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5 SECRETS TO BUYING A HOME
Tips to Buy the Best House for Your Money
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We welcome you to our website for Denver Country Club real estate, Cherry Creek real estate, Washington Park real estate, Hilltop real estate, Bonnie Brae real estate, Cherry Hills real estate and Denver, Colorado real estate. Whether you are buying or selling a home, Contact us today to see how our buyer’s representation services, listing services and investment consulting services can help you.
1. Get "Pre-Approved" - Not "Pre-Qualified!"
If you want to get the best property you can afford for the least amount of
money then make sure you are in the strongest negotiating position
possible. Price is only one element in the negotiations, and not
necessarily the most important one. Often other terms, such as the
strength of the buyer or the length of escrow, are critical to a
seller.
In years past, buyers got "pre-qualified" by a lender. This means that you
spent a few minutes on the phone with a lender who asked you a few questions.
Based on the answers, the lender pronounced you "pre-qualified" and issued
a certificate that you could show to a seller. Today Sellers are aware that such certificates are WORTHLESS, because none of the information has been
verified.
So the way to make the strongest offer today is to get "pre-approved".
This happens AFTER all information has been checked and verified by your lender. You are actually APPROVED for the loan and the only loose end is the
appraisal on the property. This process takes anywhere from a few days
to a few weeks depending on your situation. It's VERY POWERFUL and
we recommend all our clients get Pre-Approved prior to looking for a house.
2. Sell Your Property Before Buying One
If you have a house to sell, sell it before selecting a house to buy!
Contingency sales aren't nearly as strong as one that comes in with a
ready, willing and able buyer. Consider this scenario: You've found
the perfect house - now you have to go make an offer to the seller.
You want the seller to reduce the price and wait until you sell your
house. The seller figures that this is a risky deal, since he might
pass up a buyer who DOESN'T have to sell a house while he's waiting
for you. So he says OK, he'll do the contingency but it has to be a
full price offer! You have now paid more for the house than you
could have because of the contingency, and you have to sell your
existing house in a hurry! Otherwise you lose the house! So to sell
quickly you might take an offer that's lower than if you had more
time. The bottom line is that buying before selling might cost you
THOUSANDS of dollars.
If you're concerned that there is not a house on the market for
you, then go on a window-shopping trip. You can identify possible
houses and locations without falling in love with a specific house.
If you feel confident after that then put your house on the market.
Another tactic is to make the sale "subject to seller finding suitable
housing". Adding this phrase to the listing means that WHEN YOU DO
FIND A BUYER, you will have some time to find the new place. If you
don't find anything to your liking, you don't have to sell your
present home.
3. Know Your Wants and Needs
Before house hunting, make a list of things you want in the new place.
Then make a list of the things you don't want. You can use this list
as a guide to rate each property that you see. The one with the
biggest score wins. This helps avoid confusion and keeps things in
perspective when you're comparing dozens of homes.
When house hunting, keep in mind the difference between "STYLE AND
SUBSTANCE". The SUBSTANCE is the set of things that cannot be changed such as the location, view, size of lot, noise in the area, school district,
and floor plan. The STYLE represents easily changed surface finishes
like carpet, wallpaper, color, and window coverings. Buy the house
with good SUBSTANCE, because the STYLE can always be changed to match
your tastes. We always recommend that you imagine each house as if it
were vacant.
Consider each house on its underlying merits, not the seller's
decorating skills.
4. Do Your Homework...
Your agent should show you everything available that meets your
requirements. Don't make a decision on a house until you feel that
you've seen enough to pick the best one.
A decade ago, homes were selling quickly, usually a few days after
listing. In that kind of market, agents advised their clients to make
an offer ON THE SPOT if they liked the house. That was good advice at
the time. Today there isn't always this urgency, unless a home is
drastically under priced, and you'll know if it is.
Don't forget to check into the SCHOOL DISTRICTS of the area you're
considering. Information is available on every school; such as class
sizes, % of students that go on to college, SAT scores, etc. You can
get this information from this web site.
5. Hire a Reputable Home Inspector
Perhaps the most important person you will hire besides your
realtor is a good home inspector. Your inspector will not only tell
you if the house you want is in good condition,etc. but he will also
tell you how all the systems in the home work. It is imperative that
at least one person who is buying the home is present for the
inspection which will last anywhere from 2-4 or more hours depending
on the size of the home.
The reason why having a good inspector is so critical to you as buyers
is because this is the point at which you can terminate the contract if
you feel the house has more work or problems than you want to take on.
If you choose to terminate the contract, you should expect to get all of
your earnest money returned if you meet your contractual deadlines for doing so.
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Patsy Brown & Dan Eitemiller
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