What Smart Home Buyers Need to Know

Cincinnati home buyersWhat a smart home buyer needs to know with so many homes/condos to preview?

So many friends offering different advice on how to buy a home…where to buy…what agent to use…what agent not to use!
So many family members wanting to chime in on your decision!
Sound familiar?

You are not alone, the home buying process can be both mind boggling and stressful.  The sheer volume and speed of information can be overwhelming. It is best for everybody if the buyer is savvy smart about the home buying process and your realtor will help you through ins-and-outs.

My approach is called the smart buyer game plan:

  • If you have decided to work with a realtor – work with only one agent and cut down on aggravation for everybody.  By all means interview agents, ask for referrals from friends and family then make up your own mind on the right agent for you. A full-time licensed real estate agent who is knowledgeable in your marketplace can provide invaluable help and guidance. We all have access to the same market information (Multiple Listing Service MLS) and working with multiple agents within the same marketplace is redundant and a waste of time for everybody.  Occasionally the best laid plans go wrong and you find yourself dissatisfied with your agent and decide to part company. Tell them about your decision and move on.HomeSearch
  • If money were no object what type of home would you buy?  Make a list of features you need and a “wish” list. Focus on needs first and then use your “wish” list to narrow down the search. Step back, take a breath and review your list. There may be features you think you can live without (now) but will you kick yourself in a year. Best example extra bathroom, closet or storage space…
  • Be smart -going to move again soon? Don’t build a home in a new subdivision with 300 lots sitting empty. Do you like the grassy acreage behind your new dream home- investigate zoning to ensure it cannot be sold to the local school district or subdivided for 100 homes. My favorite in a neighborhood- cars parked on the neighbor’s front lawn, boats and trailers parked all over- what type of codes are in place to protect neighborhood value? Good resale value is about thinking ahead and looking at the “big” neighborhood picture.
  • Work with a reputable lender.  If 3 lenders offer you basically the same rate and closing costs (minor variations) and a 4th lender offers you a significantly better rate and lower closing costs- the offer should sound alarms that you need to compare apples to apples. Don’t let anybody talk you into a program which allows to borrow for more than you afford/planned- stick to your budget.  New consumer lending laws effective August 1, 2015- make lender communication more important than ever.  Make sure the lender you select is responsive to your calls and stays on top of the dates detailed in the purchase contract.

house of money

  • Get an approved loan prior to house hunting.  Serious buyers -especially in the current real estate market- have their loan “approved” pending a contract and appraisal. Smart buyers want to cut down on negotiating- a good offer backed with an approved loan- significantly reduces seller anxiety about your financial qualifications. If you are focused on purchasing a home, full loan approval prior to shopping is the easiest step.
  • Write a decent purchase offer.  Your agent should provide a CMA (Competitive Market Analysis) for any property you are even thinking about. The CMA should contain current sales, active listings, pendings and expired listings as well as sale price for any property sold privately (Not in MLS system). Unless you are purchasing in a very unique neighborhood, the data has to be no older than 6 months- preferably within 3 months. Take time to review the data with your agent and make a decent offer. I cannot count the times buyers have paid more for a property because the first offer was way below market. Don’t insult the sellers.
  • Hire a professional inspector (professional = ASHI certified).  You have an accepted contract- don’t wait until the last minute to schedule the inspection. By scheduling inspection(s) as soon as possible allows time to bring in other professionals within the contract time-frame. For example the original inspector may indicate the need for a professional HVAC service and inspection on the furnace. If you waited until the last day of the inspection period, you will be stressing to secure the HVAC appointment.
  • Buy adequate home owners’ insurance.  The new lending law which goes into effect 10/1/2015 requires borrowers to receive the closing statement 3 business days prior to closing (no last minute changes anymore).  The change will require that buyers purchase home owners’ insurance at least 10-14 days before the closing date.  It’s a good time to discuss the ins and outs of what is covered and what isn’t covered by your insurance.  Many buyers go for the lowest premium policy.  Later on they discover the out-of-pocket costs to repair damage is much higher than expected.  Take time to discuss the ins and outs of insurance coverage
  • Purchase the home owner’s Title Insurance policy.  In our marketplace the buyer purchases title insurance which covers only the lender and, at the same time, they are offered reduced price on the policy to cover the owner. Purchase the policy to protect your investment. It is a one time expense and can protect you against a myriad of problems down the road.

Relax and remember Murphy’s Law- anything that can go wrong..will go wrong.  Murphy’s law may come into play- but don’t let the “bumps in the road” derail your purchase.  Your preparation and agent’s guidance cannot guarantee a stress free transaction, however knowing how to alleviate some of the problems will smooth the path for you. Remember each deal is different -so be prepared, smart buyers know when to walk away from a no win deal and when to raise their offer to secure the home of their dreams.

Call/Txt if you need more information or want to start house hunting now!