Aim for pre-approval versus pre-qualification
If you are looking to get the best house at the most reasonable rate, you need to show them that you are in a good negotiating position. There are several factors involved in a transaction. Price is one of them but not necessarily the most important. What matters more are factors like the length of escrow and the buyer’s buying power.
I used to suggest that buyers get pre-qualified by a lender. To be pre-qualified, a lender will ask you a few questions. Based on your answers, the lender will declare that you are pre-qualified. You are then issued a certificate stating this which you can show to the seller. The problem is, sellers won’t buy this. Because they know that your answers were not validated. Some problems are eventually discovered like problems with alimony, a bad credit report, or other negative legal reports.
So the more credible way to show your worth is through getting pre approved. You can achieve this after all the information you gave out had been verified. When the process is done, this means you are approved for the loan. It can take days or weeks to process. Once you’re pre-approved, you have established a strong negotiating position.
Sell before making a purchase
If you’re trying to sell a property so you could afford to buy another property, sell the property first. It is better to have cash in hand or clear funding rather than going into contingency sale. Why? Because you’ll end up paying more for the property you want and will give you pressure to sell your current property. Think about this: You found a house you want to buy. You make try to make a deal with the seller. Most likely they will agree to sell you the house. But since they are making a big risk by reserving the property for you even if you don’t have the money yet, the seller will let you pay full price and you’ll be pressured to sell your property before the deadline. If there are no potential buyers in sight, you’ll be persuaded to sell your property for a low price just to lure buyers and make the deadline for your new property.
If you’re worried that there is no prospective house for you, take time to look around. Think about a location you’d want to live in or look at houses so you’ll have an idea on the kind of house that you want. When you do put up your house for sale, add this phrase: `”subject to seller finding suitable housing”. This gives the buyer a picture of what’s going on and those interested will know that this is part of the deal. This gives you time to look for a new house. If you don’t find a new house that you want, don’t sell your current house.
Play the game of nines
Before you start looking for a new house, think about the things that you want and don’t want in a house. Take this list with you every time you see a new house. Use this list to evaluate each potential new house. This list will be very helpful when you’re having a hard time deciding which house to purchase. When evaluating a house, make a clear distinction between style and substance. Substance refers to things that cannot be changed, like the location, the neighborhood, popular landmarks, lot size and floor plan. Style means elements in the house that can be removed or changed. So this could be curtains, furniture, paint, wallpaper and carpet. Since based on our description, it’s sound to say that you should make a decision based on substance and not style. You may not like the current style of the house but remember, they are something you can adjust to your liking. I always tell the buyers to imagine that the house is empty. Do not forgo a good deal just because you don’t like the former owner’s taste.
Don’t buy a house just because you feel pressured
A good agent will show you properties that meet your requirements. Do not settle on a house until you’ve thought about all your viable options. Ten years ago, houses were easily sold. So deals had to be made fast. If their client wanted a house, they were advised to make an offer right away. But that is no longer applicable today. There is no urgency requiring fast deals.
It’s also a good idea to check school districts in the area of the house you’re looking into. All the information you’ll want such as class size, SAT scores, achievements should be available in the school. You could also get this information online.
Do not fall for ads
More often than not, ads leave out the unpleasant parts Their sole purpose is to lure people. They are paid for by the seller and therefore they will only look after their advantage. Your best protection is to hire an agent. They can check the property thoroughly. They know things that you don’t and they are there to look after your interests. Choose an agent that you’re comfortable with. As their client, you will have access to all the rights and privileges that they have to offer. As buyer your options will no longer be limited to those that are publicly advertised. When they hear of a great deal, they notify their clients. Being their client, you have access to great deals that is usually not advertised.
If you want to get the best property for your money, I strongly suggest you get an agent to help you.