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Prudential Georgia Realty
4134 Highway 53,
Hoschton, GA 30548
Cell:706.207.3736
Office:706.654.2086
E-Fax:678.252.6312
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Use a Buyer's Agent
It's important that you choose an experienced agent who is there for you. Your agent
should be actively finding you potential homes, keeping you informed of the entire
process, negotiating furiously on your behalf, and answering all of your questions
with competence and speed.
First, find an agent who represents you and not the seller. This is beneficial during
the negotiation process. If you are working with a buyer's agent, he or she is required
not to tell the seller of your top choice. In addition, he or she is also focused
on getting you the lowest asking price.
Also, when you use a buyer's agent, you will see more properties. Not only are they
plugged into their Multiple Listing Service, but also they are actively finding
homes that are listed as FSBO, or homes that sellers are thinking about listing.
Why You Should Not Make
Any Major Credit Purchases
Don't go on a spending spree using credit if you are thinking about buying a home,
or in the process of buying a new home. Your mortgage pre-approval is subject to
a final evaluation of your financial situation.
Every $100 you pay per month on a credit payment could cost your about $10,000 in
home eligibility. For example, a car payment of $300/month could mean that you qualify
for $30,000 less in a mortgage.
Even if you have accumulated enough savings, you should considering not making any
large purchases until after closing. The last thing you want is to know that you
could have purchase a new home had you curbed the urge to spend.
Be Wary About
the Listing Agent
Traditionally, buyers would stop at a house for sale and be shown the property by
an agent sitting there. But the problem with that method is that the agent sitting
there is usually the listing agent. And in most cases, he or she represents the
seller.
Be careful about what you say to a listing agent. A listing agent's role is to find
a buyer, and to get as high a price and as good terms as possible for the seller.
He or she is required to inform the seller of any facts that may influence the seller's
decision about whether to accept an offer or not.
For example, if you mention to the listing agent how much mortgage you are qualified
for, don't be surprised if the seller knows too.
Always keep in mind that you want the lowest price and the best terms. If an agent
is not directly working for you, they could very well be working against you.
Be Careful of the 'Dual' Agent
Some agents will represent both buyers and sellers; they are called 'Dual' agents.
In many cases, the same agent will list the property and submit your offer. In fact,
they are required by law to remain confidential with both clients. There is nothing
legally or ethically wrong here, however it is hard to understand how the agent
can negotiate to the best of his or her ability on your behalf. Instead of becoming
a negotiator, they often play the role of mediator.
It is easy to assume that no agent can represent buyers and sellers as well as an
agent who declares for just one party or the other.
Buyers and sellers opt to use 'Dual' agents to get a savings in commission. An agent
who represents both buyers and sellers doesn't have to split the commission with
other agents and may be willing to throw in some of that commission, which, in effect,
will get you a reduced price.
Getting a Legitimate Lender and Getting Pre-Approved
It used to be that buyers could go house shopping and when they have found their
dream home, then they go to get pre-approved. However, in today's market, that
has proven to be one of the least effective methods in landing the dream home.
Most lenders can pre-qualify you for a mortgage over the phone. Based on general
questions about your income, debt, assets, and credit history, lenders can estimate
how much mortgage you qualify for. However, being pre-qualified and pre-approved
are different things. Pre-approval means that you have applied for a mortgage; you
have filled out the mortgage application, received your credit report, and verified
your employment, assets, etc. When you are pre-approved, you know exactly what the
maximum loan amount will be.
A pre-qualified letter is not verified and in essence, does not count for much if
you are competing with other buyers who are pre-approved. When you are pre-approved,
you and the seller know exactly how much house you can afford. It gives you credibility
as an interested buyer and lets the seller know immediately that you will qualify
for a loan to buy their property.
In addition to being pre-approved, it's important to be pre-approved with a legitimate
lender. Legitimate lenders include: banks, mortgage bankers, credit unions, savings
and loan associations, mortgage brokers, and online lenders.
Some lenders to avoid: those who lose a form or misplace a file, those who gather
information from you in an unorganized manner, those who are not informed about
interest rates, points or costs, and those who cannot provide you with the right
information.
Finding the Right Seller
The best seller is one who is highly motivated. A highly motivated seller is more
likely to sell for less than his or her house is worth. And it matters that you
find out why; learning the reason why can help you get the price you want and help
the seller get what they want: a timely sale.
When given the opportunity to meet with sellers, ask them why they are selling.
The reasons could be anything from job change to a new location to financial problems.
If you can solve their problem, whether it is cash related or time related, do so.
For example, if the sellers are highly motivated because they need to move quickly,
give them a fast sale - and a lower price. If you can make an offer, even a low
one, that gives them cash in a short time, they are more likely to accept.
There are also some sellers that you should avoid. Not every seller is as genuinely
motivated as they make themselves to be. Some possible hints:
*they stall on having the home appraised or inspected
*is unable to clear up liens against their property
*does not own 100% of their property
*they push back the move-out date
*does not have a replacement property or back up plan
etc. etc. etc.
It is impossible to find the perfect seller. But it is possible to find out which
sellers are legit, and which ones aren't.
Build a Plan of Action and Get Ready
Buying a home will probably rank as one of the biggest personal investments one
can make. Being organized and in control will contribute significantly to getting
the best home deal possible with the least amount of stress. Is important to anticipate
the steps required to successfully achieve your housing goal and to build a plan
of action that gets you there.
Before you can build a plan of action, take the time to lay the groundwork for your
decision-making process.
First, ask yourself how much can you afford to pay for a home. If you're not sure
on the price range, find a lender and get pre-approved. Pre-approval will let you
know how much you can afford so that you can look for homes in your price range.
Getting pre-approved helps you to alleviate some of the anxieties that come with
home buying. You know exactly what you qualify for and at what rate, you know how
large your monthly mortgage payments will be, and you know how much you will have
for a down payment. Once you are pre-approved, you avoid the frustration of finding
homes that you think are perfect, but are not in your price range.
Second, ask yourself where you want to live and what is the best location for you
and/or your family. Things to consider:
*convenience for all family members
*proximity to work, school
*crime rate of neighborhood
*local transportation
*types of homes in neighborhood, for example condos, town homes, co-ops, newly constructed
homes etc.
Hot, Normal, and Cold Markets
Hot Market -
This is an extremely competitive market, one that is advantageous to the seller.
Sometimes, homes will sell as soon as they are listed or even before homes are listed.
Typically, during a hot market, multiple offers will be made on each home and more
often than not, homes will sell for more than their asking price. It is even more
crucial to be prepared and to be ready as a buyer when the market is hot. It can
be easy to get caught up in the bid for a home, but if you are prepared (pre-approved,
solid in price range, realistic about your needs), it is easier to remain focused
on your housing needs and price range.
Normal Market -
In a normal market, there is fairly a large number of homes available and an average
number of buyers. This market does not necessarily favor the buyer or the seller.
A seller may not have as many offers on their home, but he or she may not be desperate
to sell either. Again, it is the buyer's responsibility to be prepared. During a
normal market, the chances to negotiate are higher than in a hot
market. As a buyer,
you can expect to make offers at lower than the asking price and negotiate a price
at least somewhat less than what the sellers are asking.
Cold Market -
In a cold market, houses may be listed for more than a year and the prices of houses
listed may drop considerably. This market is advantageous to the buyer. As a buyer,
you have the time to make an offer that works to your best interest. It is not uncommon
to low-ball and to find that sellers are accommodating to meet your needs. Keep
in mind that even though this market is a great time for buyers, you do not want
to lose your dream home by being unrealistic. Your goal is to get the your dream
home at the best possible price.
Importance of Inspection
As a buyer, you are entitled to know exactly what you are getting. Don't take for
granted what you see and what the seller or the listing agent tells you. A professional
home inspection is something you MUST do, whether you are buying an existing home
or a new one. An inspection is an opportunity to have an expert look closely at
the property you are considering purchasing and getting both an oral and written
opinion as to its condition.
Beforehand, make sure the report will be done by a professional organization, such
as a local trade organization or a national trade organization such as ASHI (American
Society of Home Inspection). Not only should you never skip an inspection, but also
you should go along with the inspector during inspection. This gives you a chance
to ask questions about the property and get answers that are not biased. In addition,
the oral comments are typically more revealing and detailed than what you will find
on the written report. Once the inspection is complete, review the inspection report
carefully.
You have to demand an inspection when you present your offer. It must be written
in as a contingency; if you do not approve the inspection report, then you don't
buy. Most real estate contracts automatically provide an inspection contingency.
Avoiding Financial Stress
By asking the right questions, and knowing exactly what your needs are, you can
find the right loan for you. There are certain approaches that you can take while
mortgage shopping that can cost or save you money.
It is still true that the better qualifications you have, the lower your interest
rate will be. However, there are mortgages available for almost everyone; it's the
interest rates or the down payments that vary.
Before speaking with a lender, know what monthly dollar amount you feel comfortable committing to. Then when you discuss mortgage pre-approval with your lender, it
is easier for you to determine the monthly amount and what value of home the monthly
amount translates into. Do not put yourself in the position where you will be paying
more each month than you intended simply because the 'dream' house requires it.
Do your research on the types of mortgages available to you and find the one that
best suits your needs. There are a number of considerations to be made in terms
of finding the best mortgage for each individual:
*What type of market are you in? Are the interest rates falling or rising?
*Do you want a fixed mortgage rate, where you will always know what your payment
is going to be?
*What are your long-term goals? Do you intend to resell the property? Do you
only need the mortgage for a short time?
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