Dream Home Found - What's next?

 You have just found your dream home online, at an Open House or maybe a drive by.

Now what?

Hiring an Excellent Agent

     How do you hire an excellent Real Estate Agent who meets all the criteria and has the right qualities? A real estate agent is one that deals in house, property buying and selling.  These agents are aware of properties in the area that are available for sale.

     They will be informed of everything you need to know about the property. The first step to finding an excellent agent is to contact one. Interviewing an agent will help you find the match you are looking for. The purpose of an interview should be to check the qualities of an agent. Is this agent the right fit for your home buying process? Do they have the qualities you are looking for in an agent? Are they honest, trustworthy and will they have qualities such as ethical behavior, moral aspects, working capabilities, ideas and motivation toward the work.

Interviewing an Excellent Agent

     After confirming the agent is legitimate and ethical, it's helpful to list the qualities and downsides of the agent. This will be helpful in making a final decision. If the agent meets your demands and requirements for the work, then you should schedule a meeting. 

     Contracts are an important step in the agreement between you and the agent. The contract will protect you from any violation of rules or regulation on the agent's part. It will also allow you to void the deal if your needs are not met according to the contract.

     After these steps, tell your agent about the requirements of the property you wish to purchase. Giving your agent certain housing requirements will allow them to find the perfect home for you.

Do's & Don'ts in Negotiations when Buying a House

     You visited dozens of open houses and met with builders and sellers. You looked for the ideal neighborhood and searched for the best available offers. Now you have finally found the property you are willing to pay for. Or maybe you were lucky or maybe love at first sight and now you are eager to close the deal as soon as possible.

     In any case, welcome to the most valuable and challenging process of home buying - the price negotiations. First of all, start with your financial status estimation and available options of financing. If you are a first-time home buyer, there will be a federal programs and state loans to help you with down payment and mortgage interest rates. Usually you know how much money you wish to spend. Considering all of the opportunities will give you flexibility during the negotiation process.

How to Make your First Offer the Best Offer

     Making your first offer is an important step that needs a significant amount of preparation and analysis. A lot of components should be considered when submitting the proposal to the seller.

     One of those components is a comparative market analysis, which is a mathematical model to find out the value of your future home. It calculates the basic conditions such as number of bedrooms, bathrooms, existence of the yard or swimming pool. Then it compares your potential home to similar recently sold houses in your market area. This model will give you an idea of the average basic cost, which will be fundamental for your offer.

     Then research the market trends: is the market going up for down? Do people buy or sell more? Are there any houses being built that will soon be on sale? All of those calculations and forecasts may take quite a lot of time, but they will leave you with several options to consider and choose from. For these cases, the real estate agent's services will be very helpful. Besides, she is a professional. It will not take much time for her to evaluate all the pros and cons and come to you with a proposal. 

     Your real estate agent must assist in this process and normally helps to decide on a few things. She will help you figure out how much money you should offer and which factors may or may not be in your favor. After you agree on a price, the agent will send the proposal to the seller's agent. The sellers will either accept the offer or present a counter-offer. Then, negotiations will go back and forth until you settle and reach an agreement. After that, the home buying will move into escrow. Remember that all the agreements must be in writing, as your accepted offer will become part of the purchase agreement.

Negotiation the Price: Which Tactics to Choose

     The goal of your negotiation is to buy a house for the amount of money you are willing to pay. Think of the highest maximum bid that you can afford and do not every offer more. It is also good to research why the owners are selling the house. Do they want to sell it because they are moving for a new job? Has the property price been reduced due to an extensive time on the market? 

     In both cases, it is likely they will want to sell quickly. You can stand your ground if they have a counter-offer. If the house has been listed several times with a stable price, it is a sign the home owners are taking their time and may be waiting for the highest offer. Depending on what kind of market you are in, strategy and tactics will vary. In a buyer's market you have more possibilities to succeed. You can make a less than reasonable offer, demand for some house improvements, better closing date and even closing fee payment by the owner. In a seller's market you have less leverage as you are not the only one in line. You are most likely to succeed by offering a seller's price. If he does not get it from you, he will receive another offer very soon.

     It is vital to understand that both the buyer and the seller may forget the final goal: to buy and to sell. Sometimes the parties get carried away in a battle of negotiation. Lock your eyes on the ball, but at the same time be realistic in your expectations of the situation. The following tactics will hopefully help you stay focused.

#1. Use the Middleman

     Your real estate agent is your middleman to negotiate with your seller's representative. She should be your middleman and have a big influence in it. Using her as a buffer will save you time. She may also provide useful information concerning the sellers, their intentions, etc., which the other party will not disclose to you directly. 

#2. Play Good Cop, Bad Cop

     Like in all the movies, one of the buyers plays a person that is on the seller's side, another one plays a displeased party. In this way, you will be not estranged from the seller. This will let her know that you are working on the compromise and aware of her best interests. You can work with your agent for this as well.

#3. Wait for the Big Boss

     Occasionally, the buyer or seller may have a third party person (attorney, lawyer, professional friend of the family) look at and evaluate the offer and give his or her expertise. This is a chance to lower the seller's counter-offer and keep your positions. In addition, you will make the seller wait. This may make the seller believe you are considering other options.

#4. Be Curious

     Asking questions will reveal some valuable information from the seller. It might help to find reasoning behind the house sale. This could be your priceless leverage, if you do not know it yet.

#5. Consider Compromise

     If it seems you might lose the whole deal at one point or another, be ready to give away something during the negotiation. Compromise means you agreed in the end, but both of you left with a feeling that you met halfway.

#6. Focus on the Main Goal

     Remember your main goal: to get the house. Sometimes you will get stuck negotiating on minor details. It can be a good decision to wait until you come to an agreement on the main points, before proceeding.

How to Avoid Mistakes during Negotiation

     Whether you are buying a house for the first time, or just got carried away in the negotiation intensity, mistakes can happen.

#1. Be Nice

     No one likes rude people. Try not to offend your future seller during a house visit. For example, discussing all the necessary renovations and poor taste of the current owners may hurt their feelings. This may cause them to not want to sell their beloved house to you personally.

#2. Be Calm

     Never express too much of an interest. Most of the specialists agree that when sellers see how much you want this house to become yours, they won't accept your first offer. To avoid a counter offer, you should always play it cool, no matter how perfect this property is for you.

#3. Think like a Seller

     Take a different look at this situation. Imagine you have to sell this house in two, five or ten years. Will it be possible, or does it lack some basic features that the housing markets consider essential?

#4. Get Help

     Spending money on real estate agents and attorneys may cost you thousands. Be cautious with cheap services if they are significantly lower than the average market price in your area. This is an indication of their lack of the professionalism and may cause you significant losses in the future. Pick you agent/team carefully. Do not rely solely on yourself, especially if this is your first time going through the house buying process.

#5. Do Not Expect the Price to Get Lower after Inspections

     Bid lower than you can pay and make your final offer with the most comfortable price you can afford. Repairs after the inspection will most likely not cost the seller millions. Consider any future issues as a possible subject of renegotiating at some point. But you should still be ready to go through with what you have already signed for.

#6. Sign Cautiously

     Make sure you acknowledge all terms and realize all liabilities before you sign any documents. Once you sign the contract, there is no way to make amendments without renegotiating and signing a new one or an addendum.

#7. Calculate all Future Costs

     Budgeting is essential during the purchase. You will have to make payments to the agent and attorney. In addition, there are escrow payments, deposit and down payments. There is also the title search and insurance, among other things. You definitely need to estimate your abilities your abilities and decide for yourself if you can manage it.

What if there are Multiple Offers?

   In a seller's market, you will probably have competition for the house you wish to buy. Sellers might be considering several offers at the same time. They will make their decision based on the best offer. They may also choose to play with one potential buyer and only send counter-offers to them.

    You as a buyer will never know. There are main point on how to stand out from multiple offers. The best way to protect from failing is to make your offer better than the others. Usually your real estate agent will be able to tell if there is a chance for the multiple offers. This is help you plan and act accordingly. 

     Receiving a pre-approval for the mortgage will be a good start to becoming the best potential seller's choice. This is a statement issued based on your credit report, bank statements, etc. It shows your ability to pay for your possible purchase. Also, let the seller know the financial options that you have. Some mortgage conditions and funding programs are more attractive and may influence the seller's decision.
     Bid close to his price, there is not much sense in offering significantly less than he wants in a selling market. Doing this you will save you time on the continuous counter-offering process.
     It would be helpful to review the contingencies list. The fewer clauses you have there, the more attractive your offer seems to the seller. However, it is recommended not to remove the home inspection. This means the seller will not be liable for any uncovered issues with the house, and you will have to pay for the repairs on your own. Showing your intentions by making a large, good faith deposit and down payment will usually convince the owner of your commitment. This may finally tilt the balance towards your proposal.
     Negotiating the price is a very stressful period in a house buying process but can be made easier with proper guidance from your agent. Keep in mind that the owner is interested in selling his home, and you are willing to buy it. With a little time, effort and guidance, you will be able to acquire your new home and "Love Where You Live!"

Tara Belanger, Real Estate Professional
Watson Realty Corp
904.501.9037
Tara@NortheastFLLiving.com
www.NortheastFLLiving.com
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