Posts Tagged ‘Buying Tips’

One pretty obvious reason is that there is less competition than in summer, as some people will put off their hunt, particularly in colder climates.

All this could put you in the driver’s seat if you are a serious shopper. For one thing, with fewer buyers out looking, homes move more slowly so it is a better time to negotiate the asking price down — if someone really needs to sell and not as many people are seeing the house, they might be tempted to accept an offer below their asking price. Not only might they be willing to haggle over price. They also might be more willing to give concessions for paint or carpeting and they may also be more flexible on a closing date.

In winter, lenders are also less busy because they also have fewer people coming to them for home loans. With less on their plate, it is possible to expect that you’ll get more personal attention, as the process moves towards settlement.

Looking at homes in winter is definitely different. But that can be a good thing, too. For one thing, you might notice that a particular house is drafty, which is something you wouldn’t notice if you were looking at the same property in July. Drafts are an indication that the house might need new windows or that there are leaks that will need to be identified and sealed. Be sure to check the thermostat while you are in there. If it is set low and the house is still comfortably warm, it is probably well-insulated, which is a great thing to know. On the flip side, if the thermostat is high and it is not comfortable, that house will probably need insulation and may have exceptionally high heating bills.

On the subject of heating and cooling — one problem that arises in winter is that you won’t know whether the air conditioning system is in perfect working condition when the temperature outside is, well, so cold you won’t be able to test. Make sure to negotiate with the seller to set aside some money in an escrow account for repairs, should you need to do some work. If it does work perfectly, then the escrow attorney can return the money.

Your market might not be affected by weather in the winter months, but if you’re in an area that’s warm and balmy all year round, there are still some solid reasons to think about house hunting in the winter months. One, is the school year: Many families with school-age children often wait late spring or early summer, to start their house hunting. So, shopping now could possibly eliminate that entire array of potential competitors.

That’s also true in an area with a large college complex nearby. Teachers, professors, staff and all sorts of other people connected to the campus might just wait it out over the winter months, so again, if you start actively shopping now, you might avoid that group of competitors as well.

It all comes down to thinking carefully about when you’ll have the biggest advantages as a buyer. And in many parts of the country, the hottest time to house hunt might just be in the middle of winter.

Start by keeping in mind that everyone’s search is going to be different. Some people will find the perfect spot in a few weeks and others may search for months — you can’t plan it perfectly, but you should at least try to be prepared. You should get the ball rolling four to six months before you would like to be in your new home. One of the most important tasks will be getting a REALTOR® to help you with your hunt. Talk to friends and colleagues and get recommendations because a good REALTOR® can make the process go a lot more smoothly; they can help you understand your local market, and can talk you through some of the financial decisions you are about to face.

The mortgage approval process is also something you should start about four to six months in advance. Having a mortgage approval letter in hand can make the bidding process easier. But there is an added benefit to doing this at the very beginning. Going through your documents, talking to a lender and with your REALTOR® will really help you clarify just how much you can really afford. It will also let you know whether there are any dings on your credit report you need to fix that might prevent you from getting the best possible loan. And, you will also learn about the fees that come up at closing.

It is also a good idea to start with a clear picture of just what it is you want. This is particularly important if you are buying with another person or for your family. Discussing your priorities will help you, and your REALTOR®, hone in the types of homes you should be looking at instead of running to see every home in your price range.

Next, you can start looking at homes. This is the fun part, peering into unfamiliar houses and trying to imagine yourself or your family making a home there. When you start narrowing your choices, and consider making offers, remember when you want to move. About 2 months from the time you want to move is a good time frame for making an offer. Before you make an offer, talk to your REALTOR® about what is involved because it is not as simple as it might seem. You can, for example, ask for contingencies and ask that certain things be included in the sale. Once you make that offer, knowing whether the buyer accepts or makes a counter offer should only take days. But once that offer is accepted, you need to brace yourself for a whirlwind of activity before the closing can take place.

In the weeks leading up to closing, there are several key things that have to be completed. Some of them will be up to you, but others will not be your responsibility.

• The buyer or lender will do a title search to make sure there are no liens on the property.
• You will have to arrange for an inspector to come take a close look at the home. Do this early because if they find problems you want to make sure there is time for the buyer to fix them. Most people hire an inspector based on their realtor’s referral, but you can also hire one yourself if you prefer.
• The seller will arrange for the house to be appraised to ascertain whether it is worth the selling price.
• Generally, if you’re putting down a deposit of less than 20%, you will have to get homeowners insurance before closing. Shop around because policies and prices vary a lot.
• Several weeks before closing, make sure you are ready for the big day. If you don’t already have it, ask your lender for a copy of the HUD publication called “Your Settlement Costs” which will help outline payments you are going to have to make that day. Double check your calculations of closing costs to make sure you have enough to cover yourself on that day and get a cashier’s check to cover them.

By closing day, the hard part should be over. You will sign a lot of forms and take a final walk through of the property. At that point, there will only be one thing left for you to do: Celebrate in your new home.

Some folks think the best idea is to take the house off the market come November and bide their time through January when they know the buyers will be back. Even though it is true that sales typically slow between November and January, it is not a hopeless time at all to have a place on the market, particularly this year. One thing to keep in mind is that anyone who buying in the dead of winter probably has a good reason for doing so.

There are always a few very serious buyers who wait until their family is all gathered in town because they want the whole crew to help them search for a nice property and to try to keep clear-headed about how much to spend and how they are going to get the best return on their investment. Those are usually the people who have a real serious deadline to meet – perhaps they have to get out of their tiny one bedroom apartment before their first baby arrives, or they have to be settled in a new town before they start a new job there.

Because some people do take their homes off the market, the number of homes on the market declines. This can work to your benefit because serious buyers have fewer homes to pick from this time of year. Make sure you come up with something that makes your home stand out — price it well. One way to turn off buyers is to put a price tag on it that is higher than comparable homes in your area. Remember that you have to get people to come through the door before you can make a sale. Don’t give them a solid reason not to take a look.

When they do come over, make sure the place is irresistible. Sure, the grass might be covered in snow and the trees may have lost their leaves. But a few potted evergreens and some pretty outdoor lights or an eye-catching piece of art will make the walk to your door memorable.

The inside should be everything the outside is not. Think warm and bright and cheerfully decorated. Selling a home is easier when the buyers can imagine the plopping themselves down in it right then and there and feeling completely comfortable. Who wouldn’t feel happy to walk out of the cold and into a home with a roaring fire, twinkling lights and that smells of pine from the freshly cut tree in the living room? Go all out and put a batch of hot cider on the stove to entice buyers even further.

Even at Christmas, it is important to stick with the ‘less is more’ mantra of showing a house. Make sure the decorations are minimal and tasteful because, let’s face it, some people just go completely overboard when it comes to decking out their house for the holidays.

And don’t forget to hire a really good REALTOR®. When the market is hot, a lot of homes are going to sell themselves. But when things are down, it is key to have a REALTOR® who has a track record of making sales. It‘s even better if you can work with someone who has made sales over several winters and in down markets and can give you solid advice about moving properties when people aren‘t buying.

So think seriously about whether you really want to take your house off the market till next year. The biggest gift you get this year could be a signed sale contract.

Next up? Your mortgage release documents.
If you’ve ever refinanced, you’ve paid off one mortgage and replaced it with another. You’d be amazed at how often there’s no record of that mortgage being paid off. The lender is supposed to file a ‘release’ with your local government, to prove it’s paid off, but sometimes they don’t.

How does that affect you? Well, when you go to sell the place, it will appear that there’s still a big mortgage on it. Usually title companies can clear it up, but it takes time and it could delay your settlement! Sometimes, when the lender files a release with the government, they send you one too. Sometimes they don’t. But if they do, keep it.

And, this advice doesn’t just apply to primary mortgages. If you’ve ever paid off, or shut down a home equity loan, keep anything you get that proves it’s paid off.

And finally, the deed. This is the big one.
If you’re fortunate enough to have actually paid off your house, you’ll get a copy of the deed. It contains critical information about your home — specifically, who actually owns it. Is it all yours? Or does your wife own it too? It will say whether it’s owned as a tenancy in common, or a joint tenancy. This will determine whether you can sell just your part of the place, or not.

The deed also contains the legal description of your property, and other important information. But most important of all, it proves you own the place!

So, if you’ve already put all these documents in a safe place, great. But, if they’re scattered all over the house, gather them up, and put them some place safe.

Someday you might be really glad you did.

How quickly can you purchase a home, in today’s market?
With the latest in technology, the verifications can be done quickly: your credit report which can be run in moments; and, income can also be verified right away with tax returns. Recurring debts can also be accounted for with the credit report.
An appraisal would also have to be done on the property. The appraisal could be ordered and in a few days could be taken care of. So, all-in-all, you’re talking about a relatively short period of time for somebody to qualify, when all the facts are there, the income ratios are correct and the home appraisal is done.

Does the speed of the deal pose any risks to buyer or seller?
There’s no risk to either the buyer or the seller in the transaction. The lender takes the risk on making the loan, and there’s title insurance insuring the property. The speed of the transaction does not pose a risk to the buyer or the seller.

Can a home inspection be done right away? Should I right a clean contract after the inspection is all done?
The home inspection is done differently in different parts of the country. For example, in Long Island, the home inspection is done prior to the contract being signed. The term “contract” refers to coming to an agreement on the house, giving a preliminary offer and accepting the agreement – after which the home inspection is done – this can be done in a couple of days. The inspector meets with the purchaser, and familiarizes them with the property. Once this is done, the risk is relieved for the buyer.

The biggest challenge with a quick deal, is mortgage approval.
This can go quickly, if you have income verification and paperwork ready. Then it’s simply a matter of finding the right house, and having your home inspection done.

Unlike a traditional sale — where you advertise, hold open houses, put out flyers or email campaigns and wait for offers — Auctioning real estate doesn’t involve that open-end waiting game. At auctions, the traditional marketing methods are employed, but the difference is that the process is accelerated. Very extensive marketing is done in a short time and then, on a specific date the buyers must decide at that time — no more waiting for tomorrow to go and look at other choices.

The sellers can be protected during the process as well. The auction company works with the sellers before the auction, during the listing period, and there are several ways that the property can be sold. The sellers can set a reserve price auction where they set a price, and if a bid doesn’t come in at that price, the property is not sold. At a minimum bid auction, the auctioneer will announce to the buyers that there will be a minimum price they need to start their bids at. And, finally, the third way is an absolute auction where the property is sold to the last and highest bidder, regardless of what the price is.

In an auction sale, there are no contingencies – not on financing, not on the home inspections, not even appraisals and not on getting family members to approve the home. None. An auction does require a larger deposit and if the buyer don’t close they forfeit their deposit. This brings out the serious buyers. But, it is important to know that auctions force the buyers to complete their diligence before the auctions. Financing: if required, needs to be pre-qualified with a commitment from the institution before bids are made. Bring a home inspector out before the auction date.

The auction company will work with the buyers to answer all their questions, and satisfy all their requirements before they close, and before they make their offer.