Lakes Area Living Report

Jan. 29, 2014

Buying a Home #2 - Writing a Strong Offer

A Realtor can tell when a buyer is going to make an offer because the buyer's face lights up as we are seeing a home.  Chances are that you have found “the one” when you start talking about your plans for a house or how you would decorate, and can go beyond simply commenting on the condition of the house.

Once you have found the house that you can see yourself calling home, you will want to make an offer to purchase the house, and this is a job for you and your Realtor.  You will want to sit down with your Realtor and go over the comparable sales in the neighborhood for the past 3-6 months to help determine a fair market sales price for your home.  The trick of writing a strong offer is somewhat of a balancing act when you set your initial price.  You obviously want to be in the neighborhood price range so you aren’t overpaying, but you still have to give some weight to the listed sales price of your particular home because you are about to enter into a negotiation after all, and you won’t want to come in too low so as to upset the seller and start off negotiations on the wrong foot.

In addition to signing all of the agency disclosures, property disclosures, and purchase agreement, and and other addenda, there are a few other very important things to include to make a strong offer.  In order to make yourself look like a strong, qualified, and experienced buyer you will want to make sure that your agent includes your mortgage pre-approval letter to show that you are a qualified buyer for the house.  Second, you will want to make an Earnest Money Deposit (EMD) at the time of your offer too so that the sellers know that you have a serious interest in purchasing their home.  The rates of EMD vary depending on the market, type of offer, and the price of the house.

Once you have everything together your offer is ready to send to the seller’s agent for consideration.  Remember, that your strongest leverage at this point is seeming experienced and together.  Too often agents will let clients send bits and pieces of an offer to the listing agent, and this sends the wrong message to start.

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Jan. 20, 2014

Buying a Home #1 - Getting Pre-Approved

This post is the first formal post in my “Buying A Home” series, but is actually somewhat of a prelude to the entire series.  For more information and tips about beginning your search for a new home please see my post “Not Sure What You Are Looking For?”

This series is written to help serve as a guide for all buyers; especially for first-time homebuyers and those who haven’t made a purchase in a long time.  I hear too often now from potential buyers that they don’t know what the steps are to buy a new home, and it seems like a daunting task, especially when they Google the steps or check out a book store for a guide to buying a home.  The massive number of articles online, and thick books in bookstores can easily make purchasing a home seem like an extremely complicated process.

Purchasing a home can be quite easy though, and over the course of this blog series, I will break the process into a number of simple steps that will make the steps clearer, and more navigable for any buyer.

The absolute first step to buying a new house is to make sure that you qualify for a mortgage, and which type of mortgage is best for your budget.  Purchasing a house is one of the biggest investments of your life, and will almost always include you getting a mortgage to help with your purchase.  An easy way to find a reliable mortgage officer is to ask family and friends.  Chances are that someone you know worked with a mortgage officer that they found very easy to work with.  Put together a list of mortgage officers recommended by friends and family, and call them to ask about their interest rates, and any specials they might be able to offer you, and share with them your plans so they can speak to your needs.

Once you have spoken to a few mortgage officers and feel comfortable working with one, you will want to ask to be pre-approved for a mortgage.  In order to be pre-approved you will need to provide important personal and financial information so your pre-approval can be as accurate as possible.  Each lender has their own pre-approval process, so the details and requirements will vary.

As a part of your pre-approval, the mortgage officer may approve you for the maximum amount possible by default, but you should focus on the monthly payment amount.  To ensure that you are comfortable with the monthly mortgage payment you will want to discuss your ideal payment with the mortgage officer so he or she can find the price range of houses that best match your budget. 

In my experience, there is nothing worse than seeing houses at the top of your price range only to find out that you aren’t comfortable with the associated monthly payment, and having to begin your house search all over again in a lower price range.  Likewise, you want to make sure that you aren’t being so conservative with your monthly payment that it will make it nearly impossible to find a home that matches what you are looking for.

Once you receive your pre-approval letter from the mortgage officer send it to your Realtor and let them know that you are ready to start setting showings to kick-off your search for a new home.

Posted in Uncategorized
Dec. 26, 2013

Not Sure What You Are Looking For?

Are you interested in beginning the search for your dream home, but don't know how to get started?  This is a problem that a lot of potential homebuyers have, and there are some very foolproof ways to make sure that you get exactly what you want.

1. Call a Realtor.  A good Realtor should have a few simple questions that they need to ask you in order to get the ball rolling.  They'll want to know how many bedrooms and bathrooms you want, what area you had in mind, and your price range, amongst other things about the style of the house.  If you can answer at least those three questions the Realtor should be able to find listings to show you.

2. Go on showings.  It doesn't matter if the house on the listing your Realtor sent over doesn't look perfect, I'd advise that you still take a chance and go see it.  Seeing houses, even ones that are the last on your list, gives you the experience of seeing some homes.  You will see what is being offered within your price range, and you'll get to see some new parts of town that might interest you.

3. Keep a notebook.  Whenever you go out on a showing with your Realtor just take everything in, don't worry too much about noting everything about the house.  After you've had a chance to drive home after a showing, pull out a notebook and write down the good and poor aspects of the house you saw.  After a few showings, review your notes and highlight and recurring items, such as PRO: hardwood floors or CON: no basement.  By highlighting these items you are starting to narrow down exactly what you are looking for, and if you share these items with your Realtor then he or she and adjust their searches.

By following these three easy steps, you will eventually find a home that you'll fall in love with, and hopefully not too long after that you'll be unpacking in your new home.

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