| 1.
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Before starting
your search for that perfect house, take time to discuss what
you're looking for with your spouse or partner. Make a list
of "must have" features, and also "would
like, but can live without" features. After you've
looked at a dozen or so properties, re-evaluate your criteria.
Often priorities shift with time.
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| 2.
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Before you
start looking have a realistic idea of how much you can afford
(most lenders will pre-qualify you for free). This important
information will save you time, but also will avoid needless
disappointment later if you find the perfect house you cannot
afford.
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| 3.
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Don't sign
a contract with an agent that locks you into looking with him/her,
or guarantees them a commission even if you find the house yourself!
Specify, instead, that a commission will be paid only if you
buy a property shown to you by that agent. This enables you
to look with others, and also at For-Sale-By-Owner properties,
at your own convenience. Remember buying a house from a FSBO
can save you thousands of dollars. Remember when you hire an
agent to list your house you have to inflate the price to pay
their high commission. Buyers can save a bundle purchasing from
a FSBO.
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| 4.
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If you do
have an agent don't bring him/her with you to look at FSBO properties,
or bring them into the picture when it's time to draw up a contract,
unless you are willing to pay their commission through either
a higher sales price, or out of your own pocket. Otherwise,
you may risk losing the house. (note: your lawyer and banker
can help you if you aren't sure of the process. Don't tell your
agent you are looking at FSBO's, plus never give them the address
of the FSBO you are planning to view, otherwise they will invariably
meet you their. Once they are at the house, they expect their
commission, even though they did nothing to earn it or find
the house for you. You MUST be careful when dealing with an
agent.
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| 5.
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If you find
the house you want to buy before you've sold your home, and
the seller is reluctant to sign a contract with you with the
contingency that you sell your home first, you may draw up a
contract that allows the seller to continue marketing and advertising
the property yet gives you the "first right of refusal"
should they receive another offer. This way you will be notified
immediately if the seller has another offer, giving you an opportunity
to re-offer if necessary. Another option is to put a non-refundable
deposit on the property. This shows the sellers that you are
serious about buying their property.
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| 6.
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If you
sell your house before finding a new home, make sure you specify
a certain amount of time given to you before moving out. You
can make the sales contract contingent upon you, the seller,
finding suitable housing - this sounds good, but often the
buyer is anxious to move into the house and he himself can't
give you all the time you need to look for suitable housing,
this clause can cost you the sale of the house! We have heard
stories of people frantic to find a home under pressure, and
even having to rent after the closing, because they sold first.
Remember, the seller is legally bound to sell once the contract
is signed.
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| 7.
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When presenting
an offer, be courteous and respectful of the seller. In general,
avoid criticizing the property with statements like "we
don't about the extras or the color of the new carpeting, and
therefore will have to replace it." This will not justify
a lower offer and may possibly insult the sellers, decreasing
you chances of their accepting your offer. Always remain on
friendly terms with the sellers while negotiating, it makes
the buying process more enjoyable.
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| 8.
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If you think
the property may be overpriced, yet the seller refuses to take
a lower offer -- make your offer contingent upon the property
appraising for the selling price or higher.
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| 9.
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Request
a walk-through inspection of the house shortly before closing.
It's great if the seller has moved out and the house is empty
this way you can spot faults that were covered up with furniture,
wall coverings, etc. It is far easier to request compensation
for necessary repair work before the house is sold than afterwards.
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| 10.
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Request
that the seller complete a property disclosure form, stating
the condition of all aspects of the property, before you make
an offer. (If the seller doesn't have a form, you can purchase
one at a bookstore or get one off the Internet, or I can supply
you with one at your request - for a small S&H fee, just
send an e-mail). The seller is legally bound to be truthful
in reporting the property's condition.
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| 11.
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Make the
time frame of your offer short (24-48/hours) so the seller has
less time to "shop the bid" among other interested
parties, or to accept another offer. Also, make the deadline
time between 6-8p.m., so you have time left in the evening to
counter-offer if necessary! Many deadline times are at midnight
which makes no sense at all. Most people are asleep by midnight
and don't feel like negotiating contracts.
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| 12.
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Put everything
in writing. Your sales contract should spell out whether
the appliances (washer, dryer, stove, refrigerator, etc.) stay.
If everything is in writing, you will have no surprises and
enjoy the home purchasing experience.
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| 13.
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Buying
directly from the homeowner (FSBO) transaction will SAVE YOU MONEY - the cost of having to pay for the
real estate commission. The 6-7% commission charged by the agent
will often times be added to the total cost of the home. When
this is done, the buyer will end up paying the commission. Buying
a home in a "For Sale By-Owner" transaction
will cost you less money and you'll get more home for your Money.
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| 14.
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When
you deal directly with the homeowner rather than through a third
party you will SAVE TIME.
Communications is more direct, faster and to the point with
only buyer and seller involved. You will get more accomplished
in a shorter length of time which means you can move into your
new home sooner!
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| 15.
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Some
people think purchasing real estate from a FSBO is difficult.
This myth is far from the truth. Purchasing "For Sale
By-Owner" is EASY TO DO! Once you and the homeowner agree upon the
price and your forms are filled out, turn everything over to
a Title Company and they will take care of the rest. This is
the same thing that happens when you use a real estate agent,
except there are no commissions to pay. Your Mortgage Broker
can usually suggest a good Title Company. |
