20 Cold Hard Facts in Real Estate Home Buying
This article is second in a series on the 20 Cold Hard Facts in Real Estate. As you may recall, my first article covered the cold, hard facts in Home Selling and today’s article covers Home Buying. Knowing the honest truth prior to buying a home will ensure that your home buying experience will result in you buying the home just right for you, while keeping stress to a minimum.
Like the Home Seller article, this article won’t be for the faint of heart either, as we’re being brutally honest. Honesty will always be the best policy.
What are the 20 cold, hard, facts in Real Estate Home Buying?
The world we live in is not getting any kinder – I must know your identity before we ever look at the first home. This lets me know who you are, that your intentions are to buy a home, that you’re serious about buying a home and it provides me and my family with some peace of mind knowing that that my safety will not be compromised. Be prepared to provide your identification up front.
You must be Pre Approved – A critical first step. As a Buyer, you need to know how much home you can afford to buy to secure a mortgage. This requires a Lender’s review of your credit, assets and income. This is not a casual conversation with your Lender about what you think your credit is and how much money you make. The Lender must have their own eyes on what you verbalize.
Don’t expect to look at homes until you’ve been Pre Approved – As #1 discusses, this results in eliminating possible future disappointment for two reasons; looking at homes priced higher than what you can afford and losing the home you love because the Seller required Pre Approvals with all Buyer’s offers to purchase and you didn’t have it completed prior to your home search.
Nothing is worse than having candy dangled in front of you only to later realize
it’s out of reach and never can be yours. You would have looked at
beautiful homes that were out of your price range and then you would have to adjust to
look at homes priced lower, that will have features that are less than what you
adore. In addition, Sellers that require Pre Approval with any Buyer’s offers, can
mean you have to go back to your Lender to get Pre Approved when in the
meantime another Buyer came prepared, submitted an offer and the Seller
accepted the offer; meaning you lost the home you wanted to buy.
Make sure to get your ducks in a row – You must plan for buying a home. Buying a home is a major life event that requires planning. Have you maintained your credit to qualify? Have you saved enough money for a down payment, closing costs and home maintenance after you own the home? Have you considered the area you want to move to for such things as the schools? Have you planned for the actual move and what it entails? All examples of what must be part of your home buying plan.
Know that your money will only buy so much – Look at homes priced at what your money can buy. Don’t think you’ll look at homes priced above what you can afford and you’ll try to submit a lowball offer to see if it sticks. More often than not, a Seller will reject such an offer, unless of course, there are circumstances about the home that your skilled Real Estate Agent can advise you about.
The local Real Estate market must be known – What prices are homes being sold for, how fast are homes selling, what’s the inventory level, what type of market is it, where is the market headed and what benefits/disadvantages does a city hold are all important to know about the local market where you want to buy a home. Make sure your Realtor knows their local market.
Don’t make any major purchases while buying a home – You just signed a contract for your new home and you just noticed that both IKEA and Ethan Allen have home furnishing sales. Great, you thought – let’s go shopping! Hold on. Any major purchase can halt your loan approval in its tracks. No buying of furniture, cars or the like until AFTER you closed on your new home purchase.
You too, will need to be harmonious to get the home you want – This same advice is provided to home Sellers and the same advice is for you too, as a home Buyer. When you have to come to a mutual agreement when one party is selling and the other party is buying, it’s going to require some give and take from both parties. It’s not the time to dig in your heels all the way on all the items. Harmony can go a long way in getting you the home you’ll love to live in. Don’t risk living in the home you love over little things. Dig your heels in after you buy your home, if that’s your way.
Don’t think a Seller will be tickled pink with your low ball offer – Know your local market. Low ball offers could possibly make more sense when you, as the Buyer, hold the cards as is common in a Buyer’s market. However, even in a Buyer’s market, the Seller can balk at a low ball offer. A Buyer’s market is when there’s an abundance of homes for sale and Sellers are competing to secure the scarcity of Buyers buying homes. The reverse holds true in a Seller’s market. Low ball offers can risk you owning the home you truly want by making the Seller hopping mad. Talk with your hired Realtor to make sure it makes some kind of sense.
Don’t risk the home you love, over a little bit of money – Expect negotiations in a home sale. Do you really want to get down to bickering over $1000 or so dollars and then refuse to let anyone change your mind?! Is it that important for a simple matter of principle? Take a step back and re-evaluate what the home has to offer and could you find it easily elsewhere for a $1000 or so less? Set aside emotions and look at the true picture. And as always, listen to the Realtor you hired to advise you. They should have valuable insight to guide you.
Expect the home will have needed repairs – I’ve yet to see a home that doesn’t have a dozen or more things that need addressing. Don’t fret over the little things. Be more concerned about any major needed repairs and how they can be resolved. Expect that the Seller will not issue you a credit for all of the repairs the Inspector notes. There will always be a number of issues and sitting down to tally up all the estimated costs with an expectation that the Seller will either issue you a credit for all the needed repairs is not realistic. Asking for a Seller contribution is fair, however.
Sellers present at showings are diamonds in the rough – Even though you likely prefer Sellers not to be present when you come to take a look at their home, if they insist on being present, then it’s a great time to see your Realtor in action digging for clues that can possibly get you a reduced price.
Many Sellers can have a soft heart – If you find a home that is just perfect for you and your family, let the Seller know! Many Sellers have raised their family in the home you want to buy and would love the thought of another family continuing a family tradition. Or if you’re single, let them know why the home is just right for you. Perhaps, you’re furthering your career and are just beginning to invest in Real Estate; a young entrepreneurial spirit is admirable. How do you let them know, you ask? Simply put, in a letter presented with your offer.
A well maintained home will demand more money from you – Do you love that home that you just looked at and want to buy? It was obvious how well cared for the home was as everything was orderly, neat and clean; just the home for you! This will not be the home you’ll likely get at a discount. These type of homes draw prospective Buyers like bees to honey. Prepare your offer to be attractive, because if you don’t there’s another Buyer standing in the wing ready to offer for this pristine, prize home.
The Real Estate contract deadlines matter – Your Realtor should be well aware of contractual deadlines to make sure you’re aware of them. Or if you’re using an Attorney, they’ll advise you the same. Contractual deadlines are legal time periods in which you need to provide a condition, as per the contract. Mess with the deadlines and missing them can jeopardize the home sale along with your escrow deposit. Make sure you follow them and that the Realtor you hire advises accordingly. This is not an attempt to provide legal advice as only an Attorney can provide such advice.
Practice the skill of visualization – See beyond the clutter and purple painted walls to buy a home the other Buyer can’t envision. Walls can be painted. You need to have vision. It’s all about seeing beyond the ghastly painted wall and clutter to be able to put it all into a visual form that you’ll love. Nothing a bit of paint and cleaning can’t do to fix, which is easy on the pocketbook.
Letting a Seller stay beyond the closing date is risky – It doesn’t have to be risky and it may not be the norm, but do you really want to take the risk of the Seller causing delays or problems to the home you just bought? Make it simple and require that they’re prepared to move by day of closing.
Buying a home price at fair market value is a good thing – Real Estate is considered a great investment. You don’t always have to purchase a home 10%-20% below market value for it to be a good thing. Present your best offer after careful review with your Realtor based upon recent, comparable homes sales. If the Seller has hired a top notch Realtor, their home should be priced right and will likely draw many eligible prospective Buyers.
Cash can sometimes be King – I know, you hate to hear that when you’re financing your home purchase, however it ‘s true. The best way to deal with it when you find a home you love is to present your best offer as touched on in #18, let the Seller know how you feel about their home as discussed in #13, make sure you got #2 covered, make sure all your “t’s” are crossed and “i’s” are dotted, your conditions noted in contract are favorable in the Seller’s eye’s and you then just might have a fighting chance against the Cash King, particularly if they present a low ball offer because they think Cash is King.
A local skilled Realtor is worth their weight in gold – Buying a home is one of life’s most important events. Don’t trust it to just anyone. Do your homework. Choose your Realtor wisely. Are they skilled at selling homes? Try googling their name; what do you find? Or are they a Realtor who relies on a whole lotta hope and keeping their fingers crossed?! Check their reviews from prior customers, which should be plentiful online.
Understand these home buying facts and you’re well on your way to buying a home you’ll love. So remember, before you start that home search looking for homes for sale here in Coral Springs Florida, South Florida or nationwide, you’ll want to study these 20 facts and make sure you’re on board with them. Best of luck in your home search.
To further assist you in your home buying, I’ve included some additional home buying resources below for you to read.
If you found this home buying Real Estate article helpful, please don’t keep it all to yourself but share with others who could benefit in the home buying process. And thank you, if you decide to share!
More helpful home buying resources below:
The Low Ball Offer by Debbie Drummond, Real Estate Agent professional
Buyers and credit building by Karen Highland, Real Estate Agent professional and Blair Warner Credit Consultant Expert
Beating out a Cash Buyer by Bill Gassett, Real Estate Agent professional
Avoiding the Greed Monster by Andrew Fortune, Real Estate Agent professional
Avoid these home buying pitfalls by Inlanta Mortgage and the Mortgage Guys, Mortgage Experts
Winning in multiple offer scenarios by Kyle Hiscock, Real Estate Agent professional
Home Buying guide by Mark Brian, Real Estate Agent professional
Lynn hopes you enjoyed today’s article on “20 Cold, Hard, Facts in Real Estate Home Buying”. You’ll find Lynn selling homes in Southeast Florida in the cities of Coral Springs, Parkland, Margate, Tamarac, Coconut Creek, Boynton Beach, Delray Beach, Boca Raton, Sunrise, Plantation, Ft Lauderdale, Pembroke Pines and Miramar areas within Broward and Palm Beach counties.
Real Estate article written by Lynn Pineda, a licensed Southeast Florida Real Estate Agent for 9 years serving Coral Springs Florida and surrounding Southeast Florida. Keller Williams Coral Springs Realty. October 7, 2014. Real Estate Promises Delivered. You can speak with Lynn by calling her at 954-464-1100 or you can email her at: LynnP@ImagineYourHouse.com if you need to sell or buy your Southeast Florida home. Your local, trusted professional when it’s time to buy or sell your home.
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