1) Don't Get "Pre-Qualified" Get "Pre-Approved" Do you want to get the best house you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one of many bargaining chips, 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, we always recommended that buyers get "pre-qualified" by a lender. This means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you pre-qualified and issues a certificate that you can show to a seller. Sellers are aware that such certificates are wothless, and here's why; None of the information has been verified. Unknown problems can surface, for example: recorded judgments, child support payments due, glitches on the credit report (could be accurate or inaccurate), down payment funds that have not been in the clients' bank account long enough, etc. The best way to make a strong offer today is to get pre-approved. This happens after all information has been checked and verified. 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 minutes to a few weeks depending on your situation. It's very powerful and a weapon we recommend all of our clients have in their negotiating arsenal.
2) Sell First, Then Buy If you have a house to sell, sell it before shopping for a new home. Let's pretend that we go out looking for the perfect house for you. We find it and you love it. 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's 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 might have due to the contingency. Now you have to sell your existing house, and in a hurry if you don't want to lose the dream house. To sell quickly you might take an offer that's lower than if you were not in a hurry. The bottom line is that buying before selling might cost you many thousands of dollars. We always recommend that you sell first, then buy. If you're concerned that there is not a house on the market for you, 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 you can put your house on the market.
3) Play the Game of Nines Before house hunting, make a list of nine things you want in the new place. Then make a list of the nine things you don't want. You can use this list as a scorecard 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 skin and bones. The bones are things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan. The skin represents easily changed surface finishes like carpet, wallpaper, color, and window coverings. Buy the house with good bones, because the skin 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) Don't Be Pushed Into Any House 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. Review the Multiple Listing printout with your agent to make sure that you are getting a complete list. In many instances, homes are selling within a few days of entering the marketplace. In this kind of market, agents sometimes advise their clients to make an offer immediately if they like the house. Whether or not you make a quick offer, you should always have seen enough properties tomake you comfortable with the market values in the areas in which you're shopping. If you have kids, don't forget to check into school districts. Information is available on every school such as class sizes, % of students that go on to college, SAT scores, etc. Check the Tools section of buyandsllseattle.com for links to this information.
5) Stop Calling Ads A word of caution and truth - agents create ads solely to make the phone ring. Many of the homes have some negative that's not mentioned in the ad. What's not mentioned in the ad is usually more important than what is. For this reason, be very careful when reading ads. Remember that the person writing the ad is representing the seller and not you. The most important thing you can do is have someone on your side looking out for your best interests. Your own agent will critique the property with an eye to how well it meets your needs and will point out any drawbacks you should know about. So whether you decide to work with us or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer's broker. Then you become a client with all the rights, benefits, and privileges created by this agency relationship, and you're no longer just a shopper. Did you know that many homes are sold without an ad ever being placed? These great deals go to those people who are committed to working with one agent. When an agent hears of a terrific home at the right price, who do you think he's going to call? His client, who he has a legal obligation to work hard for, or someone who just called on the phone and said "keep your eyes open"? So, to get the best buy on a property, we recommend that you find a consultant you trust, let him or her help you, and stick with them.
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