Thrilled you are at the prospect of living in your dream home. Depend
on your real estate agent for help in determining a suitable offer.
He or she will look at comparable properties that have sold recently in
the same neighborhood to help you settle on a purchase offer. Be sure the
"comps" your agent uses are up-to-date, for the market can
change over time, and prices can vary drastically from year to year.
Ask how long the property has been on the market. If it has been for
sale for a while, the owner may be more motivated than one whose home has
been for sale only a few days or weeks.
Your offer must not be too high or low. If it’s too low, you may
offend the seller. If it’s too high and an independent appraiser
concludes this, a lender may refuse financing. Look carefully at the
comparable sales in the neighborhood and make an educated offer.
It helps if you have a "prequalification letter." This is a
document from your lender that essentially assures the seller you have
already been approved for a loan of a certain amount. A prequalification
letter gives you an inside track with the seller and makes your offer more
attractive.
Negotiating a price for a house can be an emotional roller coaster. If
there’s a question, opt for the more conservative offer, planning to
fortify it if the seller balks. Think of the condition of the property. If
major repairs are necessary, your agent should inform the seller your
offer reflects that fact.
In any negotiation of this magnitude, there will be stressful moments
in the form of financial tailspins and dead-ends, end-runs and surprise
plays. If other buyers are bidding as well, it can become a confusing
poker game in which the seller holds the cards, and may be bluffing to get
the highest bid. Expect various tests of financial brinkmanship, and let
your agent run interference for you. Don’t be overly anxious.
When the telephone rings and the sales agent announces that your offer
has been accepted by the seller, you may want to break out the champagne—but
resist. There are still obstacles to avoid before a signed and sealed
agreement lands in your hands.
Some homes look beautiful, glistening with new paint, redolent with the
scent of new carpet and clean, new flooring; but these cosmetic flourishes
may hide serious flaws that will come back to haunt you once the deal has
closed.
Home Inspector
Once the seller has accepted your bid, it’s a good idea to include a
clause in your Purchase and Sale Agreement called "an inspection
contingency." This part of the contract requires the seller to repair
any deficiencies, or would allow you to cancel the contract if defects are
not remedied. Set a realistic closing date of between 30 and 60 days to
provide time for a professional home inspection.
Ask the home inspector to check the structure, roof, exterior,
electrical, heating, cooling and venting systems, and any appliances that
come as part of the purchase price.
A Florida Realtor explained why she likes her clients to hire
inspectors. In one case a couple wanted to buy what they thought was a
gorgeous, beautifully maintained house that was only eight years old. It
seemed perfect, but just to be sure, they hired a professional inspector.
Almost immediately, the inspector found problems. The house suffered
from serious roof damage - the roofing had been incorrectly laid, was
slipping off the structure and, they soon discovered, the house was one of
several properties involved in a lawsuit against the builder. The
potential buyers were well served to know the facts.
Occasionally, a seller will finance the inspection, which provides
confidence in the property you might not have had before; but if the
seller doesn’t offer to do it, hire a home inspector yourself. Usually
your real estate agent will recommend several inspectors; the best are
members of national professional organizations, such as the American
Society of Home Inspectors (ASHI), 1-800-969-2744.
Home inspectors are licensed to ensure expertise; however, some may
offer additional knowledge because they are licensed general contractors
as well. Check the inspector’s references. Look for someone thorough.
Ask your real estate agent for copies of inspections done for other
buyers, and contact them for recommendations. A contractor can tell you
about every aspect of the structure - not only what is wrong and what
needs to be fixed, but what has been done incorrectly and whether your new
home meets area-building codes. The cost of home inspection is based on
the square footage of a house and whether there is any extra crawl space
that needs attention. If serious repairs are necessary, most agents write
purchase contracts that set a certain percentage of the purchase price for
repairs, a highly negotiable part of the sales contract.
Once your inspection is complete, and you are satisfied with the house,
your agent will finish the paperwork, and you’re on your way. But now is
still not the time to break out the champagne and fast-forward to serious
fantasizing about your dream home. You still have a few more tasks to
complete.
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