HOMEBUYER'S FAQ (Top 4)
What is the first step to buying a home?
Answer: Make sure you are ready - psychologically
and financially. Ask yourself the following questions:
Do I have steady income? Is my debt lower than
my total income? Do I have enough money to pay
for the down payment and closing costs? Am I working
hard enough to improve bad credit? A house needs
constant care and attention. Also ask yourself
if your budget will allow for unexpected repairs
and upkeep. Once you can honestly answer "yes"
to these questions, you are several steps ahead
of the game and that much closer to becoming a
homeowner.
Question: What are some negotiating tips?
Answer: Know the seller's motivation
to sell. This will enhance your negotiating position.
Sellers who must move quickly due to a job transfer,
divorce, or contract on another home, are more
inclined to accept a lower price to speed the
process along. Remember, too, that the listing,
or asking, price is what the seller would like
to receive for the home. It is not necessarily
what the seller will settle for. So know value.
Before you make an offer, check recent sales and
listing prices of comparable neighborhood homes
and compare them to the seller's asking price.
Other tips:
• Be flexible. Never say,
"take it or leave it." That can sour
negotiations and ruin the deal.
• Never show your hand or reveal your next
step.
• Each time you increase your offering price
ask for something in return, such as repairs,
appliances, even lawn furniture.
• If you plan to pay cash or have a tentative
commitment for a loan, use your strong financial
position as a negotiating tool.
• Don't let emotions such as pride, fear,
love, and anger get in the way of negotiating
the best deal. Leave irrational feelings at home.
Question: What contingencies should appear
in the offer?
Answer: When you look to purchase a home,
anticipate potential problems. But protect against
them so that if something does go wrong, you can
cancel the contract without penalty. This is what
contingencies allow you to do. They should be
included in any offer you present to buy a home.
Most offers include two standard
contingencies: a financing contingency, which
makes the sale dependent on your ability to obtain
a loan commitment from a lender, and an inspection
contingency, which allows you to have a professional
inspect the property.
Without contingencies, a buyer
could forfeit his deposit under certain circumstances
if he backs out of a deal. The purchase contract
also should include the seller's responsibilities,
such as passing clear title, maintaining the property
in its present condition until closing, and making
any agreed-upon repairs.
Question: Is it possible to buy a home
below market price?
Answer: Certainly, but do not hold your
breath. It takes a lot of determination and time
to find a real bargain. But if you are adamant,
here are some likely targets to pursue:
• foreclosed property
• a fixer-upper
• hard-to-sell new homes in a housing development
• tenant-in-common partnerships.
With the latter, you may be able
to buy a partial interest in this form of title
to property owned by two or more individuals because
the partners often sell at a discount. However,
bargains are easier to come by in a soft real
estate market, when the economy is in a recession,
and when homeowners, and builders and sponsors
of condominium conversions, are desperate to move
unsold units.
