5 Secrets to Buying the Best House for Your Money

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.

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.

3. Play the Game of Nines

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. Information is available on every school; such as class sizes, % of students that go on to college, SAT scores, etc. You can get this information from this web site.

5. Stop Calling Ads!

Please note - ads are sometimes created to make the phone ring! Many of the homes have some drawback that's not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What's not mentioned in the ad is usually more important than what is.

For this reason, I want you to be very careful when reading ads. Remember that the person writing the ad is representing the seller and not you! The most important thing you can do is have someone on your side looking out for your best interests. Your own agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about. So whether you decide to work with me or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer's broker. Then you become a client with all the rights, benefits, and privileges created by this agency relationship, and you're no longer just a shopper. Did you know that many homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUT IN THE PAPER? These "great deals" go to those people who are committed to working with one agent. When an agent hears of a great buy, who do you think he's going to call? His client, who he has a legal obligation to work hard for you, or someone who just called on the phone and said "keep your eyes open"? So to get the best buy on a property, I always recommend that you hire your own agent and stick with him or her.

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What is Escrow?

The Escrow Process
Both buyer and seller deserve the assurance that no funds or property will change hands until all of the instructions in the Purchase Contract have been satisfied. Buyers and sellers submit signed documents and buyer’s deposit money to be held by an independent neutral third party (Escrow). After the conditions agreed upon by both buyer and seller (in the Purchase Contract) are satisfied, Escrow then distributes the documents and the funds.

The escrow holder is an independent neutral third party; works for both the buyer and the seller, and is authorized to follow the specific written instructions provided by both parties. Escrow functions:

• Receives and deposits (into escrow’s account) buyer's initial deposit and prepares escrow package. Requests "demands" (pay-off statements) from existing lenders and/or lien holders. Obtains seller's notarized signature on grant deed. Safeguards grant deed until all terms and conditions are met and buyer’s remaining certified funds are on deposit. Orders title search and receives and distributes preliminary title report. Calculates prorations pertaining to property taxes, rents, insurance, interest, and other expenses as required.
• Coordinates with buyer's lender throughout the escrow process. Orders and processes buyer's loan documents. Coordinates buyer’s signing of loan documents and their return to buyer’s lender. Receives buyer's final down payment funds and coordinates funding with buyer's lender.
• Orders recordation of grant deed conveying title to buyer and distributes all funds: pays-off existing loans; pays other required costs, such as termite completion, home protection policy; etc. Releases net proceeds to seller.

Simultaneously, the buyer and the buyer's lender are engaged with the loan approval process. Lender duties:

• Orders a credit report and other credit documentation as required (mortgage ratings, landlord ratings). Reviews the buyer's credit and when necessary obtains satisfactory explanations from the buyer regarding any negative credit history. Verifies the buyer's sources of income. Verifies that the buyer has adequate liquid funds for down payment, closing costs, and reserves. Requests an appraisal of the property, and verifies that the property's value is equal to the contract sales price.
• Submits the loan to underwriters for final approval.
• Coordinates delivery of the buyer's loan documents to the escrow officer.

And in the meantime... While the escrow officer, lender, and buyer are diligently working, the seller also has responsibilities.

• The seller and the listing agent must now prepare detailed disclosures that are required by law (smoke detector, lead based paint, earthquake, environmental hazards, zone disclosures, water heater, transfer disclosure, etc.)
• Provide escrow officer information on existing loans to check against title search findings.
• With their Realtor, make the home available for physical inspection and other trades people as required by the purchase contract, such as licensed Termite Company and lender's appraiser.
• Make any repairs agreed upon in purchase contract.

In order for your escrow to proceed smoothly, your Realtor’s job is to coordinate and oversee the above chain of events. Similar to dominos – each event must occur in a timely fashion; delays in any event may result in the postponement of escrow’s scheduled closing date.

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The Most Common Mistakes People Make When Buying a Second Home

Some buyers will look back on their home-buying decision and smile. Others will not. The smart buyers smile because they learned from the mistakes of others.

Mistake No. 1 - "I'll wait until next year." The same property is unlikely to be available next year, and if it is available, it will usually cost more. Look at the projected price and availability a year from now and see if it makes economic sense to wait. Mistake No. 2 - "We want to buy near our friends." The market may have changes since the friends made their purchase, and the best value may be in another area. Friends are not always informed or objective about the market. Mistake No. 3 - "We don't plan to move again." Plan for the unexpected. Changes in financial status, health, or family needs can occur and require a sale sooner than expected. Resale value will always count at some point, so consider that possibility when buying. Mistake No. 4 - "It's just the two of us; we don't need much room"/"We have a big family; we need lots of bedrooms." Many people find themselves selling the first home and buying a larger one within two years because there is no storage, the kitchen is too small, or there isn't adequate space for guests. Others scale down later because they were tired of running a hotel for friends and relatives. Avoid extremes. Mistake No. 5 - "We don't want to spend more than..." Price is a factor, no matter what the budget, but it shouldn't be the only factor. With interest rates extremely low, buyers can get more home than they expected. Most lenders will be glad to pre-qualify buyers and outline a variety of choices. Mistake No. 6 - "We just loved/hated the way the home was decorated." Look beyond paint, wallpaper, and furniture, and see room size, layout, windows, and view. Nearly every model is gorgeous, but that doesn't mean it will work for every buyer. Some resales need a face lift, but that shouldn't get in the way of a good value if the layout and location work well. Mistake No. 7 - "This community has a restaurant and clubhouse, golf, tennis, shuffleboard, an Olympic-sized pool, a fitness center, paddleboats, and..." Those are all nice amenities if they match the buyer's interests. Not only is the cost of the amenities built into the price of the home and the association fees, but buyers who don't use the amenities may not have anything in common with their neighbors. Mistake No. 8 - "We can't wait to bring our three German shepherds back with us." Many communities have deed restrictions of some kind. They can be as varied as the number and size of pets allowed, to the ability to park a truck in the driveway. The rules are always spelled out in writing in the form of association documents or zoning ordinances. It pays to find out in advance what they are. Mistake No. 9 - "We don't have any imagination. We have to see it built already." Developers begin selling properties before models are completed, before amenities are built, and sometimes before the first shovel of dirt is moved. Buyers, who have the foresight to look at floor plans and to thoroughly check out the reputation of the builder, can lock in a prime location at the lowest price with complete confidence. By the time models are built, prices will have risen and the best locations are often not available. Mistake No. 10 - "We want to look at everything before we make a decision." In any given month, there are usually thousands of resale homes on the market. In addition, there are almost as many new homes being constructed. It isn't possible to become an expert on everything in the area in a short period of time. So ask. Talk to friends, the person walking his dog, a mortgage broker, or a Realtor. A real estate agent can help by identifying the buyers' needs and wants and narrowing down the search to only those properties and communities that meet those requirements and reflect current market trends. However, buyers who are willing and able to do their own research can find the same properties and make a buying decision that is both a good investment and a home they will enjoy.

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I Have the Internet - Why Do I Need a Realtor When I Buy a Home?

The internet is great. Never before have home buyers been so empowered. With the internet it is possible to research homes in another town, compare prices, size, features, etc. without ever speaking to a real estate professional.

If that’s the case, why should anyone ever use a Realtor to buy property? Isn’t that a waste of time? Not if making a good buying decision is the main objective. The internet can offer data but it can not interpret it. That’s the big advantage of working with a Realtor. Realtors not only know the market but they know how to interpret it.

A Realtor doesn’t just spend time working with buyers and sellers. Realtors study market trends. Which areas of town are appreciating fastest? Where are properties turning over quickly and where is inventory piling up? What features are buyers looking for that they are willing to pay more for? What features make a home dated in buyers’ eyes?

All of these are questions that Realtors research every day. With over 7000 resale properties on the market in the Naples area at any given time, and thousands more being built it is a full time job to stay on top of this ever-changing market.

Features that might be considered standard in one neighborhood could be overbuilt in another. Knowing that properties are taking longer to sell in one area than in a comparable area might make a difference in what price a buyer might want to offer. Even knowing what government or environmental regulations are new or pending can make a difference in a home’s value in the future.

Most new communities are not found on the internet through the same sources as resale homes. It makes it difficult for a prospective buyer to compare apples to apples. Realtors tour new communities on a regular basis and track their sales as well.

This market demands constant education. Seminars put on by the Naples Area Board of Realtors, the Collier County Building and Industry Association, and others are invaluable resources. Realtors work with appraisers, home inspectors, lenders, and other professionals on a regular basis. These become sources for market information as well.

Buyers can use the internet to save time and to get ideas. They can eliminate homes that do not meet their needs and explore areas that look interesting. A good realtor will not talk a customer into or out of buying a home, but will make sure it is an informed decision that results in satisfaction for years to come.

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Get Full Value with a Full Time Real Estate Professional

It probably doesn’t bother you that your waiter works part-time and is in school full time. Part-time store clerks are perfectly acceptable. On the other hand, you would probably think twice about a part-time surgeon or a part-time nuclear engineer. After all, isn’t keeping up with and refining one’s skills in a demanding field a full-time pursuit in itself? Why then should you settle for a part-time real estate professional?

Your home is probably your largest and most treasured asset. Buying and selling homes involves complicated transactions, careful marketing, skillful negotiating and a full-time professional who has the time to network effectively on your behalf. Among the many changes in recent years that demand significant time from a real estate professional are the innovations made possible by the Internet. A savvy real estate professional today knows how-to find and market homes online and on the Internet using a variety of techniques. Not all of these are obvious to the average Internet user and some, such as area multiple listing service systems, remain exclusively available to real estate professionals. New websites are born everyday and old ones go away. Keeping up with these changes could keep an entire team of professionals busy, let alone a part-time real estate sales professional. Changes in real estate marketing require a skillful professional as well. The advances in desktop publishing and four-color printing technology mean a wider variety of low cost and highly targeted print advertising vehicles are available to the real estate professional seeking to attract buyers and sellers on your behalf. When you list your home with a real estate professional, you want to know that they have the time to access the latest in direct marketing technology on your behalf. Not that your real estate professional creates the ads or sends all the letters that promote your property, but a cost-effective marketing campaign requires a knowledgeable decision-maker to choose the best tools from among the myriad of marketing vehicles and technologies available today. One of the key functions of a real estate professional is to bring buyers and sellers together. While a local multiple listing service provides a real estate professional with a guide to properties currently on the market, the raw data is only the beginning of the process of putting buyers and sellers together. A real estate professional must spend a good deal of time becoming knowledgeable on the communities and neighborhoods served, developing resources to answer questions about area schools, taxes, recreational amenities and other issues. In addition, your real estate professional should spend countless hours on home tours becoming intimately familiar with the details of available properties. Peer-to-peer networking among real estate professionals is a key source of the buyers and sellers that are matched together and a key to knowing about properties before they even go on the market. To the extent part time real estate professionals have less time to dedicate to all of these tasks, they may be less well prepared to serve your needs. Buyers seeking highly attractive properties can lose out on a real estate opportunity in a matter of hours if their property search is handled haphazardly. Sellers hoping to attract a buyer would be disappointed to know that a potential buyer saw another home before theirs simply because their real estate professional was unable to show the home at a convenient time. One of the most critical roles played by your real estate professional is in the negotiation phase. Negotiations over the terms of a home purchase contract can be extremely sensitive. A real estate professional needs to be available to respond quickly and turnaround offers and counteroffers at any time. No doubt, there are many capable real estate professionals who for a variety of reasons are only available on a part-time basis. Nevertheless, it is important to ask your real estate professional whether or not they are full-time professionals and what hours they are available. With so much at stake, the answer to the question: ‘full-time or part-time?” could definitely make a difference in the choice of the right real estate professional for your needs. A full-time real estate professional stands ready to deliver full value in response to your home buying and selling needs.

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Buying your first home? Here’s what you need to know

You’ve made the decision to make one of the largest investments you’ll ever make in your life-buying your first home. You’re excited, but at the same time anxious. Some of the questions you may be asking are: Will I be able to afford the home of my dreams? Do I have enough money for a down payment? Can I get a home inspected before I make an offer?

Rest assured, you are not alone. According to the 2000 National Association of REALTORS® Profile of Home Buyers and Sellers, first-time homebuyers accounted for 40 percent of the homes purchased in 1999. The homebuying process can be overwhelming, but if you go into it prepared, your first purchase can be a good experience. Here are some things to consider before making the plunge. Getting a mortgage - Fear of being rejected for a home loan is one of the main concerns for first-time homebuyers. To lessen the stress, you may want to get pre-approved for a loan before looking at prospective homes. This will not only help you feel more confident, it will also give you an advantage when there are multiple offers for a specific home. The fact that your loan has already been approved is of great value to the seller: because it shortens the purchase process and there is less of a chance that the buyer will back out of the sale. Mortgage Payments - The costs involved in the purchase of a home can be overwhelming to first-time buyers. However, with the help of a real estate professional, you can calculate out how much they you be able to pay each month in mortgage payments, and from there, what prospective homes offer a feasible payment plan. Down-Payment - The down-payment amount varies depending on the value of the home you choose and your mortgage lender. And in some cases, first-time home buyers can purchase a home with no money down. Although it varies from state to state, most offer government-funded programs for first-time buyers that help people buy a home with no down-payment. Your real estate professional will be able to explain the different options available to you. Closing Costs - First-time buyers often forget to consider the closing costs when making an offer on a home. Paying closing fees of up to 10 percent of the home sale amount is not unusual. Add that to the down-payment and you’ll have quite a sum to raise before the final papers can be signed. However, a smart first-time buyer takes this into account before making an offer, and with some professional help, the costs can be estimated in advance. Making offers - Don’t feel pressured into making an offer on the first home you see. This is a common mistake of many first-time homebuyers. Make sure you view different homes to get a feel for the marketplace. When you do decide on a home to make a bid on, work with your real estate professional to get all of your questions answered first before making an offer. But don’t wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal. Condition of the Home - Buying a “problem” home is another fear of first-timers. A home that needs major repairs can become a costly venture. And, unless the asking price is adjusted to reflect the hidden repairs needed, chances are the home is not worth as much as the seller is asking for it. To avoid unfortunate surprises, your real estate professional may advise you to hire a home inspector before making a serious offer. That way, you know what you are getting into. Above all, remember that there are no silly questions. Make sure you understand and are comfortable with every aspect of the transaction. Your real estate professional can be an invaluable asset in helping you make educated decisions so that your first-home purchase is a rewarding experience.

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Five Powerful Buying Strategies

In a perfect world, it would be easy to always be objective and make rational decisions based on sound information. In reality, emotions and timing often have a big effect. Sometimes the best you can do is try to set the stage so that you minimize the subjective influences.

Give yourself power and control. Don't find yourself in the position of "having" to buy and doing so in haste. 1 - Work out the finances first. Paying cash? Getting a mortgage? Find out what you can afford and check out all your various options. Meet with whatever experts you need to in order to have all your facts - a lender, your tax advisor, etc. Knowing exactly what you want to spend and can spend will eliminate time spent looking at properties you can't have. Not only that, when you find the right property you can make a "clean" offer without a financing contingency. Sellers are more likely to respond favorably to clean offers. 2 - Unless you really want to own two properties, sell first. Then buy. First of all, the property you want will probably not take a contingency offer. So unless you are prepared to own both (and you have to plan for a worst case scenario) you are wasting your time with the offer. Second, if you are emotionally attached to what you want to buy you won't be as objective on selling your home. You may take less than it's worth so that you don't lose the other home. There's nothing wrong with that as long as you understand the financial implications. 3 - Use a realtor who knows the market. That may sound too simple in this age of the internet, when buyers have access to the same data the agent has. The difference is the ability to interpret that data. Full-time realtors do more than show homes and write contracts. They study market trends and observe area fluctuations. You are thinking about your needs now. But your agent is thinking about both now and in the future when you are ready to sell again and looking for your future resale opportunities. In addition, the internet is an increasingly non-objective source of information. Many websites do not display all the properties that are for sale in a given area because of contractual conflicts. And most new communities are not listed at all in any search vehicle. A professional realtor should be able to show you all the homes that fit your needs. 4 - Wait till your toes curl. In other words, don't get pressured into making a decision. When you find the right home you will know it (your toes will curl or the little hairs on the back of your neck will stand up). That doesn't mean look at 200 homes before you make a decision. Sometimes it's the first home you see. But don't let an agent, a seller, or a spouse, push you into something you don't feel good about. 5 - You can't have it all. Decide what is most important in your next home and put it into perspective. If it's location, or price, or view, or square footage, or school districts, or amenities, or whatever. Remember that some things can be changed. Floors, kitchens, landscaping, etc. are all changeable. So if they are not perfect, they can be. But location, view, amenities, etc. are there forever. No matter what your budget, the good fairy of real estate did not go - poof! There it is. It simply doesn't happen. Everyone has to make compromises. So decide what truly matters to you and put that at the top of your list. Give in on what doesn't matter as much. Follow these guidelines and you'll get the home you desire.

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Buying Pre-Construction? Here’s Why A Real Estate Professional Should Represent You

It might not seem necessary to involve a real estate professional in a transaction where a buyer can deal directly with a builder. Think again! A real estate professional representing the buyer’s interests, can guide you along the right path, smooth the rough places and help ensure you make a decision you can live with (and in) for many years. Here’s how:

• Just as a real estate professional calls on experience and knowledge of an area to help buyers locate pre-owned homes in a community, he or she can also direct buyers interested in newly built homes to developments and communities that match client specifications.
• An agent can suggest builders based on their reputation for delivering a high-quality product, responding quickly to issues, and being financially sound.
• An agent may be familiar with how a builder prices his products and where there may be room to negotiate price or upgrades.
• Without agent representation, you are one buyer purchasing only one home. But an agent can significantly impact a builder’s bottom line by providing a steady supply of customers. The agent’s leverage may work in your favor at the negotiating table. [Note: The builder may require your agent to accompany you on your first visit to the site. Check with the builder.]
• When relocating to a new area, agents can be particularly valuable resources. In addition to providing local area information regarding schools, day care or elder care services, public transportation, proposed development, and so on, once construction is under way, an agent can periodically stop by the work site, supply you with progress reports, and photograph or videotape phases of the construction.
• An agent can assist you as you face hundreds of design choices and consider which upgrades could potentially add value to the home when it comes time to sell.
• An agent can accompany you at the site while you okay the plumbing and electrical locations prior to drywalling, as well as on the walk-through or builder orientation.
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By now, you should be convinced of a real estate professional’s value as you search for and purchase a newly built home. Still, here’s one more great reason to work with an agent-the builder pays the agent’s commission. You enjoy individual attention and support at no cost to you. What a great way to start life in a new home!

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