Whether you’re a seasoned veteran of the housing market or an ambitious first-time buyer, it’s extremely easy for a seller to catch you off-guard in the heat of a bidding war or distract you from asking the important questions.
Below, we’ve assembled the most important things that a home seller might be hiding from you. Remember, sellers are leaving their house for a reason. While it may be something as simple as a need to downsize or relocate, you won’t know unless you stay assertive and find out what you are getting yourself into.
- “This House Is Just Like New!”
There is no thing as “just like new.” It’s new, or it’s not. Because homeowners are want to demolish their homes and start from scratch, many simply decide to patch things up with small improvements, giving their properties slight facelifts. So when faced with your question, “How old is this house?” they might instead point you to the newly restored fireplace or the brand new kitchen appliances. Don’t buy into their distractions; make sure you get a clear, straightforward answer from the home seller.
Why is their answer so important? First and foremost, their answer lets you know how much you should plan to invest in your new home. Even a new home will require some investment, but older homes carry heftier price tags and longer timelines for construction. If a house is between 10–20 years old, expect a possible windfall of necessary upgrades to moldy roofing, decaying tiles, and old boilers. When in doubt, hire an inspector that you trust to look at the building’s structure. (Don’t trust the buyer’s or real estate agent’s guy in order to avoid a conflict of interest.) And while a little renovation never hurt anyone, as a buyer, you need to understand what the specific costs of your purchase will be.
- “The Fees Are Non-Negotiable.”
The truth is everything is negotiable. From the home prices, inspector fees, agent commissions, and layer fees, it’s easy to miss out on a potential money-saving deal.
Because buyers will often deal with selling agents instead of the actual homeowners, it’s important to know that their commissions fee (and that of your own agent) are entirely negotiable. According to Consumer Reports, 63% of agents surveyed admitted that they worked on negotiated fees at least half of the time, lowering fees from the standard rate of 6% to 4% or below. Before agreeing to a commission rate, shop around and let your agent know it.
- “The Price You See Is the Price You Get.”
A common power play by sellers is the indication that negotiations will not be happening. In general, Americans are shy when it comes to negotiating costs, but sellers in the housing market typically list properties well above what they expect it’s actually worth. It’s a common strategy taken straight from the savvy seller’s playbook. Often times, a seller will overprice their home just to see if the market will take it. For them it is a balancing act. Too low, and a seller may lose money on their investment. Too high, and the seller risks alienating their entire market.
Don’t always believe the hype, though. Even in the most volatile markets, it’s hard to believe that every home you see is just on the verge of being bought. Theoretically, perhaps. Realistically, no.
The best strategy here is transparency. Let the seller know you’re shopping around for what is right for you. Maybe you have found larger sized houses in the area for less money. Maybe you spotted an unforeseen damage to their house that would cost extra money to repair. Let them know you’re a smart buyer who has done your research and isn’t not to walk away.
- “Good Bones Are All That Matter.”
In our searches for the right home, we tend to only focus on the bones of a house instead of what surrounds it; however, those peripheral factors become all too important once you move in. Sure, no one notices the good, quiet neighbor, but you’ll certain notice the loud, obnoxious one. Definitely do some snooping around the neighborhood. You may feel like a crazy person, knocking on the doors of strangers, but it will pay off if you can avoid any red flag signs of a bad neighbor (unkempt yards, shouting, smells, etc.).
Similarly, take note of what season you are seeing a house in. Shaded by a couple large trees, the house may feel perfectly cozy in the summer, but who knows, in the winter you may be living in a frigid igloo. Heat may not be distributed evenly throughout the home’s rooms. The air conditioning might be on the fritz! To stay on the safe side, it is a good idea to hire an inspector to investigate the home energy system of a house. On a similar note, ask home owners for proof of regular pest-control treatments. Nobody wants bugs.
- “You Have to Buy Your Dream House.”
When you’re stuck in the hurricane of insanity that is the housing market, it is easy to get emotionally attached to every home you see. And every home you pass on feels like an affront to your aspirations. Will you ever find the right place? The short answer: yes, but maybe not right now.
As you become more familiar with the housing market, you will learn how to manage expectations. The key maxim here is to buy as much house as you need, but no more than that. While the previous idea was to get a starter home and upgrade to a bigger house in 2–3 years, today’s buyers are looking at a decades-long commitment. Of agents surveyed by Consumer Reports, 33% said that customers often put themselves in more financially untenable situations by underestimating the costs of home ownership. It’s more than a monthly mortgage when you include the additional fees that you will owe in taxes, utilities, and others. Biting off more than you can chew is dangerous. It’s honestly better to get a bigger picture of the market before you move on a home. Rushing into a deal rarely leads to success. So remember, even if you have submitted in application or a bid, you can always back out.
from Total Mortgage Underwritings Blog http://ift.tt/1OzYEmL
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