Last night I was watching a show about a couple trying to find the perfect home. It was filled with all kinds of drama. “Will we ever find our perfect home”? They did.” Will our offer get accepted”? It did. The tension was palpable. As a realtor I find those shows about real estate make buying and selling a home look either like a piece of cake or like making a deal with the devil. The reality is somewhere in between. Of course those shows never tell you the most important things about buying or selling real estate.
I wanted to share a few things with you to hopefully help you out the next time you are in the midst of a real estate transaction.
The most important thing to remember in my opinion, is whether you are a buyer or a seller is that these are legally binding contracts that you are entering into. This isn’t a time to fudge numbers to get a bigger mortgage or to cover up a leak that happened several years ago in the basement. The truth always comes out and when it does it can be a nightmare. Have I scared you yet? I don’t mean to. I just want to impress upon you the importance of having a game plan before you buy or sell and how to avoid a potential legal mess. Here we go…
Lets start with the buyers.
Buying a home is a big deal. For the majority of us it will be the biggest purchase we will make in our life time. So lets talk about how can you make sure that the transaction goes smoothly and that you get the home of your dreams.
The first thing a buyer needs to do is talk to the bank. Getting pre approved should always be the first step in the home buying process. When you contact your realtor about viewing homes they will most likely ask you if you have been pre approved and for how much.
Now here is what not to do…go shopping for new furniture, a car, or put any large purchases on credit. Many deals have fallen apart because buyers went on a spending spree before getting the loan documents signed. So please make sure that your loan has been officially approved, documents have been signed, and that the financing clause has been removed from your offer to purchase the home before putting anything (aside from your groceries) on credit.
Another important thing for a buyer to consider is their wants and needs. Make a list of what is important to you and show your realtor. If it is crucial that you have a three bedroom home, with a pool, and an eat in kitchen then let your realtor know so they can narrow down the search for you.
Of course as your search for a home goes forward your wants and needs may change, and that is okay. Just keep your realtor in the loop so they can do their best for you.
As I said before buying a home is a big deal. People get cold feet or have buyers remorse immediately after signing the offer. You wouldn’t believe the amount of times I have heard “what if it gets accepted?” in a panicked tone. Well isn’t that why you put an offer in? So you could buy the house? My final word of advice to a buyer is talk to your realtor. I mean really talk to them. Real estate is a fast paced game. One minute a house is for sale, the next minute it’s sold. It can be high pressure. Discuss your strategy with your realtor before putting in an offer. In fact discuss your strategy before you even look at one house together. Make sure that you are both on the same page. If you feel like your realtor might pressure you to buy something out of your price range, or they aren’t putting forth an honest effort to work in your best interest, then find a realtor who will do the job you need them to do.
Okay sellers now it is your turn…
Much like buyers the first thing you need to do when you start to think about selling is talk to your bank. How much do you still owe on your mortgage? Will there be any penalties incurred for selling before a certain number of years? Discuss with them what will happen if you find a home you love and want to offer on but your house hasn’t sold yet. Will you still qualify for a mortgage? Make sure that your financial needs are covered before you list your property.
Did you put a new roof on your house or re do the plumbing? Prove it. Keep all warranties, work orders, permits and receipts to pass on to the next owner and to prove that this work actually did happen. It’s easy to say plumbing was updated through out the entire house because no one can see through the walls. Buyers want assurance that renovations were done by a professional and that if something goes wrong they have a warranty, or at least the name of the company that did the work so they can remedy the situation.
Finally, the price of your home. Every seller has a number in mind when it comes to the value of their home. For the most part the value is subjective, meaning it has value to the seller but not necessarily a buyer. If you put a pool in for twenty thousand dollars you may feel that your house is now worth twenty thousand more then it would be without the pool. This might not be the case. Your house is only worth what a buyer is willing to pay for it.
This is where a realtor comes in. They can give you an objective view of your home. They have information on what has listed in your area, and what has sold. What market trends are like and how quickly homes in your area are selling. Listen to your realtor. They aren’t there to insult you by telling you a number that might be lower then what you thought it should be. You might think your home should list for a million dollars, but if similar houses in the area are selling at eight hundred thousand then there is a good chance that your house will be on the market for a very long time.
I hope these tips will prove helpful for anyone that is thinking of buying or selling real estate. While there is a lot of money and legality involved in these transactions it really doesn’t have to be a stressful,l nail biting experience as it is portrayed on television. It should be fun. It should be exciting, and most importantly it should be about you getting the home of your dreams.