When you are trying to buy a house in a competitive market, your offer to purchase should contain as few conditions as possible. An offer that is conditional on obtaining financing is often a deal killer. The seller may accept a competing offer for less money rather than take the risk that you won’t be able to raise mortgage money. A pre-approval letter from your lender tells the seller you are ready and able to commit.
When you act on emotion, rather than reason, you may end up paying too much money. This can happen when you fall in love with a particular house and start fantasizing about how great it will be to live there. Another reason you may be driven to pay too much is that a bidding war triggers your competitive instincts and you must buy the house at all costs – which you will regret later.
You’ve put together a down payment. Be aware that there is also a long list of expenses you may have to pay at closing, depending on where you live and who your lender is. Closing costs can add up to between two and six percent of your loan, so ask your lender to give you a Good Faith Estimate of the loan-related fees you’ll have to pay. Get your real estate agent to compile a list of other expenses.
If possible, avoid a situation where you’ve got to camp out with relatives or find a short-term rental because you must vacate your old house or apartment before you can move into your new digs. Moving once is enough.
The first really cold day you spend in your new house is way too late to find out that the furnace doesn’t work. The one condition you should always include in an offer to purchase is a home inspection. Find out how much it will cost to fix any defects and have the seller fix them before you agree to buy or deduct the estimated cost from the final price you offer. If the seller won’t help bear the costs, and you want to go ahead with the purchase, make sure you can afford the necessary repairs on top of your mortgage.
This is a very hard thing for sellers to accept. You need to distance yourself from the property. Buyers don’t care how much you paid for your property, how much better your house is than the one that sold next door, or how much you spent on the upgrades (hardwood floors, paint, landscaping, etc).
This will show you recent sales, pending sales, current active listings, and properties that didn’t sell in your area. This is the perfect way to narrow down a realistic price range for your property. Pricing it properly from the start is a must. Most properties get the most showing activity when they are first listed. If you are priced too high, the right buyers won’t see your home. Don’t be fooled by an agent who charms you with promises of an unrealistic selling price. Acquiring the listing of your home at a price outside of your CMA is common practice with many Realtors. Once they have you in an agreement and your property isn’t showing, the agent will simply attempt to persuade you to lower your asking price to what it should have been in the first place.
If you decide to list your property at a value on the high end of your price range, your home will most likely sit on the market for a longer amount of time. If you price on the low end, you give yourself a much better chance of selling quickly.
What does another home have that yours doesn’t? Lot location, home size, and condition of the property will all come into play when buyers are searching for homes. Just like when you bought your home, potential buyers will compare what else is available in a certain price range. If all asking prices were the same, which house would you buy? If the answer is not your own, what can you do to change that?
How long are homes on the market? Are prices going up or down? What time of year is your home going to be on the market? How are interest rates? Is the economy good or bad? Is it a Buyers market or sellers market? Is the local job market growing? These are all questions that will determine how much buyers are willing to pay for homes or condos.
Offering owner financing, home warranties, or flooring allowances are just a few incentives that could be offered to attract buyers. Another is offering to pay closing costs. Many buyers have the credit & income but do not have the initial investment needed to purchase a home. Offering to pay closing costs could attract a number of buyers who otherwise could not afford to get into your home.