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BUYING A HOME -
Locating Your Next Home (continued)
3. For most people, the best way to locate that right home is to look at many homes in different neighborhoods. This allows you to get a feel for the neighborhood, and “zero” in on what you want in a home.
a. Try to locate a home in a neighborhood with good schools, even if you do not
have school-
b. Once you have found two or three homes you really like, make sure you go back one or more times to look at the home again in great detail. Pay particular attention to the condition of the home and any changes you feel will need to be made. Do not be hesitant to open doors, look in attics and crawl spaces, etc. Also pay attention to any drainage issues on the property. Ask your realtor or seller what the taxes and any association fees are for the home, and perhaps the average utility costs for the home. Also ask the seller’s realtor or the seller if there are any problems with the home or property. In many states the seller needs to fill out a disclosure form of any known defects. Ask to see the completed form.
c. Visit the neighborhood (and areas surrounding the neighborhood) and home on different days and times of day, to see what is going on in the neighborhood, and how the sun impacts the living areas of the house. Consider knocking on some neighbors’ doors, introduce yourself, get a feel for what they are like and, possibly, find out if they are aware of any neighborhood problems or problems with the home you are considering. In other words, do whatever you can to make sure you will be happy in the home and neighborhood before you buy. If you want to check out the neighborhood further, you can visit sites like CriminalSearches.com or PropertyShark.com to check on potential crime issues and criminals in the neighborhood. Also check out the local police department’s web site. PolicyMap.com provides census data for the neighborhood area, as well as certain crime data.
Making An Offer & Negotiating A Deal
Once you have located that perfect house, it is time to try to negotiate an agreeable
price and closing date with the seller. If you are using a realtor, negotiations
will proceed through them. If you are buying directly from the owner, you will need
to negotiate face-
1. Get some information on recent sales prices of homes in the neighborhood, so you can get an idea whether the asking price is within reason, or out of line. Also, find out if the home you are interested in has been sold within the last five years, and for what price. If you are working with a realtor they can supply you with this information. If not, you can get this information through the city clerk’s office or appraiser’s office. Generally, they have web sites that include this information. Sites like Zillow.com can also help you get a ballpark idea of what houses may be worth in your neighborhood. Also, try to get an idea of local market conditions, such as whether it is a buyers’ market or a sellers’ market.
2. Make sure you know what is included in the home sale, such as appliances, window treatments, etc. This will not only help you develop an offering price, but will also help eliminate surprises later.
3. Decide on an offering price.
a. Do not spend more than you can afford.
b. Make sure your offer is lower, rather than higher. You can always raise your offer during negotiations, if you feel a higher price is necessary to close the deal, and you feel the house is worth it. Do not spend any more than necessary by offering too much, when a lower offering price might have worked. Do not feel bad about making an offer well below the asking price, perhaps as much as 10% to 20% less in normal circumstances.
c. While you might ask your realtor to suggest an offering price, do not necessarily accept their advice. Their main interest is usually just to make a deal happen, so they can collect a commission. If they can convince you to make a higher offer, they have a better chance to make a deal (as well as collect a higher commission, since they get a percent of the price). Consider the price data you have on recent sales in the neighborhood, the owner’s asking price, the realtor’s advice, whether houses are “moving” in that neighborhood, and your own “gut” feeling.
4. Develop and present an offer for purchase. While you may have some preliminary verbal discussions with the owner about price (particularly if the house is for sale by owner), eventually you will need to submit a written offer and deposit. Usually an initial deposit with a purchase offer is about $1,000 although final contract provisions that are negotiated may require a deposit of up to 5% of the purchase price. If you are working with a real estate agent this will be done working with them. If you do not have an agent, but the seller does, you might consider working through them, but keep in mind they represent the seller, not you, although they are supposed to follow certain ethical guidelines. If you are buying without a realtor, consider using a real estate attorney to assist you with an offer and other matters of the purchase.
a. Decide if your offer will be dependent on any contingencies, such as financing. Make sure any deposit you submit with either an offer, or in accordance with a purchase agreement, will be returned if contingencies are not met. In other words, if you meet your obligations under the purchase agreement but are unable to complete the purchase, or if the seller does not meet their obligations under the
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