Amanda's Blog

I found this on Daily Real Estate News | Thursday, May 03, 2012. I thought it was very important information and should be shared. I welcome feedback.

 

With signs of a housing turnaround getting stronger, housing experts say buyers are finding several recent changes when they go to put in an offer on a home. A recent article at U.S. News & World Report highlights some of these changing “rules” for your home buyer clients:

1. Lowball offers won’t likely stick: Sure, deals are still around, but lowball offers that aren’t in line with comparable sales data are increasingly proving to be a waste of time. Buyers may be better off asking for seller concessions, such as closing cost assistance or making home repairs, rather than making offers way below the asking price. “Keep in mind that a lowball number may turn off the seller and close down any chance at negotiation,” the U.S. News & World Report article cautions potential buyers.

2. Get pre-approved: Getting a loan isn’t easy nowadays as lenders have tightened their credit standards in recent years. Serious buyers should check their credit and get pre-appoved for a loan to determine how much of a home they can even afford even before they start their home search.

3. Get realistic about the market: Real estate agents can show buyers comparable nearby sales to help educate them about local market conditions. Transactions from the last six months are the most important. Another important piece of information for buyers is knowing how long properties are staying on the market.

4. Expect some competition. Housing inventories are dropping in many areas and spurring an increase in demand. Home buyers may face increased competition for the home they want, particularly among short sales and foreclosed properties, in which they may be up against investors who are making all-cash offers. That’s why experts say it’s important bank-financed buyers know their financial situation in advance to better compete.

5. Conduct property research: Real estate agents will help guide clients on what all they need to do when they find a property they like, but one important step nowadays: Buyers should hire a title company to check for any liens or tax arrearages, the article notes. Housing experts also recommend hiring a home inspector, verifying the accuracy of the property line (by asking seller for the survey or having your own conducted), and make sure all necessary disclosures about the property, required by the state, have been made.

In working with buyers, I am often asked why or if it is important for them to get pre-approved. The answer is that is it always important and always preferred. This article will stress the different reasons one should be approved.

The first reason one should be pre-approved is that it helps establish a comfort level. Notice I did not say a qualifying level. Yes pre-approvals do tell you what loan amount you can qualify up to, but is that the most important thing they do? No. The most important thing pre-approvals give us is a comfort level. You may be able to qualify for a $200,000 loan but the payment may force you to make sacrifices you aren't prepared to make. So based on the qualifying amount, you can determin your comfort level. The amount that you can comfortably afford to borrow and still do the things you like to do. Remember our contracts do not say that your offer is contingent upon you liking your payment but that you can borrow that amount of money.

The second reason is that it helps determine what loans you can qualify for. Not every buyer can qualify for every loan and not every home can qualify for every loan. With each loan type there are certain procedures, paperwork and costs associated with that loan. It is better to know up front what your challenges and procedures are going to be instead of trying to re-work and existing contract. Changes in loan types during the contract period can cost the buyer, seller or both more money and can cost you the home of your dreams.

Third, it helps you focus on the homes that you can both afford and are comfortable with. There is nothing worse than finding the right home that has everything you wanted and not being able to get it. At that point, it will be hard to find another home that will make you as happy. If you keep to your goals established by your comfort level, you will be much happier long term.

Another reason to get pre-approved is there may be a slight glitch in your credit that needs to be addressed prior to closing on a home. Sometimes this can be handled quickly and sometimes it may take a little longer. Knowing where you are helps address where you want to be. This gives both you and your lender time to take care of anything that may delay your closing.

Lastly and most important for the seller, a pre-approval letter tells the seller you are serious. You have taken the time to get your pre-approval letter and are committed to buying this home. With all of the credit issues out there today, this helps ease their mind that if they sign your offer and take their home off the market for you, that you will be able to purchase their home. There are too many buyers out there for a seller to spend time on someone not pre-approved.

I hope this explains the need for all parties involved. I have several lenders that will work with you on getting you pre-approved so call me today at 615-406-9988.

 

Some of you may have noticed that over the past year I have started listing Fannie Mae foreclosed homes. During this time the number of foreclosures have increased dramatically. For a limited time, Fannie Mae is offering a special incentive to buyers.

Have you ever heard of Absorbtion Pricing? This is a not so new way of pricing your home. Many agents are still using CMA's (Comparative Market Analysis) when valuing your home. This is still a great way to value your home, but it is not enough anymore. Absorption Pricing takes a look at how many homes similar to your home have sold within the last 3, 6, and 12 months.

Don’t worry, this doesn’t have to be a time-consuming project. Here are some easy improvements you can make to boost your curb appeal – all in just one weekend.