These five powerful San Jose home buying Strategies are simple but often overlooked tips for finding your CA dream home faster and easier, and improving your bargaining position when making an offer. As a Realtor these are some simple tips I have seen make a difference when buying a home.
1. Get Pre-Approved not Pre-Qualified
Do you want to get the best house you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller. Getting “pre-qualified” means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on your answers, the lender pronounces you “pre-qualified” and issues a certificate that you can show to a seller. Sellers are aware that such certificates are WORTHLESS because none of the information has been verified! Oftentimes-unknown problems surface! Some of the problems include recorded judgments, child support payments due, glitches on the credit report due to any number of reasons both accurate and inaccurate, down payments that have not been in the client’s bank account long enough, etc. So the way to make a strong offer today is to get “pre-approved”. This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. A pre-approval letter is not only POWERFUL, in most cases it is required by the Seller(s).
2. Sell First, Then Buy
If you have a house to sell, sell it before selecting a house to buy! Contingent sales have not worked well for several years. Imagine finding the perfect house. You make an offer to the seller. You want the seller to reduce the price and wait until you sell your house. From the seller’s perspective that is a risky deal. A seller might pass up a buyer who does not have to sell a house while waiting for you to sell your house. They sellers may say OK to the contingency but it has to be a full price offer! You end up paying more for the house because of the contingency. Now you have to sell your existing house, and in a hurry! Otherwise you lose the dream house! So to sell quickly you might take an offer that is lower than if you had more time. The bottom line is that buying before selling might cost you TENS OF THOUSANDS of dollars. It’s possible to make the sale “subject to seller finding suitable housing.” Adding this language to the listing means that WHEN YOU DO FIND A BUYER, you will have some time to find the new place. If you do not find anything to your liking, you don’t have to sell your present home.
3. Create a List of What you Want and Don’t Want
Before house hunting, make a list of the things you want in your new home. Then make a list of the things you don’t want. Use the lists as a scorecard to rate each property that you see. The one with the biggest score wins! This helps avoid confusion and keeps things in perspective when you are comparing dozens of homes. When looking for a house consider the difference between the things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan and the things that can easily be changed like carpet, wallpaper, color, and window coverings.
4. Don’t Be Forced Into A House
Your agent should show you all available properties that meet your requirements. Do not make a decision on a house until you feel that you have seen enough houses and can pick the right one for you. Search the Multiple Listing Service (“MLS”) and make sure that you are getting a complete list. Be sure to check into the school districts. There is information available on every school; such as class sizes, % of students that go on to college, SAT scores, etc. The internet is a great source of information. If you can’t find the information you need, ask you agent for help!
5. Stop Calling Ads!
A word of caution – CA real estate agents create ads solely to make the phone ring! Many of the homes have drawbacks that are not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What is not mentioned in the ad is usually more important than what is. Be very careful when reading ads. Remember that the person writing the ad is representing the California seller and not you! It’s important to have someone on your side looking out for your best interests. Your own agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about. Choose an agent you feel comfortable with and enlist the services of that agent as a buyer’s broker. You then become a client with all the rights, benefits, and privileges created by this agency relationship. Did you know that many homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUT IN THE PAPER? These deals go to the people who are committed to working with one agent. When an agent hears of a great buy, who do you think they are going to call? His client, who he has an obligation to work hard for or someone who just called on the phone?