Secrets to Buying the Best House for Your Money

Secrets to Buying the Best House for Your Money


1. Get "Pre-Approved" - Not "Pre-Qualified!"

Do you want to get the best property you can 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, I 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 WORTHLESS, and here's why! None of the information has been verified!



Many times unknown problems can come to the surface! Some of the problems I've seen include recorded judgments, alimony payments due, glitches on the credit report due to any number of reasons both accurately and inaccurately, down payments that have not been in the clients' bank account long enough, etc.



So the way to make the strongest 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 days to a few weeks depending on your situation. It's VERY POWERFUL and a weapon I recommend all my clients have in their negotiating arsenal.





2. Sell Your Property First, Then Buy the House

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.

3. 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.



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 are 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. I 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.



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 underpriced, and you'll know if it is.



Don't forget to check into the SCHOOL DISTRICTS of the area you're considering.

Tips for Buying A Home: When Checking Out A House, Leave Your Emotions At Home.

Homebuyers often follow their hearts, and they should. Sometimes just going


with a gut feeling is the best indicator. But when it’s house-touring time, it’s

important to set those emotions aside and replace them with clear-headed

thinking and a critical eye. Otherwise, your potential dream house might just

turn into a money pit.

Although you should always hire a professional inspection before you

complete the sale, you can spot the more obvious trouble signs early in the

process simply by knowing what to look for. You can quickly check five key


areas to determine if the home has serious problems.

Roof. A new roof can cost between $5,000 and $15,000 depending on

the type.

• A quick method to determine if the roof is leaking is to look in the attic.

WARNING: Don’t climb into the attic yourself, unless you know how to

walk on joists; you might step through the ceiling and injure yourself.

Simply open the attic access panel and look inside.

• With a flashlight, check the rafters. They should not show water stains,

which indicate leaking.

• With the flashlight off, look up at the roof. Any pinpoints of light shining

through indicate a worn roof.

Foundation. A cracked foundation is a serious matter. It can cost tens of

thousands of dollars to fix, and, in severe cases, may not be fixable. Keep an

eye out for these potential warning signs:

• V-shaped cracks (larger at the top than at the bottom) around the

perimeter of the house.

• Cracks in interior walls near corners of doors or windows. Look at all the

corners of windows and doors, and at joints where walls meet walls,

ceilings, or doors for signs that they are pulling away from each other.

• Doors that stick and squeak.

• Leaks and cracks in and around the fireplace.

• Obvious cracks in brick and mortar.

Piping. Copper piping rarely corrodes and is the plumbing of choice these

days, but many older homes have galvanized steel plumbing. After 30 years or

so it tends to rust out and leak. Replacing it can cost $5,000 or more, so it’s

something you’ll want to watch out for. Call a plumber if you have specific

questions.

Flooding. If a house is poorly situated on its lot, flooding can occur under the

house, which can seriously damage the home.

• In the basement, check for water stains on the foundation indicating flooding

during rainy periods. If you find these, call in a soils engineer to confirm the

problem and suggest solutions.

Unapproved work. All improvements to the property should have been done

with permits from the local building department. Work done without permit

may be substandard and, if discovered later, may need to be ripped out.

• Go down to your local building department and request copies of permits

for all work that was done at the property address. Compare these with any

additions or replacements done by the seller. If work was not done by

permit, you may ask the seller to obtain permits for the work and bring it up

to building-code standards before you purchase.


This information is brought to you by a proud member of the Texas Association of REALTORS®. Whenever you buy, sell,

or lease real estate, make sure your agent is a REALTOR®.

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