Legal Edge RE

Massachusetts Real Estate | Metro Boston, North Shore & South Shore

How To Avoid Being Beaten Out By Other Buyers Who May Be Competing For Your Dream Home…

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You’ve found your dream home, so you’ll make an acceptable offer and live happily ever after…unless another buyer beats you to the punch!

In a competitive marketplace, this can not only happen, but can potentially have a far greater impact than any negotiating gambit the seller would hurl your way. Yet, more buyers erroneously fear the seller more than they do other competing buyers!

That’s why it’s important to make sure your offer strategy includes a strong stance against other potential buyers and their offers. There are several factors that make buyer competition a threat in today’s real estate market.

It’s a sellers’ market.

First, in a competitive market with relatively few quality properties available, “dream home” category houses will become hot properties – often as soon as the for sale is planted in the yard.

Most buyers want to purchase a home that requires very little fix-up. They comment, “I want to bring in my toothbrush and immediately set up housekeeping.” And to obtain these turnkey benefits, buyers are willing to pay a premium.

That can translate into not only a full-price offer, but one that exceeds the seller’s listed price.Timing is everything.In an active market, timing is everything.

In the good old days, you might have the luxury of viewing a home several times – even dragging your relatives to see it… before you actually made an offer.

“He/she who hesitates is lost” aptly explains buyers who dally to make a buying decision today.
And don’t forget that being pre-approved for a loan has leveled the playing field for a majority of buyers. If they’re all equally qualified financially, the best offer (as interpreted by the seller) gets the property.

So, what can you do to arm yourself to the teeth with added value to capture a seller and counteract offers from other buyers?

Get Pre-Approval.

First, make sure you’re financially pre-approved by a Lender for the loan you’ll need and be prepared to document this fact to a seller if requested.

Be Honest.

Be honest with the seller about your interest in purchasing the property. This doesn’t necessarily mean that you won’t negotiate a fair purchase; but it also doesn’t mean that you’ll act nonchalant and noncommittal either. Sellers often choose one buyer’s offer over another based on the level of personal interest and commitment the buyer appears to have to the seller’s home.

Communicate.

Lastly, make sure you fully communicate the desired outcome to the real estate consultant you’re working with. The consultant will then evaluate the best tack to take in terms of price, purchase terms, and negotiating tactics to help you realize that goal.

The next time you’re inclined to wonder what evil trick the seller might be up to, better look behind you first…to see if other buyers are trying to pull the rug out from under your dream home!

Top Six Things To Ask Yourself When Looking At A Home

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696 central st hollisgonWhen you’re looking for a home, ask yourself these six questions to ensure that it meets your basic needs.

1. Is it within the right distance to work, church, family, and friends?

One of the first things a real estate consultant will ask you is about location. Think about where you like to shop, where you work, where you worship, and where your friends and family live. Some people are willing to commute a little further to work in order to live closer to family and friends. Others, particularly those who like to sleep in, prefer to live closer to the office.

2. Does it have enough bedrooms and bathrooms?

How many children do you have, or do you plan to have others while you’re living in this home?

Do you have three teenaged daughters? If so, you probably don’t want to be sharing a bathroom with them! Do you have frequent visitors in your home? Do you need a separate guest room? A separate bath?

3. Is there enough storage space?

Do you need a basement or attic? Do you change your floral arrangements and décor with the passing of the seasons? If so, you will probably need storage space for the items currently out of season.

4. Is there parking?

Is a garage absolutely necessary? For how many cars? Could you live with a covered outdoor space or will dedicated parking space suffice?
5. Is it safe?

Are you willing to live near a toxic waste site or municipal garbage dump? Would your children be safe playing near a busy intersection? Is it in a high-crime area? Local papers and police departments can provide the crime statistics for a neighborhood.

6. Is it in the right school district?

Will your children walk to school, take a bus, or will you have to drive them? Many school districts have a reporting system that indicate the qualifications of teachers and administrators, and demonstrates the performance of students. You can contact the school district office for more details.

If the home meets these basic requirements, then start to look for how many things from your wish list it has.

For example, does it have a garden or deck, does it have an oversized tub in the master suite, does it have a separate laundry room, is there a fireplace? What’s the condition of the house?
Remember, you can paint, decorate, gut the interior, replace shingles with slate, add a deck, add a pool, pave the driveway, and even plant flowers. But, it’s rare that you want to move a home. There is some truth in that adage, “You can change everything about a home except its location.”

Seven Money-Saving Secrets You Can Use When You Buy A Home…

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1. Choose a low down payment loan.piggybank

There is no law that says you MUST put 20% or even 10% down. There are some loans that require as little as 3% or even zero down. This is attractive for three reasons: It’s hard to save for a large down payment, you could earn more interest on that money than you’re paying in interest on the loan, and it’s nice (and sometimes necessary) to have cash on hand after buying a home.

2. Have someone give you money to pay closing costs.

A relative, church or nonprofit organization can give you money for closing costs. Cash gifts from wedding gifts can also be used.

3. Ask the seller to pay some of your closing costs as part of your offer.

Sellers are usually allowed to contribute to a buyer’s closing costs.

4. Do not pay too much insurance at closing!

Most Lenders require 14 months hazard insurance paid at closing, so be ready. What happens to that extra money? It sits in your escrow account until you sell the house. It’s safe there, but it often earns no interest.

5. Remember, the homes that you’re looking at don’t belong to your agent.

You must be straightforward about your likes and dislikes in order for the agent to do the best job for you. Your agent should show you everything available that meets your requirements. Don’t make a decision on a house until you feel that you’ve seen enough to pick the best one. Review the Multiple Listing printout with your agent to make sure that you are getting a COMPLETE list.

6. Shop around for your home insurance.

A little shopping might help save you money.

7. You can deduct money paid for discount points from your gross income before computing your tax.

See a CPA for more information.

Spend A Little, Get A Lot

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earnerHere are some low cost tips to help you  showcase your home and check for repairs.

If you have more than two cars in your driveway, park the extra vehicles at a neighbor’s house. This will give your driveway and yard a spacious look.

Oil and rust stains can be removed from concrete with commercial driveway cleaners that are available from automotive and home improvement stores.

The basement needn’t be spotless, but change light bulbs and clear cobwebs before showing the house.

Change air conditioning and furnace filters so the units will run efficiently.

If your washer and dryer are in the basement, create a cozy laundry area by adding an area rug and shelves to store detergent bottles.

Check for termites by using a pocketknife to jab the support beams near the house foundation. If the knife penetrates the wood easily, then there could be a termite problem.

You Can’t Take It With You

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The 11 Best Ways to Blow Your Money– Here are some ways you can have it all, and end up with nothing when it comes to retirement. 1. Drive a super hot car. 2. Buy a gigantic home in an exclusive neighborhood. 3. Decorate on a grand scale. 4. Stay out of the kitchen (eat out A Lot!). 5. Try new stuff constantly. 6. Dress to impress, stay out of the discount stores. 7. Build a brand new you and maintain (great new clothes, personal trainer, plastic surgery, etc. 8. Be and early adopter – try the latest technology when it first becomes available. 9. Indulge your children – give them lots of expensive toys and gadgets. 10. Indulge yourself- don’t deny yourself anything.11. Get away from it all- take lots of expensive vacations.

Now that you know how to have a great time, it’s time to reconsider and be reasonable. It’s better to invest your money wisely, let your real estate agent help you select a home that is affordable, that will last you for many years and can give you a better life, rather than being house poor.  In the long run, you will have a comfortable retirement and still be able to have fun along the way.

Excerpts from an article by Donna Freedman, courtesy of Alan Lury, the Financial Handyman

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