Here is a quick outline that will help you become a successful home buyer. There may be other things that would help and other agents may have different strategies. These work well in my experience and specifically in today’s market.
Be Pre-approved. Not pre-qualified. Get your credit score pulled by a lender, supply them with all of the documentation they request and get a firm pre-approval. Talk to them about refreshing it if you don’t find a house within 45-60 days and how these subsequent pulls may or may not affect your credit rating, too. It’s alright (even preferred) to interview a few lenders before you sign on the dotted line. Like the commercial says, “Just Do It!” if you’re serious about buying a home.
Note: If you’re primarily interested in foreclosures and the property will be your principal home, talk to the lender about rehab loans. Many foreclosures are not financeable in their current condition and will require either a cash offer or a rehabilitation loan.
Commit to a Realtor. Again, interview a few. Realize that not many will invest a lot of time into you if you’re not pre-approved and serious. Once you commit, stick with them and be open if there are things you don’t like. Sometimes it will be their way of doing business, other times it will be the market dynamics and you’d experience with any agent.
Get daily listing reports. New listings, listings that have dropped into your price range, houses back on the market. The good ones are going fast and you need to be ready to roll.
Drive by the interesting ones within 24 hours. Don’t wait or you may get shut out or put yourself in a multiple offer situation. Be sure your agent will have time to get you into homes within 24 hours of your request.
Don’t be afraid to pull the trigger. Once you see a home you’re interested in, write the offer. If you’re in the lower price ranges (under $200,000), you will possibly be only one of multiple offers. Being pre-approved gives you a step up over casual buyers. Write that offer fast.
Don’t lowball. If it’s a total dump, that’s one thing, but if it’s habitable, write a realistic offer. After you’ve seen a number of properties you’ll have an idea of a fair price for the house and its condition. Lowball it and you’ll open the door for a competing offer.
Be prepared to get pre-approved by a lender chosen by a bank if it’s a foreclosure. That’s not uncommon. You don’t have to use them for the loan, but they want to make sure you’re able to perform financially. This can take from a few hours to a couple of days.
Have an inspector chosen. One way to make your offer more appealing is to stipulate a shorter inspection period, say 5 days from date of seller acceptance. Ten to fourteen days sounds a lot more like you’re playing games to a seller –especially if it’s a bank-owned property. Discuss with your agent the typical inspections for the area. Home, sure. Well and septic, maybe. Radon, perhaps. There could be others.
Make a ‘real’ earnest money deposit. Don’t do the $500 gambit. Put down a minimum of $1,000. I recommend that you put down 2-3% of the offer price. If the offer doesn’t fly, you’ll get it back. If the inspection is bad, you’ll get it back. If all is well, that money is applied to your down payment and closing costs.
The key is to fill in as many blanks as possible before you even look at the first house. Put yourself in position to move quickly and definitively. It will reduce stress and let you focus more on making good decisions. If you’re looking for homes in my market areas, feel free to contact me for a no obligation discussion.
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