What Every Buyer Should Know; and Embrace

The more you’re prepared as a Buyer, the better your experience will be– it’s like any other purchase that way. Of course the major difference when it comes to a home buy, is the price point. A client put it to me this way some years ago, “Botch a car purchase negotiation, and it might cost me a couple thousand dollars; do the same thing on a home purchase, and it could be ten times that amount or more.”

So true. One of the best ways to mitigate that possibility; interview your real estate agent first. The better agents will welcome this. It also shows that you as a buyer are invested and involved, and are not approaching what is a very important process, casually.

Here are some of the most helpful questions you can ask; related to both the property itself, and the neighborhood where the property is located.

The Property:

1) How long has the property been on the market?
The length of time a property has been on the market may indicate the seller’s willingness to negotiate. As of this writing, good properties that priced correctly are not staying on the (Southern California) real estate market very long at all. The real good ones are gone in less than a week; usually with multiple offers.

2) Have there been any price reductions during the listing period?
Consider this one along with Question #1. The amount of any price reduction, as it relates to the overall purchase price, may indicate the seller’s desire to attract an offer. Sellers who make price reductions that are fractions of a percent of the list price are not motivated.

3) Have there been any other offers on the property?
Many times the answer to this will be a simple yes or no from the listing agent, with no further detail. even if that is the case, knowing whether a seller has entertained offers will be helpful, along with why they were turned down.

4) What is the motivation of the seller?
Motivation is a key element in any negotiation. As an example, if the seller has already purchased a new property, your ability to close quickly may be an attractive element of the negotiation. The agent representing you should be ale to get some detail on this either from the listing agent, or through independent research on their own.

5) What personal items are included in the sale?
A terrific negotiating tool for sure. appliances, lighting fixtures, patio furniture, security system, surround sound system, you name it… anything the seller is willing to leave behind that you won’t need to buy when you move in has real value. Consider those items in your offer.

The Neighborhood:

6) What is the price range of properties that have sold in the area?
This information is important since it will indicate the top and bottom of that specific market. A good gauge should stay within a 90 day period; six months at the most. And make sure your agent doesn’t use properties that are too far away, or not substantially similar to the one you’re considering buying. Keep in mind that unless you are buying the property with all cash, your lender will do an appraisal on the property. If a property doesn’t appraise, then you may not qualify for a loan on it. That happens all the time, and it’s made worse when buyers have already got their heart set on the property. When that happens, so it can be a terrible emotional blow; one that can even derail the entire home purchasing process.

7) What is the average time on market for properties?
The shorter the amount of time, the more likely you’re in a seller’s market. That’s not necessarily a bad thing, however, as a buyer in a seller’s market, you need to be prepared to act, and act quickly.

8) What is the list to sale price ratio in this market?
This information will indicate seller’s willingness to negotiate and by how much. For example; if the comparable sale prices of homes is, say, 95% of the seller’s current asking price, then there might be some room for them (the seller) to budge on price. If however, that number is something like 85%’ then the seller you’re dealing with has overpriced their home significantly, and that might indicate an unmotivated or unrealistic seller. It might also mean that the agent representing them is out of touch with what is going on in the market.

9) What is the average sales price per square foot of recent sold?
This approach is ok where there are similar properties, amenities and improvements. It’s not an end all, be all comparison; but it is good to know. Sometimes a house might be priced above the average price per square foot of others like it nearby, but, the property has a fantastic yard, or a view– subjective elements like that.

Last, but definitely nor least:

If you will be financing the property, get pre-approved for a mortgage prior to making your offer. I cannot stress this enough. This is hands down the most common mistake buyers make, in my experience. By mistake, I mean they drastically underestimate the importance of this initial phase of the transaction. A preapproval letter from a lender will show the seller your commitment and ability to perform. Pre-approval can be extremely important in the seller’s market. Getting preapproved also demonstrates to your real estate agent that you are committed, because it takes anywhere for a couple of days to a week (or more) to complete. Gone are the days when preapproval was a 15-minute process; nowadays lenders want to be sure they are lending to a viable borrower. Buyers who are not preapproved typically have more of a “window shopping” mentality. They enjoy touring properties, but they’re not there yet; if you know what I mean. That’s fine, however, I would place them in a different category than buyers who have a preapproval letter in hand, a schedule in mind, and a plan of action to buy their home. That buyer, can compete with anyone out there for any home. The previous buyer; well, they will experience several disappointments along the way as they lose out on deal after deal because sellers simply will not wait for them to get their house in order.

So to speak.

Please never hesitate to contact me with any questions you may have about buying or selling. I appreciate your time, and will do everything I can to make this a great experience for everyone involved.
Mark Marino, Realtor; Keller Williams Realty | (818) 522-8378

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Author:Marino Real Estate

Specializing in residential and commercial real estate sales for the better part of a decade, my approach to real estate involves establishing a trust with my clients, that contributes to the ultimate success of our transaction. Whether it is a personal residence, or an investment property, I am committed to negotiating the best deal for my clients, and have enjoyed a history of meeting the important and unique needs of the many clients which have entrusted me with thier real estate goals.

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