Friday, March 24, 2017
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Tom Gilliam
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How To Buy Your First Home At The Price You Want
Found the first home of your dreams? Now the negotiations begin.
The agent you're working with can guide you through the process of making a purchase offer. You'll want to start by learning as much as you can about how much the property is worth.

Check the comparables:

Your agent has up-to-the-minute price data at hand to help you analyze any comparable properties; just ask. Although every home is unique, here's some of what makes a home "comparable" to the one you're considering purchasing:

  • same neighborhood;
  • same age and condition;
  • same size lot;
  • same home style--equivalent living space, number of rooms and baths;
  • similar terms of sale.
Follow sales price trends
Ask about recent pricing trends in the neighborhood. Specifically, what has been the average difference between listing price and sales price for recent sales of comparable homes? What is the ratio of assessed tax value to market value?

Offer what you think the house is worth
Some asking prices have built-in padding, but others are already priced to sell. You could lose a well-priced starter home with a low-ball bid. Remember, a lower mortgage interest rate will allow you to borrow more and pay a higher price for your first home without increasing your monthly payment.

Spell out the details
Consider getting a pre-purchase appraisal and home inspection. The appraisal will give an independent valuation of the property, and the inspection will help identify any potential problems you may have overlooked. Consider including a contingency making the contract subject to a satisfactory appraisal and inspection.

Evaluate contingencies
The contract can also be contingent upon an attorney's review, previous home sale, and acceptable mortgage loan terms, etc. Contingencies are typically used to smooth acceptance of an offer without delaying the final decision. Too many contingencies, however, weaken your bargaining position.

Know what's important to you
Prioritize the elements of the sale on paper ("must" and "want") and decide where you have negotiating room -- what you'll give up or accept in exchange for a concession. Items frequently negotiated include adjustments for needed or requested repairs, what personal property stays and what goes with the seller, points and closing costs, and move-in date. Knowing exactly what you want and where you are willing to bargain is your most important negotiating tool.

Put everything in the first purchase offer
If the first offer is accepted it may be too late to add anything. Include a financial statement. Do all negotiating in writing with a deadline for a response, often 48 hours. You are free to cancel an offer until it is accepted by the seller. Require that your binder or deposit be held in an escrow account with the interest credited to you.

Be patient
Negotiating could take several days. Be patient; you won't want to rush into one of the most important purchases you'll ever make.

We can help
If you'd like help finding your first home, please call or e-mail us. We'll help with your home search and will give you all the important information we can provide to help you make the right offer for the right home at the right price.



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FIRST TIME How To Buy The Most Home For Your Money
QUALIFIED How Much House Can You Really Afford?
TIRE KICKING Secret Tests To Check A Property's Condition
LOCATION LOCATION: The Most Important Questions Every Buyer Should Ask
NEGOTIATE How To Buy The Home You Love At The Price You Want
SEARCH Quick Checklist For Finding The Perfect Home
INVEST YOUR RENT Why Pay Your Landlord's Mortgage?
MORE FOR LESS Six Tips For Getting The Best Loan
OPTIONS 10 Savvy Ways To Pay For A Home Today
SHELTER Six Little-Known Ways To Help Relatives Finance A Home
 
       
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