5 Powerful Buying Strategies
1. Don’t Get “Pre-Qualified”, Get “Pre-Approved”
- Do you want to get the best house you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or a quicker closing date, are critical to a seller.
- The way to make a strong offer today is to get “PRE-APPROVED”. This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property.
- The “Pre-Approval” is VERY POWERFUL and a weapon I recommend all of my clients have in their negotiating arsenal.
2. Sell First, Then Buy
- If you have a house to sell, sell it before selecting a house to buy! If you don’t sell first, the seller may figure that’s a risky deal, since he might pass up a buyer who DOESN’T have to sell a house while he’s waiting for you. So he says OK, he’ll do the contingency, but it has to be a full price offer! So you see, you paid more for the house than you could have because of the contingency.
- Now you have to sell your existing house, and in a hurry! Otherwise you lose the dream house! So to sell quickly you might take an offer that’s lower than if you had more time.
- The bottom line is that buying before selling might cost you TENS OF THOUSANDS of dollars. I always recommend that you sell first, then buy.
3. Play the Game of Nines
- Before house hunting, make a list of nine things you want in the new place. Then make a list of the nine things you don’t want. I call this “NINE OF THIS AND NONE OF THAT”.
- You can use this list as a scorecard to rate each property that you see. The one with the biggest score wins! This helps avoid confusion and keeps things in perspective when you’re comparing dozens of homes.
- When house hunting, keep in mind the difference between “SKIN AND BONES”. The BONES are things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan. The SKIN represents easily changed surface finishes like carpet, wallpaper, color, and window coverings. Buy the house with good BONES, because the SKIN can always be changed to match your tastes.
- I always recommend that you imagine each house as if it were vacant. Consider each house on its underlying merits, not the seller’s decorating skills.
4. Don’t Be Pushed Into Any House
- Your agent should show you everything available that meets your requirements. Don’t make a decision on a house until you feel that you’ve seen enough to pick the best one. Review the Multiple Listing printout with your agent to make sure that you are getting a COMPLETE list.
- In the early 2000′s, homes were selling quickly, usually a few days after listing. In that kind of market, agents advised their clients to make an offer ON THE SPOT if they liked the house. That was good advice at the time.
- Today there isn’t always this urgency, unless a home is drastically under priced, and you’ll know if it is. Don’t forget to check into the SCHOOL DISTRICTS of the area you’re considering. Information is available on every school; such as class sizes, % of students that go on to college, SAT scores, etc. You can get this information from your agent or directly from the school.
5. Stop Calling Ads!
- A word of caution – some agents create ads solely to make the phone ring! Many of the homes have some drawback that’s not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What’s not mentioned in the ad is usually more important than what is.
- Remember that the person writing the ad is representing the seller and not you! The most important thing you can do is having someone on your side looking out for your best interests. Your own agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about.
- So whether you decide to work with us or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer’s broker. Then you become a client with all the rights, benefits, and privileges created by this agency relationship, and you’re no longer just a shopper.
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