You've done
your homework
and seen what
the market has
to offer - now
it's decision
time.
Choosing a
Home
Choosing which
home to purchase
is the critical
phase of your
search - make
sure the house
is right for you
before deciding
to buy. Consider
your wish list,
the location,
and the price
when making your
final decision.
Consider the
Neighborhood You've
already
researched the
community (we
hope!) in
general terms -
now it's time to
take one last
look at the
neighborhood to
make sure it's
the right place
for your family.
Consider your
route to work,
the local
shopping -
anything that
affects your
lifestyle and
daily routine.
Check the
Details Make sure
the house is
right for your
family and
lifestyle. Will
your furniture
work out? Is the
yard big enough?
Does the layout
work well for
your family's
routine? Check
through your
wish list and
notes to make
sure you're not
forgetting
anything.
Research
Multi-Family
Units There are
some specific
concerns
involving
multi-family
housing. If
you're seriously
considering this
type of home
make sure that
you do the
research so you
know what you're
getting. Review
our multi-family
housing
checklist if you
are planning to
buy a condo or
townhouse.
Don't Buy if
You're Not Sure
Don't buy a home
out of
frustration or
impatience -
this is a major
investment and
it should be
treated as such.
If the market is
strong or your
standards prove
to be
unreasonable you
may need to
revise your
expectations
before
continuing the
search.
Be Wary of
Overheated
Markets
Think carefully
before getting
into a bidding
war or buying a
home with a
hyper-inflated
price. Extreme
sellers' markets
can develop when
national and
local economic
conditions are
exceptionally
strong. During
these periods
prices can rise
dramatically and
buyers can be
pressured into
taking
aggressive - and
often
irresponsible -
actions. Be
careful,
however, as
these strong
periods are
inevitably
followed by
severe
corrections.
Homeowners
buying at peak
periods often
find themselves
with substantial
paper losses - a
condition that
can take years
of normal
appreciation to
correct.
The offer is the
first step in
negotiating the
purchase of your
new home. Try to
consider all of
the relevant
facts when
determining your
offering price.
Homes often sell
for negotiated
figures that are
below the asking
price -
sometimes
considerably
below, so give
serious
consideration to
your initial
offer.
Consider Market
Conditions Home pricing
and sales
activity is
strongly
affected by the
strength of the
underlying
market. In a
weak market
purchasers may
be able to
negotiate
substantial
reductions from
asking prices.
Conversely, it
is risky to make
a low offer in a
strong market -
another buyer
may appear
suddenly and pay
full price.
Review the
Specifics of the
Property Does the
home suffer from
a lack of curb
appeal or other
problems? If so,
you may want to
be more
aggressive in
your
negotiations -
chances are
there will be
less
competition,
even in a strong
market. If the
house needs
make
sure you know
exactly what to
expect so you
don't have any
unanticipated
expenses after
closing.
How Badly Do You
Want the House? Will you (or
your family) be
extremely
disappointed if
you lose the
house? If so,
consider being
less aggressive
in your
negotiations -
especially in a
strong market.
Conversely, if
you are willing
to take a chance
you may be able
to get a better
deal.
Evaluate the
Seller's
Motivation
A homeowner who
is under
pressure to make
a sale is more
likely to accept
a low offer.
Recognizing a
motivated seller
is a major step
toward making an
advantageous
purchase. Common
causes of
pressure on a
seller include
financial
difficulties,
divorce, or the
need to move by
a certain date.
Consult with
Your Agent
Your realtor is
an experienced
professional
with deep
knowledge of the
local market, so
make the most of
this resource.
Your agent can
tell you how
long a home has
been on the
market and can
provide
comparable sales
for review. It's
even possible
that your agent
may know of a
motivated
seller.
Are You Buying a
New Home?
Many builders
have a general
policy of not
negotiating
prices
(particularly in
major
developments),
so if you are
buying a new
house you may
have to pay full
price.
Nevertheless,
you may be able
to get a deal
occasionally -
particularly if
the market is
weak or sales in
the project are
slow. You have
little to lose
by trying.
Writing the
Offer
An offer can be
in the form of
either a letter
or an actual
purchase
contract (the
preferred format
when working
with an agent).
Whichever format
you choose, make
sure that you
clearly specify
all of the
required
information and
terms in the
offer. If you
are
pre-qualified
for a mortgage,
offer to provide
a copy of your
approval letter
to strengthen
your hand.
Counter-Offer
and Negotiation
Instead of
accepting your
initial offer
the seller will
probably respond
with a
counter-offer.
After reviewing
the
counter-offer
you are
essentially back
to the beginning
of the offer
process - but
with a better
idea of the
seller's
negotiability.
Consider all of
the information
and decide if
you are willing
to increase your
price. This
offer and
counter-offer
phase of the
negotiation is
often done
verbally -
through the
agents or even
at a meeting of
buyer and seller
- with revised
contracts signed
after price and
terms are
accepted by both
parties.
A properly
written contract
sets forth the
terms of the
sale and
protects the
interests of
both buyer and
seller.
The Contract
The contract
specifies the
terms of the
sale and the
rights and
obligations of
the buyer and
the seller. A
well-written
document
protects both
parties, while a
poorly drafted
contract can
cause serious
problems.
Get it in
Writing Oral
agreements are
usually
difficult or
impossible to
enforce, so if
you've
negotiated your
purchase
verbally make
sure to have
contracts signed
as soon as
possible.
Attorney Review Always make
sure that any
contract you
sign has an
attorney review
clause that
allows you time
(at least three
business days -
preferably five)
to review the
document and
have it checked
out by your
lawyer if you
feel it is
necessary. Many
states specify a
mandatory review
period, whether
it is specified
or not, but
don't take any
chances - make
sure it's in
writing. This
gives you the
chance to make
sure all bases
are covered
before you are
committed.
Choose an
Attorney or
Escrow Company In some
areas it is
standard
practice to
retain an
attorney to
handle the
closing. In
others the norm
is to have the
title or escrow
company handle
the transaction.
If you do hire
an attorney
(which is a good
idea), try and
find someone
local who
specializes in
real estate
closings. An
experienced real
estate attorney
can help you
move quickly to
closing and
sidestep any
problems or
oversights. If
you are using an
escrow company,
make sure that
they have a
solid track
record.
Cover All
Contingencies
Make sure that
the contract
covers all
contingencies of
the purchase and
allows
sufficient time
for any required
activities or
testing (i.e.
obtaining a
mortgage, home
inspections,
etc.).
Reasonable
contingencies
are essential to
protecting
yourself in the
purchase - don't
allow anyone to
pressure you
into skimping on
due diligence.
Learn About
Deeds and Title
The deed is a
legal document
that transfers
ownership of the
home. There are
several types of
deed that can be
used for your
purchase as well
as a number of
special
provisions that
may apply to
your new home.
Your attorney or
escrow agent can
answer any
questions you
have on title
and deeds.
Know Your
Deposit
Obligations
The contract
should specify
the due dates
and disposition
of earnest money
and deposits.
Typically a
small amount is
posted at the
signing of the
contract with
the balance of
the deposit
(usually 10% of
the purchase
price) due
within 1-3
weeks. Don't
agree to a
schedule you
cannot meet - if
you need extra
time to line up
the funds,
specify this in
the contract.
