While we mostly rant about what you should do while buying a house, in this blog, we are going to run you by several things you should do while purchasing your home.
1. Study Your Market Well
In a seller’s market, the seller has an advantage over the buyer, and in a buyer’s market, the buyer has the edge. Currently, we are observing a seller’s market as home prices face upward pressure due to lower mortgage rates and an increase in buyer interest post the opening of lockdown. Understanding the real estate market is the first step to making a successful home purchase.
2. Understand the Fair Market Value
The ability to determine the fair market value of a property will influence how you negotiate for a property. For example, just because a buyer does not have sufficient funds to purchase the house, does not mean its market value is less. It often happens that a buyer offers a price lesser than the list price when the house is every worth its price and might even go 10% to 15% above its asking price. You could miss the opportunity to own the home if you do not know how to determine the Fair market value.
3. Learn How to Negotiate
Negotiation is an intricate process, and always starting from a low offer does not work well. As a realtor, I have spent hours negotiating with sellers, and therefore, I understand their psychology well. To make a good strategy for negotiation you must consider several factors, such as a) the Fair market value of the house, b) the market dynamics and which way its trending, c) understanding seller’s needs, and d) your requirements in a house you want to buy. When we consider all these factors, we then make a balanced strategy to make an offer that does not push the seller away in case the house ranks number one in our favorites.
4. Be Real
Often buyers are working against their own goal and are, therefore, going in circles. I have met buyers who are looking to buy a house in a price range in a specific neighborhood, which is impossible to get. Consider, for example, you are looking for a house in Los Gatos, CA, in the range of $300,000 with four bedrooms and a front and back lawn. Now that is impossible to get because most properties in that area are expensive and sell for over a million dollars.
5. Do your Due-Diligence
When buying a house, you should never take anyone else’s word for it when the factor is important for your decision-making process. For example, if you care for the condition of amnesties and electrical wiring of the house, you should make sure to check things yourself or take an electrician along. Do not believe things to be in excellent condition because the seller said so, or the agent said they were in good working condition. It is going to be your house. Hence you have to ensure you check these details yourself.