Tag: home inspection

3 things you can do this week to get closer to buying a home

Many Americans are putting their home purchases on hold over the uncertainty about the housing market. While we don’t recommend trying to time the market, it’s certainly understandable that some folks are a bit trepid right now.

Even though you may not be actively looking at homes to purchase right now, there are things you can be doing so that if the opportunity arises you can jump right into the market. Let’s take a look at three of those.

1. Talk to a lender

Sure, we hear a lot about cash buyers but most need a mortgage to buy a home. Get the process started by calling or visiting a lender. Family and friends, colleagues and real estate agents are good go-to sources for names of trusted lenders.

Although the initial consultation is typically quick and involves some number crunching and a list of paperwork you may need to submit, you’ll hopefully find a lender who will take some time to walk you through the process. Check out “The Smart Way to Shop for a Mortgage Lender.”

Some lenders can also counsel you on improving (or maintaining) your credit score over the next couple of months until you’re ready to buy. If not, read up on the process at MyFico.com.

Requesting loan preapproval offers real benefits, including saving time by not wasting it looking at homes you can’t afford.

In addition, “Sellers are looking for pre-approved buyers. Many prefer to entertain offers only from pre-approved buyers,” according to the pros at Capital Bank Home Loans, and we agree.

Finding out where your finances stack up in home loans is always a good idea, so this is an important step.

Preapproval from a lender is imperative, especially if you are close to being ready to buy.

When you call or visit a lender, ask all your questions, regardless of how basic you may consider them. This includes:

  • Current interest rates
  • Is a government-backed loan or a traditional loan the best choice for you?
  • Should you go with a fixed or adjustable-rate mortgage? If you don’t understand the difference between the two, ask.
  • Which down payment assistance programs are available to you?

2. Talk to a real estate agent

Retaining a real estate agent to help you buy a home is never too early. We are happy to offer you counsel on what to do right now to make you market-ready should the occasion arise sooner than you’d thought.

Sitting down with us briefly may give you insight into the current market, expectations for the future market, and other real estate-related topics you may not have considered.

Then, be sure to regularly visit our social media platforms and blog. We post a lot of educational content that you may not find elsewhere.

Some questions you may need the answer to when we get together:

  • Which banks or lenders are best for the homebuyer
  • Can you set up your home search criteria on the website so that you can regularly search for homes for sale?

3. Internet search

Speaking of searching, the sooner you start, the more familiar you’ll become with the process.

Internet searches can help you narrow down your choice of neighborhoods, the prices there, and the types of homes.

Doing drive-throughs of neighborhoods will also help you narrow down the choices. Then, when the time is right, you will have several neighborhoods on which to focus and won’t waste your precious time on those you don’t like.

Three small steps with huge rewards when the time comes to buy your home.

Reach out if you’d like to set up a meeting. We love to talk about houses!

 

Negotiating with the buyer after the home inspection

Negotiating the successful close of a home sale begins with price and contract terms and doesn’t end until the deal closes.

One of the most frequently negotiated items, after the aforementioned price and terms, has to do with the home inspection results. They’re also among the most contentious negotiations.

Very few home inspections are “clean,” meaning there’s not a thing wrong with the home. And, many of the items mentioned in the reports are minor.

Your real estate agent will counsel you on how to deal with buyer requests for repairs. But, it helps to know why he or she is making certain suggestions.

When you know how to choose your battles, and why, you’ll understand this negotiating process.

The 3 most common types of requests

When homebuyers find items in the home inspection report that they want fixed, their agents typically counsel them to submit one of the following requests:

1. Ask the seller to make the fixes

This method may delay the transaction and, depending on the extent of repairs or replacements required, and the deal the buyer made over the price, the buyer runs the risk of the request being denied.

One thing you, as the seller, should know,  is that the buyer’s lender may require certain fixes before final approval of the loan. These include issues regarding the home’s safety, structural soundness and to remedy building code violations. Expect to make all of these types of repairs.

2. Ask the seller for a credit of the funds required to make the fixes

While an adjustment to the closing date may have to be made (depending, again, on what’s require to get the home where the buyer wants it), this method is quicker than the first one.

A good buyers’ agent, however will ask the buyers if they can trust themselves to make the repairs with the cash-back at the close of escrow.

Again, as the seller, be aware that certain fixes are required by the VA and by FHA, before the close of escrow.

Also, some lenders and some types of loans forbid a cash credit at closing.

3. Ask the seller to lower the price of the home

Buyer agents will suggest to their clients that they may want to request a price reduction to compensate for the cost of needed repairs.

What you should never agree to fix

It’s amazing to me how old, ugly and scary a home inspection photo of an electrical outlet wall plate can look. Each smudge, every crack and that itty-bitty- chipped-corner, when resized to enormous proportions, makes it look like it’s ready to eat the house.

The real estate agent for the buyer that insists that the seller replace that piece of plastic or that the seller buy and install a globe lightbulb in the outlet over the front porch, should counsel her client that

the inspection report is not a repair list for the seller

Typically, repairs to rectify cosmetic issues can be safely ignored. Lender-required fixes, on the other hand, should always be performed.

Even if this particular buyer walks away, these fixes are now a disclosure item and other lenders will most likely demand them.

During a fiery sellers’ market, you are in the driver’s seat and can safely ignore most of the more trivial requests. In a buyers’ market, however, you may have to take a deep breath and carefully consider caving to the buyer’s wishes.

You don’t have to follow the buyer’s agent’s script

If the items on the buyer’s fix-list aren’t of a safety, structural soundness or building code violation nature, you are under no obligation to respond to the buyer’s preferred remediation method.

In other words, you don’t have to offer a credit, make the fixes or lower the price of the home. You have options, too. Some of these include:

Hold back personal property

If you won’t be taking your appliances with you when you move, don’t automatically include them in the sale. Hold them back to use as bargaining chips during the negotiating periods, such as over price and repairs, suggests Realtor.com.

Instead of lowering the price of the home or making non-essential repairs, offer to throw in the appliances.

Offering a home warranty

Offering a home warranty is a win-win way to address those requests for replacement of an item that, although it may be nearing the end of its functional life, still works.

An aging water heater, for instance, may concern the buyer. A home warranty might ease their anxiety and save you money in the process.

As always, consult with your real estate agent about all possible responses to a buyer’s request for repairs.