Do you want to buy a house?

 The fastest, easiest, and best way to find the best deal on the best home is competitive shopping. You make the available homes compete for your business.

It’s a lot faster and easier if you use a good Realtor. And the earlier to start with that Realtor the easier it’ll be.

The first step is to get your proof of funds ready

If you are paying cash, be prepared to prove that you have it. If you are mortgaging, get a pre-approval letter from a lender. The reason you do this now is so you can prove to the seller that he should take you seriously when you submit your offer. Call me and I’ll send a good Lender your way.

Now determine a narrow price range of interest

The reason you keep the range narrow is to keep things competitive. If you waste time with Sellers who have over-priced, the good properties will be taken by another buyer. The over-priced Seller MAY come down some day, but why wait, when there’s a good one out there right now? Grab it before someone else does. And they will. This is true in both fast and slow markets. And watch out — some people are under-pricing their properties to increase traffic. When they do this the sales price ends up higher than the list price.

Now rule out all the over-priced stuff within your narrow range

Look at all the homes within your narrow price range by e-mail/internet and pick the top third (your favorites) for review. You can get a rough idea of what your payment would be by clicking on the little % sign. Have your Realtor look up their just values (public record). Houses — The ones with the highest land values are more or less the ones with the best locations. Location, location, location. Condos — The ones with the highest just values are more or less the ones that would be the most valuable in good condition. Get an insurance quote when you start looking. Base it on a hypothetical house in your price range. The purpose of this is to be able to limit your insurance exposure with an addendum to the contract. If a house has had a lot of previous claims it may get rated for a high premium.

You really need to pick the neighborhood over the house

You can improve the house. You probably can’t improve the neighborhood. One way to compare is to look at the land value on the county property appraiser’s web site. Ex. — a house with a land value of $132,000 is almost certainly in a more valuable neighborhood than one with a land value of $62,000. With townhouses and condos, just look at their Just/Market values. “Just/Market Value” for every property in the county is based on a comprehensive survey of market information including sales. Factors such as “Homesteading”, widow’s exemption, length of time owned, etc. are not factored in the way they are in “Assessed Value”. Two truly identical properties would have the same Just/Market value. Here are some things not highly rewarded in the marketplace:

Cars parked on the street
Cars parked over the sidewalk
Cars parked on the grass
Garage doors left open
Bad roofs
Houses that need paint
Overgrown landscaping
Shabby lawns
Hoses laying around
Cars on blocks

See HOAs below

What to consider when making an offer

If you’ve utilized competitive shopping, you’ve ruled out all the overpriced stuff at this point. The home you’ve chosen is worth what they’re asking for it. Rather than bid low and lose it to someone else, make an offer that’s at least reasonable. If they’ve purposely under-priced it, you’ll have to bid over the listed price — maybe by 25%.

One technique for keeping the price low is to make the offer as-is, subject to inspection. This also allows you to avoid the process of trying to get a licensed repairman who’s up to your standards to finish repairs within a couple of weeks. Just get the price down and get your own repairs done after closing.

Buyer’s closing costs typically run 2–4%, much less if you are paying cash.

Why Choose A Buyer‘s Agent?

Many good realtors (including me) offer free buyer consulting, with the sellers paying the commissions, and sell all realtor’s listings, not just their own. The commission is already set and there is an agreement that the listing Realtor pays the Selling Realtor from that, so there is NO commission paid by the Buyer under this arrangement. It’s free to the Buyer.

Sure, you can do all this yourself. But a good professional (I said a good one) will be better and faster at it than you could ever be. And the Seller pays the commission, not you. If you flop around on your own, you’re always a day late for the good ones. A realtor can notify you by e-mail whenever a home within your parameters gets listed — as soon as it gets listed — by them or any other realtor! And a good realtor knows how to avoid contract problems before they become problems.

Negotiation for Buyers

The more complicated your offer, the less likely it is to be accepted, or even counter offered on.

Basing your offer on a percentage of the listing price is a terrible idea. There is no one way to price a house. Some people under price it, in which case you’re going to have to come in over the listing price. Some people price it right on the money, in which case you’re going to have to hit that number. Some people, like me, keep it within 5% of the market value. Those go within 2 or 3%, in which case you actually get a little more than market value. Most people overprice it, in which case it’ll sell for quite a bit less than the asking price. If that’s the case, you’re better off going for a different house that priced right. An overpriced house indicates a Seller who actually believes the house is worth way more than it is. He’s not going to come down very much or very fast, and while you’re messing around with him, another, really good house will come along and get snagged by a smart Buyer.

Try to avoid Fridays as a closing date. The lender is often too late with the paperwork, or something else can go wrong — like “the wrong kind of check“, “the wire didn‘t come through“, “we don‘t have funding authorization yet“, etc. Then you might have to close on Monday. That can leave someone sitting in a moving van over the weekend. Mondays are also bad. I forget why now, but I actually picked up the tip from another Broker who I believed once he explained it. Last couple of days of the month are bad also. As is the 15th and the 1st. Those are when the title companies are the busiest.

When you sign a contract make sure you get every signature, initial, and date. You don’t have a contract until everything is signed and initialed. Which means another Buyer can come in and snag the house out from under you.

A good referral for me is a Buyer or Seller who already has another Realtor in mind, but wants a second opinion.

If you choose your Realtor based on how much of a kickback you get, you may be getting a Realtor who doesn’t know much about house-hunting, negotiation, and closing. As a result you may end up overpaying for your house by a whole lot more than that 1% you got back from the Realtor.

A good referral for me is a Buyer who doesn’t want to screw up the negotiation of their real estate contract.

HOAs:

The point of an HOA is is to maximize the market value of the neighborhood by eliminating the factors that cause low market value. In order to facilitate this the law requires adherence to state statutes and HOA bylaws and documents.

An example is inconsistent upkeep of home exteriors. The HOA takes the maintenance of the home exteriors out of the hands of the homeowner, who may not appreciate the importance of upkeep and neighborhood curb appeal. That way they can still be a slob indoors, but prospective buyers won’t see that from the street when they ride through. As I drive-through various neighborhoods showing town homes and condos to buyers it becomes obvious that the subdivisions that are kept up the best and are the most uniform sell for the most.

I’m a residential real estate broker and expert witness appraiser. That means I know what makes properties sell, and for how much. And I testify in court as to real estate values.

The most common mistake people make when buying in an HOA

Some people make the mistake of buying in a place that looks great without checking what laws and rules they’ll be subject to once they move in. The time to do that is before you even look at the interior of the home. That way if you don’t think you’ll like abiding by these rules and laws you can look at a different property. Finding out at the closing table or after you move in doesn’t cut it. It’s way too late by then. When you accept the deed to the property you’ve agreed all the deed restrictions (state statutes and HOA bylaws and documents).

You can check these yourself at

https://pubrec6.hillsclerk.com/ORIPublicAccess/customSearch.html

This is for Hillsborough county. Call or email me for other counties.

(Name = your legal subdivision name, like Valhalla. Document Type = RES,MOD [restrictions, modification]) and/or call the management company of the subdivision you’re interested in. A good listing real estate agent will probably attach them to their MLS listing. But good Realtors are in the minority, so always perform your own due diligence. Buyer Beware. A good Buyer’s Agent can give you general advice, but will not have the deed restrictions of sixty zillion subdivisions memorized. They might help you research, but again, perform your own due diligence.

Once you’re there

It is smarter to adjust to reality than expect it to change. Reality is that the rules are set in writing in the State Statutes and your subdivision documents. None of the rules end in, “unless you think you have a good excuse”. You decided to live here because it looks better than the competition at the same money. The reason it looks good is because the rules are enforced. When you closed on your house you agreed to all the rules. If you didn’t check them out ahead of time that’s on you. It’s not someone else’s job to make sure you know what you are buying. If you get caught breaking a rule your best bet is to adjust your behavior. If you want to change a rule there’s a procedure you can follow to do so. Go out and get the signatures required.