Real Estate > Home Buying

Should a Buyer Disclose His/Her Negotiating Strategy to a Home Seller?

Thu, 19 Mar 2009 11:32:19 MST

This is a fair question. I would encourage all buyers to ask their Real Estate Attorney and their Realtor or Buyers Agent their perspective on disclosing any strategy a buyer may have to a home seller.

Buyers should never disclose their thinking unless they have the concurrence of their attorney and buyers agent. Even with this approval I would at the very least wonder why anyone would make an offer and let the seller know what was on your mind. This knowledge would, in my judgment, allow the seller to ignore your offer without any counter offer being made.

Furthermore it may give the seller the thought that you/buyer really want the house and you will definitely pay a higher price. Realtors are obliged by law to follow the instructions of their clients, in this case the buyer. To not follow a clients instructions may result in a Realtor being fined and or losing their license to practice real estate.

The bottom line is that you should always have a strategy, disclosing any information to the other party of your intent has its drawbacks.

What Is a Foreclosure Bus Tour?

Thu, 19 Mar 2009 11:31:24 MST

A Foreclosure bus tour is organized by Realty Companies in order to have 20-50 buyers gathered together to tour a dozen or more properties as one unit.

In Virginia Cristin Patti a Realtor with Long and Foster Real Estate is doing this with the hope that more foreclosed properties will be purchased by individuals on the tour.

www.cnn.com

Should I Buy a home with All Cash and No Mortgage?

Thu, 19 Mar 2009 11:29:11 MST

The answer to this question is it depends. If you can in fact buy a home all cash without severely impacting your financial well being then by all means do so.

Most sellers in todays real estate market would love to have a buyer with all cash. In fact an all cash transaction allows the buyer to do some hard negotiating on price and or other terms for the sale.

One option would be to make a large down payment, say 50-70%, and then obtain a small mortgage. This would allow the buyer to have some interest deduction come tax time.

In any case the advantage is clearly with a buyer who can walk into a home for sale and say "I have the cash", lets negotiate.

Should We Buy a Home on a Flag Lot?

Thu, 19 Mar 2009 11:28:16 MST

A flag lot is typically where there is a right of way, usually a driveway, that will be the only means of ingress and egress to a house that is on a piece of property behind other homes.

This is not as unusual as it may sound. There are "Flag Lots" in most every community and in every State. The right of way easement should show on the property survey and should be mentioned in the property deed.

The one concern about a flag lot is that selling the home at some point in the future may prove to be a lengthy process. The price of the home may be affected as well.

Do School Districts Play a Role in a Buyer's Decision to Purchase a Home?

Thu, 19 Mar 2009 11:25:59 MST

Good schools equate to added value to an entire community of homes. Buyers typically see a highly rated school system as an important factor when they are looking to purchase a home, especially when they have children.

Buyers will take the time to visit a school system and interview school administrators. Those school districts with high graduation rates and high test scores will have the net affect of adding value (dollars) to the price of most homes for sale.

Buyers can make their home search an easier task by having the services of a Buyer's Agent/Realtor.

A Realtor can provide reports on school scores in addition to setting up some appointments with school administrators. Realtors are professionals so make it easy on yourself if you are looking to buy a home anytime soon.

Are New Homes of Better Quality Than an Existing Home?

Thu, 19 Mar 2009 11:23:44 MST

This question is broad and requires a thorough analysis of many factors. Older homes should be considered equal to new homes in construction quality. Now that should not be taken to mean that every new home built in 2008 is as good as a home that is 50 years old.

As with everything in our market economy there are great construction companies and others that are not so good. The same can probably be said for homes and construction companies from 20, 50 and 100 years ago.

The points that should be considered by every unique buyer include energy efficiency (insulation, furnace type, wood sheathing etc.) and plumbing and electrical modifications necessary in an older home.

Some costs will be incurred by a buyer to update some of the systems in an older home. It is likely that 25 years into the future the same will be said about new construction in 2008.

The issue of which may be the better choice, new construction or old construction, should be made by the buyer after a careful analysis and comparison of which would be the best decision for that buyer.

Buyers would be well served to discuss these kinds of decisions with a qualified Realtor.

Is Location Really Important When Buying a Home?

Thu, 19 Mar 2009 11:22:43 MST

Well, if location is not important why don't more people buy a home next to a garbage land fill or next to a very busy highway?

The answer is location does play a key role in why people will or will not buy a certain home. The very same home that sits next to a group of fast food stores will likely be worth considerably less than the same home in the middle of a quiet subdivision.

Value is in the eye of the beholder and the real estate assessor. Buyers should take into their decision analysis price, size, location, condition and whatever else is important to that buyer.

Realtors will have the latest CMA or Comparative Market Analysis which is a great beginning to buying a home.

Should a Buyer Want to Buy a Foreclosure Home?

Thu, 19 Mar 2009 11:21:50 MST

You can buy a foreclosure as well as any other home on the market. The issue is if the foreclosure is in good marketable condition. Prices are typically negotiable on foreclosures because banks are anxious to get the property off their books.

Buyers should be aware that a foreclosure may carry liens that may need to be satisfied. Buyers should have their attorney check this part of the legal process carefully.

Will the lien holder agree to a whole house inspection and correct any defects? If the foreclosure is an "as is" purchase I would caution against this type of purchase.

Buyers should have a Buyer's Agent and a well qualified Real Estate Attorney before writing a real estate purchase agreement on any property.

What is the Best Time of the Year to Buy a Home?

Thu, 19 Mar 2009 11:20:49 MST

There was a time, before the current real estate bubble, when the spring season of the year was typically the best time to sell a home. This thinking has changed and the market has swung in favor of the buyer in a big way.

Buyers who are pre-approved and who have sufficient cash to put down on a home are in great position to negotiate for either new or standing homes. New home builders are anxious to make a deal with a buyer. Homeowners are also eager to sell their homes especially if they are in danger of default.

I see the next 18 months as being a prime buying time for those that are comfortable and ready. Buyers need to assess their own financial position and if they can afford to maintain a home and pay a mortgage then the time is right.

Should New Home Buyer's Consider a For Sale By Owner FSBO?

Thu, 19 Mar 2009 11:19:48 MST

A For Sale By Owner or FSBO is one of the choices any buyer may want to consider. The caveat to a buyer considering a FSBO purchase is one word, "representation". Will the seller honor a "Buyer's Agent"? If the answer is no then the buyer needs to discuss this with the buyer's agent and with their Real Estate Attorney.

There are multiple considerations including the buyer paying the Broker/Realtor commission. Going it alone, so to speak presents a laundry list of issues that may leave the buyer in jeopardy.

So, buying a FSBO is fine if that is the house the buyer chooses. Buyer's need to fully understand the implications of not having a buyer's agent represent them in the total buying process.

Should Buyers Have a Buyers Agent when They are Just Looking at Homes?

Thu, 19 Mar 2009 11:17:55 MST

Buyer's should engage the services of a professional Realtor at the earliest stages in their decision to buy a home. It is unwise for buyer's to venture out to even just look at a new home subdivision or a Realtor's Open House.

There are too many complex issues to deal with, especially when buyer's have "stars" in their eyes and cannot see the "forest for the trees", so to speak. Issues of Agency are typically unknown to new buyers. The sales agents at a new home subdivision or open house does not have the responsibility to represent the unsuspecting buyer on their first visit.

Buyers would be wise to ask questions by visiting some Real Estate Offices or by asking friends for a referral. Once a buyer has some of the basics of how the buying process works they will be more capable of making sound decisions.

How Do I Know If I Can Afford To Buy a Home?

Thu, 19 Mar 2009 11:16:50 MST

The best way for any buyer/s to determine if they can purchase a home is to make a list of the reasons they want to buy a home and then make a list of reasons why they should not buy a home.

Buyers should then go over each item on both lists and make the decision that many buyers avoid confronting. Will they make the sacrifices necessary to make the purchase of a home a reality?

If buyers have consistent income and a strong sense that the income will have a chance to grow in the near future then money pressure will be less of a concern.

If buyers want to live a lifestyle that includes dinners, vacations etc. then buying a home is probably not a good decision on a tight budget.

Buying a home is an investment. Buying a home should not be thought of as a way to make a "fast dollar". Given the recent history of real estate and the sub-prime mortgage crisis that thinking will only end in regret.

Buyers should consult with a competent Realtor, Lender and Real Estate Attorney and set some goals and move from a solid comprehensive plan that will probably result in the right decision.

Should a Buyer have a Whole House Inspection When Purchasing a Home?

Thu, 19 Mar 2009 11:15:22 MST

A whole House Inspection conducted by a qualified Home Inspector is very much required when buying a home. The home inspector should have a credential from ASHI, American Society of Home Inspectors.

If a buyer enters into a real estate purchase agreement without adding a contingency for a whole house inspection then either that buyer failed to do their homework or that buyer did not have a Realtors representation or worse, a terrible Realtor.

The whole house inspection will provide a reasonable assessment of the overall condition of the home and a very good idea of the systems in the home.

The systems I refer to include heating, cooling, plumbing and electrical. The whole house inspection will also look at the condition of the roof and the grade of the property.

The home inspector will also be a resource to ask dozens of questions to regarding home maintenance and the things a novice buyer should be wary of.

Realtors usually will be a great referral source for a home inspector.