Buy / Sell A Home
Buying a Home
Buying Secret #10: Money Matters
If you are not going to be a cash buyer, the first step in buying a home is determining a budget and finding out what you are qualified to borrow. Meeting with a mortgage lender prior to home shopping can have many benefits. A great lender can advise you on budget, give tips on how to best qualify for a mortgage and how to get the best rate. For instance it is often not wise to make major purchases, increase debt, move your money around three to six months before buying a new home or do other things that may weaken your credit profile.
Buying Secret #9: Get Pre-Approved for Your Home Loan
There are two terms for mortgage qualification that get used interchangeably and they are absolutely not the same thing. A mortgage lender can “pre-qualify” and they can “pre-approve” a buyer. In a pre-qualification, a borrower will supply their lender with a picture of their income, assets and liabilities and the lender may issue a pre-qualification letter stating that the borrower is “qualified” to spend a certain amount and also state that this qualification is based on items they have provided by the borrower, but have not verified (and they often don’t review the borrowers credit report, either.) Pre-approval involves the borrower filling out a mortgage application, often paying an application fee, and the lender doing an extensive check of their financial background and credit rating. A pre-approval letter carries much more weight and this buyer’s offer on a home can be much more attractive. Also, since much of the mortgage approval work has already been completed the pre-approved buyer may be able to propose a quicker closing date.
Buying Secret #8: Get a Survey
A reasonably current survey on a property you intend to purchase is essential. Not only will it be required should you get a mortgage on the property, it will show your property boundaries (including any variance in the property line and the physical wall or fence between you and your neighbors), any easements such as city utility easements and building lines or setbacks. A home seller will often have a survey they can provide, but if they do not, or if it is an older survey and you notice visual differences between the survey and existing structures, a new survey can be money well spent. A good rule is to view the seller’s survey prior to making an offer and negotiating who will pay for a new survey if the existing one appears inaccurate or is illegible.
Buying Secret # 7: Market Timing
Obsessing with market timing is often unproductive as the market wil fluctuate and timing it is nearly impossible. Just like the stock market, the real estate market goes up and it goes down... then it goes back up… because that’s what markets do. The best time to buy a home is when your financial situation and housing situation tell you it’s time and when you find that perfect home. Your Realtor can help provide market data and advise you on home values at any given point in the market.
Buying Secret # 6: Size, Location and Other Value Factors
Bigger is not always better and the best home for you or your family is the one that has all the space you need and none that you don’t. Keep in mind that smaller homes can sell for more per square foot than larger homes and homes with larger lots can sell for similar homes on smaller lots. Everyone likes to quote “price per square foot”, but there are many other factors that affect home value and no two measurements of a home’s square footage will be the same. Use $/SF cautiously and have the home measured if you are concerned about the size the seller or tax office is quoting. Location, area amenities, construction quality and efficiency will have a far greater impact on enjoyment of your home than the square footage. Additionally, a home that has a negative influence, such as a busy street, may still be the perfect home for you; just make sure you get an appropriate price discount when you purchase because you will certainly have to give that discount to a future buyer when you eventually sell.
Buying Secret #5: Avoid Sleeper Costs
The difference between renting and home ownership is the sleeper costs. While the largest expense is typically the mortgage cost, buyers must also be aware of the other expenses such as property tax, repairs/maintenance, utilities and homeowner-association dues. HOA dues may include some amenities, services, utilities and, in the case of condominiums, insurance of the structure. Get clear on the full expense budget as you look at various properties.
Buying Secret #4: Homes are an Emotional Business
Home buying is often an emotional event. Getting clear on your budget and objectives before looking at homes can help balance the emotional and business sides of the process. Remember that you make your money in real estate when you buy, not when you sell. The idea here is to try not to overpay when buying because you can not force a future buyer to overpay when you eventually sell. At the same time, there is much “off the balance sheet" value in living in a home you truly enjoy. A professional Realtor can help you keep a healthy balance between the business and emotional sides of home buying.
Buying Secret #3: Inspect, Inspect, Inspect
A seller of residential real estate in Texas must, under state law, disclose what the seller knows about the condition of the property. (See Texas Property Code Section 5.008.) This includes conditions known to the seller that would not be discovered by the purchaser making reasonable investigation of the property. As a buyer you will receive a “Sellers Disclosure Statement”, typically a Texas Real Estate Commission form which the seller fills out. This is a good place for the buyer to start to understand the good, the bad and the ugly of a home, but hiring a professional home inspector is the second critical step and will help you understand the condition of the home and what repairs may be needed for your future enjoyment and safety in the home.
Buying Secret #2: The Secret Science of Bidding
There are as many negotiating strategies out there as there are homes to bid on and the right strategy depends on your particular buying situation and motivation. Your Realtor can help you determine how to meet your goals, but in many situations, the best offer is one that is slightly lower than what the seller was hoping to accept. A “low-ball” offer will often offend the seller to the point that they become unreasonable in their response and prevent a buyer from finding the seller’s lowest price. Again, bidding strategy must be tailored to the market conditions, specific property and your objectives… a Realtor can help!
Buying Secret #1: Know the Neighborhood
Before you buy, get the lay of the land and specifically home pricing and lot pricing in the area. Even if you aren’t interested in buying a lot, it helps to know the going land value in the neighborhood and then considering how much the seller is asking for the structure. Know the schools, even if you don’t have kids, because good and not-so-good schools affect property values. Check drive times, either in person or with Google Maps or Waze; morning and evening commutes can vary dramatically in some areas and these apps will allow you to check drive times at different hours of the day. Also, look into HOA rules as some are very strict (not necessarily a bad thing as strict HOA rules maintain order in the neighborhood) while some neighborhoods have no homeowner regulations outside the basic city laws (while it's nice to be allowed to do what you want to do, but your neighbors will also be free to do the same!)
Selling a Home
Selling Secret #10: Pricing it Right
Any property is worth only what qualified buyers are willing to pay. Find out what your home is worth and price it accordingly. There is always a range within which to price a home and the old mantra, “price or patience” holds true. If you are motivated to sell quickly, you should price your home at the low end of that range, knowing that in a strong market, it is likely that multiple buyers will bid against each other, driving the sales price to the full market value. Pricing a home at the high end of the market value range may require more patience… and, of course, overpricing will only lead to excessive time on the market which can make prospective buyers think something must be wrong with the home. Appropriate pricing is the single best strategy to sell a home in a timely fashion.
Selling Secret #9: Select a Great Realtor
We can really help with this one! An experienced Realtor who works with a reputable and well-regarded Brokerage can be the most important decision you make when selling a home. Hiring a Realtor with in-depth market knowledge, great home staging ideas and an extensive network of real estate professionals will help make your home selling experience a success. From appropriate pricing and marketing strategy to guidance with the other items on this list, a great Realtor is often the key to this success. (This is probably Secret #1, but we couldn’t wait to throw it in! ☺ )
Selling Secret #8: Marketing Plan
Today there are numerous ways to put your home in front of prospective buyers. Pocket listings, coming soon listings, Realtor-only website listings and MLS (multiple listing service) listings are just the beginning. A great Realtor will explain their Internet marketing, print advertising, email marketing, Realtor tour, open house, Realtor networking and other strategies that they can employ to get your home in front of the most qualified and motivated prospective buyers for your home.
Selling Secret #7: Half-Empty Closets
Home buyers are often looking to replace a home they have outgrown. Clearing out clutter and making your home look as spacious as possible is a great selling tactic… removing half of the items in every closet will make your home look like it has room to spare!
Selling Secret #6: Light It Up
Natural light is a big selling point for many home buyers. When your home is being shown, open window treatments and turn on all of the lights. Increasing the wattage of light bulbs can also make closed in rooms feel larger and more attractive and cleaning windows and trimming overgrown landscaping can also open up a home. Bright and cheery sells!
Selling Secret #5: Pets, Smells and Aromas
You’ve probably heard the old saying, “Children should be seen and not heard.” While we don’t believe this still holds true, we do believe that, “Pets should not be seen or smelled!” Because not everyone keeps animals in their home, it is preferable to remove pets, along with their litter boxes, bedding and food for showings. On the positive side of the olfactory spectrum, high-quality candles and scents, so long as they aren’t overpowering, can trigger positive feelings for prospective buyers.
Selling Secret #4: Repairs and Upgrades
If it’s broken, fix it. That loose door handle or dripping faucet a homeowner hasn’t gotten around to fixing can lead buyers to wonder what other “deferred maintenance” might exist, especially in the unseen and expensive to repair mechanicals of a home. Quick fixes before selling always pay off. Having a home pre-inspection and making certain repairs can be a great way to avoid re-negotiations of the sales price once a buyer has the home inspected. Keep in mind that once you have the home inspected, you will be required to repair or reveal the deficiencies shown on the report. Paint and carpet cleaning or replacement is almost always a good thing while upgrades or major remodel projects in preparation for a sale are not as straight forward and it is difficult to determine what the return on these investments may be. A knowledgeable Realtor can discuss these ideas with you.
Selling Secret #3: Emotional Business
Selling a home, especially one you have put a lot of love into, can be a very emotional thing. It is important to realize that home buyers are often in “business mode” and will place value in other areas than a seller does. While family photos and other personal items are important to the seller, they can be distracting to a buyer. We’re not suggesting “sanitizing” the home, but make sure a prospective buyer can look around and imagine themselves or their family living there. It is often a good idea to consider hiring a home stager to maximize the floorplan / spaces as well as the inviting nature of the home.
Selling Secret #2: Always be Ready to Show
Whether you have your home on a lockbox or listed as “Appointment with Agent”, keeping it “show ready” and making it as accessible as possible is very important. While seriously interested buyers will go to greater lengths to get into a home, it is a good idea not to turn away less motivated buyers. You never know who will fall in love with your home! Price range can have a lot to do with how a home is shown and a great Realtor will help develop a showing strategy, manage showings, qualify prospects and get feedback after showings.
Selling Secret #1: Make a Great First Impression
The importance of the drive-up and walk-up appeal of a home can’t be overstated. There is only one first impression and prospective buyers make it before their Realtor can get the key in the front door. Re-sodding bar patches in the lawn, planting flowers, mulching beds and trimming overgrown plantings is one of the lowest cost ways to start a home off on the right foot. Power washing the home, walkway and porch and painting the front door and shutters can take years off a home and cause drivers by to do a double take.