not be answered by your agent. However, a good agent is not only fully aware of their limitations, but will have done their own homework and can provide you with links, information, and suggestions on where you can find out the statistics yourself.

Remember that buying a home is a collaborative relationship between you and your real estate agent. The agent is responsible to help find a home that fits your basic house criteria, and arrange to view the home as well as purchase the home. However, they cannot offer advice or suggestions that could lead to steering you to, or away from a home or neighborhood. 

How You Know You're Ready to Buy Your First Home

Let’s face it. We all think we are ready to buy our first home well before we are. Along with the years of preparation and financial preparedness, few people realize the time-commitment and emotional toll purchasing a home can take on you.

Now, I don’t want to scare you out of buying a home. In fact, that would be pretty counteractive to what I do for a living. However, I do want you to know that feelings of excitement, along with concern and frustration are natural, and happen to most home buyers.

I think the biggest question most people face when buying their first home is, how do I know when I am ready to buy a home?

It’s a legitimate question, and one which most people should ask their selves. Luckily, there are some indicators that you are both financially and emotionally ready to purchase a home.

You’re financially prepared:

This is a big one! You need to be financially prepared to purchase a home. Your lender will be looking at three types of your finances.

·         Your income vs. expenses: Can you afford, and pay back the loan?

·         Credit worthiness: Do you have credit, and if you do, do you pay your bills on time?

·         Down payment: Down payment is variable depending on your lender and type of loan, but you will likely need some money down.

If you are someone who still manages your check ledger, or is on top of your finances daily, then you are likely in a good position to begin looking for a home.

You actually want to settle down:

If you have been dreaming about staying in one place for a long time, as in years, then you are probably in the right mind set to own a home. Unless you are flipping a home for profit, you really want to have the finesse to stay for a while. Owning a home isn’t as simple as waiting for the lease to end before you move. So, if you are ready to settle in, then good for you. You might have a home in your future.

You really, really love DIY:

Whether you are looking for an older home, or a newer one, at some point you will have to fix or replace something in your home. So, if you love DIY projects, you are simply in a better position to handle some of the problems that might occur, whether the problem is a leaky faucet, or a burst pipe.

You are patiently ready:

Many people who want to buy a home are ready to jump and do everything at once. However, the smart home buyer realizes that shopping for a home is as much a commitment as signing the paperwork to buy the home. You need to have the ability to choose a home that works for you and understand the importance of not buying, just to buy. Rather you want to buy what fits for you.

It’s a buyers’ market:

While this is not a steadfast rule, you would be wise to manage patience and wait to purchase until you are in a buyers’ market. This simply means a market that is currently saturated with homes for sale, giving the buyer more flexibility in their bids, and available homes. Depending on where you are looking a buyers’ market could be seasonal, or may be only influenced by the economy.