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1. Get
“pre-approved”, rather than “pre-qualified”
1. Pricing
your house too high
Make sure you are in the strongest negotiating position by being pre-approved. Pre-qualification is a simple verbal application that the lenders have not verified. Things like judgments, alimony payments and glitches in the credit report can surface between getting pre-qualified and getting pre-approved. Take the time to provide your lender with all of your income and account verification so you can be pre-approved. This will also shorten the length of time you need to actually close on your new house.
Selling your existing house before you begin selecting a new house gives you a lot of benefits. You will be in the strongest negotiating position if you do not have to make the offer contingent on selling your home. You will also know exactly what your house is selling for and will know exactly how much money you have available for a down payment on your new house. If you are nervous that you will not find your new dream house after you have already sold your existing house, you can make the sale “subject o seller finding suitable housing”. This will give you the option to back out if you can’t find the new house that you want.
Before you even begin looking for a house, make a list of things that you definitely want and definitely don’t want. Use this list as a guide to rate each property that you see. This helps avoid confusion and keeps things in perspective when you are looking at dozens of homes. Also keep in mind the difference between “style” and “substance”. Substance are the things that you cannot change like location, view, size of lot, noise in the area, school district, and floor plan. Style represents the things you can change like carpet, wallpaper, color, window coverings, etc. A good pros and cons list will be made up of substance items, not style items.
Your agent should show you listings for every house that is available within your guidelines. You will then be able to narrow down the field from viewing those listings. You may even want to do drive-by’s to limit the time you spend going in and out of houses. This should give you a nice amount of houses to look at. Don’t feel like you have to buy a house after only looking at a few or that you need to make an offer on the spot. Although some houses do sell very quickly, you can usually have a day or two to think about it. You may want to ponder it for a night and if you are still interested, go back the next day for a second viewing. You will be more critical the 2nd time around.
Newspaper advertisements mostly try to sell a house with only it’s good attributes. You may end up spending a lot of time looking at houses that have a lot of drawbacks. Your agent will be able to pull valid listings for you that have a lot of information for you to make good decisions with. Your agent will also view the houses with you and will be able to point out any good or bad things that you might not see when viewing on your own.
You obviously want to make the most money you can when selling your house. However, a high listing price will discourage some great prospective buyers from even looking at your house. Also it may lead other buyers into expecting more from your house than what it has to offer. Houses that are priced too high usually take a long time to sell and end up selling at a lower price anyway. When you are ready to sell, your agent should provide you with comparisons of houses like yours in the area that have sold within the past year. This is the best way to determine a good selling price. Also be aware that if you have done a refinance recently, the appraisal price may be unreasonably high and should not be used as a basis for setting a good selling price.
Because you will be moving out of your house, you may be tempted to leave all of the little fix-its that need to be done around your house. Unfortunately, buyers will look at the undone repairs as a general way that you took care of the house while you owned it and will probably offer a lower price or be turned off altogether. Also, other buyers will only buy a house that is ready to move in to without any minor repairs.
It is very important that you understand all of the details of your real estate contract. They are legally binding documents and should be reviewed thoroughly with your agent. Offers for your home can often contain contingencies, inspection fees, repair costs, cash back or paid closing costs. Spend the time to read though them. |
