By Stephanie Hell
If you really think you’re ready to take the plunge into a decades-long mortgage, and before you start the long and winding road to the perfect home, it would be helpful to know what your real estate agent is thinking.
There are some things they may not tell you but wish you knew. After all, they have likely worked with hundreds of buyers before and have no idea what you don’t know. Many homeowners were blissfully unaware of important details they should have known as homebuyers. Real estate agents are equally as surprised when a buyer doesn't realize the property will not come pre-furnished or how big the check is on closing day.
Know What You Can Afford
The one undeniable fact determining which home you’ll ultimately purchase is your credit score and financial situation. There are a host of home calculators online which will instantly assist you in determining your price range.
Unfortunately, some new homebuyers believe they can offer half the selling price to make their dream mansion affordable, and that’s a dream state often referred to as “delusional.” Real estate agents can help a lot with negotiations, but they are not hypnotists who can convince a seller to lower their price so you can buy what you really can’t afford.
Arm yourself with a budget and stick to it. Most real estate brokers will have a wide variety of options from which you can shop in your range, and that’s really what they are best at.
Be Clear About What You Want
Being a first-time buyer is difficult if you haven’t really searched the area you’d like to live in, or if you’re open to just about anything. If you’re also unsure about size, school districts, frame or block, age, neighborhood, and new or used, you’re going to be deluged with hundreds of listings that most real estate agents don’t want to take the time to show you. They would much rather spend their “free” time with those who are succinct with all the options and amenities.
There’s a reason most home-selling websites have every listing pictured for review. They want to you narrow your own search first so you can spend your valuable time and theirs on the dozen or so where you’re likely to actually go take an in-person look.
Know Who’s Involved
You’ll have a real estate agent scouring listings to show you homes, and the seller of each property also has someone representing their home. Each professional is charged with getting the best price for the buyer and the owner. It can seem at times like a game of chess, and sometimes you’ll get what you want and other times you may feel taken advantage of.
There has never been, in the history of home sales, the perfect deal in which everyone is so thrilled the entire group starts spending the holidays together. If you wanted the refrigerator, but the seller got it, you must get over it and rummage through ads for a great deal on a new one. A 30-year contract is like a marriage: It’s the art of compromise that gets you through it.
Know What’s Negotiable and What’s Not
The first thing which comes to mind, of course, is the price. We like to believe this is always negotiable, and perhaps, in most cases, it is. However, if the seller has had the place on the market for a while and lowered the price a few times already, they may not be as amenable to lowering it much more.
However, there may be other fixed price items where they may concede, such as covering closing costs or deducting the cost of a repair that you would have had to cover after the sale. Make sure you also know what appliances are staying it the house and which aren’t. If negotiations on the sale price and other items come very close to what you want, the real estate broker or seller’s agent may lower their commission amount if it’s possible to make the numbers fit for all the parties.
All the fees required for the sale in your state of residence are not negotiable, and you will have a much easier day of closing if you know all those up front.
Be Careful About What You Say
Just as in a chess game, you may not want the other player to know exactly what you’re thinking. Keep in mind the higher the selling price, the higher the commission for the real estate agents involved, so knowing you would consider paying more than your initial offer can be tempting to those who only make money when the sale is done.
Obviously, it just makes sense to keep your highest offer to yourself and only go down that road if you must. Agents will tell you offers can be rejected, counteroffers can be made, and the search can continue any time if it’s necessary. In the end, you don’t want to blame them for paying more than you wanted, especially if you revealed the amount.
Most People Don’t Stay
Only 33% of Americans stay in their home more than ten years, with an average length of stay being less than six years. With this in mind, you’ll want to heavily consider resale value.
You love your home, but things happen. Families grow, jobs take us elsewhere, or we find something better suited to us after our first home experience.
Reselling is easier in growing neighborhoods with solid schools and opportunities for new businesses to thrive. Even if you’re single or an empty-nester, you’ll want to get some investment out of your property when you, like most people, sell your home quicker than you thought you would just a few years before.
Invest in a Qualified Inspector
Your mortgage company will have your new home inspected before they’ll finance, but it’s critical you know everything about the house before even considering an offer.
The inspector you hire doesn’t work for anyone but you, and their quality will be evidenced by their education and certifications. They don’t come cheap, but once hired, they’ll crawl everywhere through the house looking for items that you can list as “must be addressed” for the seller to fix or stipulate funds in the final sale for fixing. This will give you the upper hand and the clear sense of safety that a floor joist isn’t ready to give way or some water damage to drywall isn’t compromising your shower wall.
Once the deal is done, you should celebrate. Being a homeowner brings with it a whole new sense of independence and pride, and you can now begin the much more fun part of buying a home: making it your own. Next, host a housewarming party. Your friends may not show up for you on moving day, but you can bet they’ll be there when you host your very first barbecue in your own backyard.
Images used with permission, courtesy of www.dreamstime.com and www.bigstock.com