Some tips/thoughts for Buyers

June 14th, 2010

Purchasing residential real estate can be very stressful which is why I always recommend that buyers and sellers have an attorney who practice in real estate ( me) represent them throughout the deal. Here are some good random tips for Buyers based on issues I see come up often….

GET PRE-APPROVED FOR A MORTGAGE BEFORE YOU MAKE AN OFFER.
When you are trying to buy a house in a competitive market, your offer to purchase should contain as few conditions as possible. Conditional offers based on obtaining financing are often a deal killer. The seller may accept a competing offer for less money rather than take the risk that you won’t be able to raise mortgage money. A pre-approval letter from your lender tells the seller you are ready and able to commit.

DO NOT ACT ON EMOTION WHEN MAKING AN OFFER.
When you act on emotion, rather than reason, you may end up paying too much money. This can happen when you fall in love with a particular house and start picturing how great it will be to live there. Another reason you may be driven to pay too much is that a bidding war triggers your competitive instincts and you must buy the house at all costs – which you will regret later.

PUT MONEY ASIDE TO COVER SETTLEMENT COSTS.
You’ve put together a down payment. However, be aware that there are also a list of expenses you may have to pay at closing. Settlement costs can add up to between two and six percent of your deal. Your lender must give you a Good Faith Estimate of the loan-related fees you’ll have to pay. In addition most counties and each state have a real estate transfer tax due at settlement. Have the title company give you an estimation of what you will ultimately need at closing.

INSIST ON A HOME INSPECTION.
This is perhaps the most important item you should do as a potential home buyer. Make sure you have this item selected as a contingency in your Agreement of Sale. You need to have a thorough review of the property so you are educated on any issues it may have before you continue with the purchase. If the seller won’t help bear the costs, or adjust the price, you may still want to go ahead with the purchase, but make sure you can afford the necessary repairs on top of your mortgage.

DO NOT DO A DOUBLE MOVE
If possible, avoid a situation where you’ve got to camp out with relatives or find a short-term rental because you must vacate your old house or apartment before you can move into your new digs. Moving once is enough.

MOST IMPORTANTLY
No matter what stage of your transaction, a smart buyer ( or seller) retains an attorney who is well versed in residential real estate transactions.

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