I spend a ton of time here yakking about listing homes. But the reality is that I spend nearly 50% of my time with buyers. And in this current market, there are some things that buyers would be wise to think about – in my humble opinion.
First – if you are buying a home, discuss the process with your broker. Best to know beforehand what happens after finding a home that you like. Things happen fast in a sellers market. So ask questions and make sure you know exactly what is about to happen to you. There should be no surprises if your broker is educating you from the outset.
Next – Get pre-approved by a lender or mortgage broker. As an aside – these vendors will tell you that you can afford “X” when it comes time to purchase. What buyers should be doing is deciding what THEY want their monthly payment to be and then back into the price of the homes they should be looking at. I’ve seen people buy a home because they could “afford” it but then they couldn’t take a vacation for the next ten years and I had to give them a copy of the book I wrote titled “100 Great Ways to Fix Top Ramen”. So do the math before you go looking. Now…where was I? Oh…if buyers are pre-approved they can react more quickly when they find a home they want to make an offer on. The buyers mortgage broker or lender will have them get all the necessary paperwork handed-in before they even go looking. It’s a smart move.
And…Don’t Delay! Time is not your friend in a sellers market. So if you find the perfect home don’t go away and think about it for a few days. Murphy’s Law says that 2 more offers will surface while a buyer is chewing on things and now that buyer is in a multiple-offer situation. That is NOT where they want to be.
LOWBALLING: Presenting low offers to get the negotiations started is one of my favorite pastimes. Who pays full-sticker price at the car dealership? However – in a sellers market a lowball offer just gives the seller the incentive to reject the offer or put off responding to the buyer while waiting for a better offer to come in. And now said buyer has left the seller with an unfavorable taste in their mouth and may find themselves in that dreaded multiple-offer situation again. I’m not saying a buyer needs to offer full asking price – but just remember what type of market we are currently dealing with and offer accordingly.
Waiving Inspection Contingencies…nope. It can be tempting in order to make an offer look better but it’s always a bad idea. I’ve been doing this long enough to know that presenting an offer where the buyer says they won’t do a professional inspection is just plain dangerous. Gloria and I even highly recommend hiring a professional home inspector for new construction. We represented a buyer on a new home deal once and the inspector found that the builder had neglected to put any insulation in the attic! That would have been the only house in the neighborhood with no snow on the roof all Winter but…
So…if you are planning on buying a home then hire someone (like me and Gloria) who will hold your hand before the process even begins. Not getting in trouble in the first place is the very best way I know of staying out of trouble. Back soon…