The Top 5 Tips For First Time Homebuyers !

I decided to spend a moment and focus on buyers for a moment.  I have a lot of information for my sellers, but when it comes to working with buyers I would have to say first-time home buyers are my favorite.  Perhaps I like the "challenge" but it is a different kind of reward when you hand someone the keys to their very FIRST new home ! 

Get Your Finances In Order

Before you start working with a buyer broker, getting a mortgage pre-approval is a must.  I have seen too many homebuyers starting looking before they find out what they can afford.  The result is disappointment that you may have looked at some wonderful homes that turns out does not fit into your budget.   Most licensed brokers will have reliable, and attentive mortgage brokers they work with that they will be able to refer you to. 

Know The Language 

Know the terminology of real estate, you want to understand what brokers are talking about.  Short sales vs Foreclosure, there is a very big difference.  You want to be sure even when you are looking without an agent you have a good understanding of what everything is.  You need to understand the difference between Listing Agents, Buyers Brokers, and disclosure.  Listing agents obviously list the house, and work for the sellers.  Every first time home buyer should work with a Buyer Broker, they will provide you with information about the homes in the neighborhood your looking for, make sure everything the seller is representing is true !

Find A Good Buyers Agent

This is the most important part for a first time home-buyer, you are going to be depending on this person to help you make a life changing purchase.  You need someone who is okay with having to “hold your hand” so to speak during the process, not because you need it but it is a resource that is available to you.  I once stayed in a closing with my first time buyers for 5 hours, it was a short sale and the bank was having its own issue with paperwork which held us up.  Before leaving the attorney, pulled me aside to thank me for staying and explaining what was going on to his clients.                  

Decide What You “Must Have” And What You Would “Like To Have”

I had a home buyer once tell me that she would never purchase a ranch they would never give her the space she needed.  For the most part she was right, almost every single home that was a ranch would not meet what she needed to have.  Before we began looking I asked her to make me a list of her “must have”,  and “like to have list”.  Must haves are the number of bedrooms, a school district, or a price range.  These are things that if they did not have them it would be impossible to move to that home.  Fireplaces, pools, central air, these are all things that you would like to have but, you could live without.  These lists are different for everyone, in this clients case the home she purchased ended up being a ranch.  If we had limited the search she would have missed out on her “perfect home”. 

Should I Spend The Money To Have A Home Inspection?                                                                                                                                  

Absolutely. The $200 to $500 that a professional home inspection costs could be the best money you ever spend on your house. Not only does the home inspection seek out any defects (and gives you some peace of mind), the home inspector will often give you tips on maintaining and repairing your house. See the section on Home Inspections for tips on what to look for and how to choose a home inspector.

For more information on Buyer Brokerage Take a look at my virtual presentation ! 

What Happens After Your Offer Is Accepted

You have successfully gotten an accepted offer it may have been a quick simple negotiation or it may have been a bit of back and forth, but either way you have officially gotten passed one of the biggest parts of the home buying process ! This blog is specifically what will happen with a straight sale, there is a much different process for short sales & foreclosures, I will be writing another blog specifically about those in an upcoming blog.

The next 2 weeks are going to be a very busy time for you, because although your offer is accepted the homeowners will still show it to other potential buyers and place an offer on your dream home !! Lower offers or offers with less desirable conditions will be held as "back up" offers, but their is always a chance someone will outbid you and their offer may have terms that the owner may prefer. That is the reason why time is of the essence so your going to want to get things done as quickly as you possibly can !!

Before Your Offers Accepted - Call Your Mortgage Broker
Your realtor should have already developed a relationship with your mortgage broker, if they have not spoken to them they shouldn't wait any longer to get that relationship going.

Sometimes the seller will want you to get a 2nd mortgage pre-approval, this is not unusual in my business, because I work for a company who has their own mortgage company. A seller can not however tell you who to get a mortgage with, they can only request a pre-approval thru a specific company.

Step 1 - Sales Agreement & Attorney Review
This is a very standard form and is very important to your purchase, this is really sometimes the first step, but if you have had to negotiate and make changes to your original offer you will want to fill out a new updated one to send over to the attorneys. The buyer and the seller will fill this out independently and receive a copy. You attorney will review this document normally without any changes, because the contract will have the specifics credits or add-ons.

Step 2 - Home Inspection
Many companies will have a preferred list of home inspectors, if you already have someone. You want to have the home inspection as soon as possible, even with a first accepted offer. A home inspector should check for of course the obvious red flags: mold, mildew, termite damage, but you also want them to check to make sure of some other things you may not think of. Most will check to make sure that the hot water, actually gets hot, in older home this will take a bit longer but these are things that once you move in can become important. They will also check things in the attics, basements and crawlspaces.

Homes that are remodeled it usually only takes about an hour for a full inspection, and others usually take about 2 hours. You will get a full copy of the report, and they will talk to you about it before they leave the property.

Step 3 - Sign The Contracts
Now depending on how your home inspection went sometimes you will be just going in to sign contracts with no changes, but sometimes there will have been more changes because of things that came up during your home inspection. Remember your offer is still accepted, but now you are going to be changing the terms.

I can appreciate a seller does not want to have to do work to the home but remember no matter who the buyer is there will be a home inspection and if it is a significant problem it will come up again.  That being said sometimes buyers should be reasonable also don't let fear of losing the house force you to overlook a major problem but don't let a little problem cause you to loose your dream home either.

Now that you have completed those 3 steps you can finally take a deep breathe and celebrate a bit about the purchase of your new home.   There are of course a few more steps that will happen between going to contract and your closing, I will write another blog giving you the timeline and what you can expect to be doing next ! 

Buyer Broker VS Brokers Agent !

As many buyers are beginning their spring search, I want to take a moment and explain a specific piece of paperwork that you should be seeing quite a bit of, and that is the New York State Disclosure.  This paper specifies what kind of relationship you have with the agent that you are in communication with.  You should always remember that even if you are working with an agent as a buyer there are still 2 different kinds of available agency with some very important differences ! 

Brokers Agent

This Agent Is Only Working With You 

• The seller’s information is 100% confidential including but not limited to reason for moving, health, or flexibility in price.
• Can send you listings but are not allowed to disclose any information about previous listings, or owner motivation due to disclosure laws. 
• Set appointments on any listings that are being advertised or marketed with the Multiple Listing Service, this excludes any homes with Exclusive Listings & Unrepresented Sellers.
• Will attend showings of homes with you but is unable to give any sort of advice or council on any particular area of the home from price, to functionality for prospective buyer.
• You will not be exempt from being contacted by other real estate agents regarding their listings that you have viewed, the brokers agent & listing agent with this kind of agency are representing the seller. 
• Offers can be placed with a Brokers Agent, comparable homes can be provided to support the seller’s price.  Offer will be placed with the listing agent, who will pass it along to the homeowner.  

Buyers Agent

This Agent Is Working For You !

• Your information is 100% confidential including but not limited to how much you can afford,you reasons for the purchase.
• The seller’s information is no longer confidential if they share why they are moving, or price flexibility you are now entitled to know.
• I will do the “homework” on all the properties that you want additional information on (EX: How long & how many times the home has been on the market).
• I can give you advice and council regarding a home that you are interested in (EX: What home of 3 is a good value in my opinion).
• I am able to bring you into homes of Unrepresented Sellers while reducing your risk if/when you choose to purchase.
• Facilitating you being able to view and place offers on “Exclusive Listings” that are not available to the general public or other real estate agents from non-affiliated brokerages.  
• I can be the “liaison” for not only those involved in the transaction once you find a home but for other agents during the search (Agents You Meet At Open Houses).
• Beginning with placing an offer pulling 3 comparable homes to help you to get the home for the lowest price possible. 
• Presenting the offer in person to the homeowner giving them all information you would like disclosed making sure the terms are clear and understood. As well I have the right as a Buyer Broker to keep the name of my client anonymous from the homeowner and still place the offer.

Deciding Whether To Buy Or Rent, What You Need To Know !

It's that time of year again where we see renters deciding whether or not they will continue renting, or will consider being a new homeowner ! This blog is to help all those considering purchasing answer that most common question "Should I Buy Or Should I Rent?" 

Why Should I Buy A Home Instead Of Rent ? 

It's a fact that in most markets, buying a home is significantly cheaper than renting.  Renting is money you will never get back, but buying a home is an investment in your future.  In most areas, if you can afford to rent, you can afford to buy! For more information on this topic you can refer to my blog, here it will give you both the pros and cons for both buying and renting, as well as offer you alternative options.  

How Do I Know I'm Ready To Buy A Home? 
The best way to know if you're ready to purchase a home is to look at your current situation.  You don't need to be employed with the same place for 2 years, you just need to have had a steady income in one field for the past 2-3 years.  You will want to run your credit and take a good look and make sure everything that is on the report is correct, if not you will want to have it corrected! You will also want to make sure you have money saved up for a down payment, in some cases you can withdraw from an IRA penalty free for a first time home purchase.  For more information on this topic you can refer to my article, here.

How Much Money Will I Have To Pay Upfront To Buy A Home? 
This is not an easy answer, because there are two factors depending on what kind of loan you take and the amount of the loan is what will decide your down payment.  For an FHA Loan you will need to put down 3.5% where a Conventional Loan you will need to put down atleast 20%.  The average cost of a home in Suffolk County is about $325,000 which would require a FHA down payment of $11,375.  

You will also need to factor in closing costs, but you can also ask for a sellers concession or have the money "gifted" to you from a friend or family member.  This ranges again by the loan amount, and any mortgage broker is required by law to give you a good faith estimate of closing costs, this is why you should always choose a reputable bank Of course, Coldwell Banker Mortgage is more than happy to help and you will always be given all of your loan options.

Once you have decided that you are in a financial position that you would like to go ahead and begin searching for your new home there are a few things you should look into.  You will want to learn the difference between what kind of homes are on the market, who you should have working for you, and what happens once you have found that "perfect home".  Because each of these topics are best explained in detail I will list each topic below with a direct link to blogs to help you get informed ! 

• Why You Should Work With A Buyer Broker
• What Kinds Of Home Are On The Market
• Benefits Of New Construction
• Short Sale VS Foreclosure
• What To Offer For That House 
• What Happens After Your Offer Is Accepted 
• What It REALLY Means To Be In A Buyers Market 
• Tips To Finding The Perfect Home

Open House 101

Lets take a minute and talk about some Open House etiquette for those homeowners and buyers !! I am an agent who believes it is better to hold an Open House and have only 1 or 2 people attend than not have one at all and possibly miss out on a prospective buyer for my client. Every agent has their own opinion and way of running their business if you want your agent to have open houses on your behalf you must discuss it prior to listing your home with them. If they don't agree with your opinion simply move onto an agent does !!

Homeowners
Lets take a minute and discuss where a homeowner should be during an open house and their is only 1 correct answer and that is OUT ! You should trust your agent to protect your home and its belongings during an open house, if you don't have that comfort level I would suggest re-thinking why your trusting them to sell it at all. Buyers will always feel like they are intruding on a homeowner when they are present during an open house, it's human nature to feel a bit awkward judging someone's home with them sitting in the living room ! I won't try and say that some buyers aren't a bit nosey during open houses they will open up a fridge or medicine cabinet, but you never know what parts of a home are going to be important-if your agent sees them going a bit extreme with being nosey we of course put an end to it.

I am always amazed by the difference between what one homeowner will do to prep their home verses what others will do. I want to take a minute and set up some general guidelines of what you should do to help your home present well !

• Vacuum & Light Dusting - Don't go crazy with the cleaning products and waxes many times the smell of those cleaning products can be overwhelming and the sticky waxes can make surfaces feel dirty to the touch. Swiffer Dust Pads are really the best thing to use for a bit of light dusting they don't leave any marks or and it's quick and easy !

• Empty The Appliances - Sounds silly but the most common thing a buyer will look inside of is washing machines & dishwashers, run them thru a cleaning cycle before your open house it doesn't need to be sparkling as if its a brand new appliance just clean.

• Laundry - Always the enemy and impossible for it to ever all be clean I know this because I think in my entire life all my laundry was clean once in 30 years. Just make sure none of it is sitting in the washer or dryer, put the hampers in the closet or invest in some that have covers so they aren't so visible, simple fix but you'd be amazed how awkward a conversation can feel in a laundry room surrounded by strangers dirty clothes !

•  Bedrooms - I sometimes feel like a mean mom when I arrive at an open house, your bedroom does not need to look like its not being lived in BUT you do still need to make your bed and clear the debris off of the floor ! 

• Garbage - Put it out in cans that have covers !! There is nothing like a funky smelling garbage pail to turn a buyer away from a otherwise gorgeous kitchen, or showing off your perfectly kept backyard while trying to combat the flies that are circling your garbage.  

Just as important as what the house looks like is what your buyers will receive when they come to your open house.  Ask your agent to show you what they will be setting up in your home to give to prospective buyers, make sure all the information about your home is on the hi-lite sheet.  I also give out town information for those buyers who are not from the area.  You want to make sure your home is memorable for every buyer that comes to view it ! I also have Virtual Tour DVD's this way the buyers can share it with their friends and family as if they were walking them thru it in person ! 

Buyers 

Many buyers feel a bit overwhelmed by the agent who is hosting the open house, this is why I recommend that you work with a Buyer Broker !! When you have your own Broker you still can attend open houses but your agent should give you a large stack of their cards to hand out to the agents of the homes you see. You will no longer need to sign in other than your name, your broker becomes your middle man to deal with the listing agent! Now, as a courtesy to both your agent and the listing agent if your working with you own Broker don't wait to tell us that until your leaving ! We won't treat you any differently but during busy open houses we need to know so we can focus on those people who have no one working to keep them fully informed.

Buyers also need to take somethings into consideration when your attending an open house, I don't care if you come by yourself or bring your entire family the more the better ! But, when you bring your children please keep an eye on them ! This is mainly for their safety, but also for the homeowners belongings that may be interesting to a child to want to pick up and play with.  My job as the listing agent is to show you the house, not watch your children while you mosey around the house.  If you are bringing your child I always recommend having yourself and another adult with you so that someone is able to keep a close eye on them.  I am a mom a very rambunctious 4 year old and I understand that they will touch things, and open and close cabinet doors because they are curious but you still must keep an eye on them.

You will also want to come up with a plan of how to remember the open houses you have attended, I usually recommend that my buyers shoot me a text or an email so I can track them for them.  If your opting to not use a buyers broker than you should have a folder or some place to organize all of the hi lights sheets and information your going to receive.  Remember we are limited on the amount of space we are given on websites so sometimes there will be important information on those Hi Light sheets that aren't listed on the Multiple Listing Service.  It will also give you a place to keep the information you find out about the towns your looking, such as school information this way you can find it all in 1 place ! 

How To Handle Offers On An Overpriced Home !

Finding the right house for a buyer can be tough, not only on the clients but on the realtor as well. When you opt to use a Buyer Broker it can be a bit easier but sometimes the only thing standing between your and your new home can be a seller.

When you choose to use a Buyer Broker they may show you homes that are priced above your price range, and you may wonder why, isn't that a tease since you can't afford the price. Remember just because a home is listed at a certain price it does NOT mean it is worth what the homeowner may want for it! Sometimes an agent will not take the time to educate a homeowner about the current market prior to listing the home or they may opt to go with their gut on price, this makes it much harder on all involved but it does happen.

When it comes to a home that is over priced in any area the negotiations can go a few different directions but will always require patience and strategy when it comes to putting in an offer. You will of course want to review the comps in the area carefully with your Buyer Broker, because you will want to be confident in your price being fair. Putting in a offer below the market value will make negotiations much harder, because your leaving a bigger gap between what you want to buy it for and what they believe the home is worth. When your agent presents the initial offer that is when you will normally find out why the home has been priced higher than fair market value.

Once your agent has put in your initial offer that is when you will begin to be to strategize what kind of negotiation style you will use when it comes to how you will counter.

If the homeowner comes down to a significantly lower price point it is a sign that their agent is educating them about what their home is actually worth in the current market. You will want to do the same with your counter in order to show them that you are a serious buyer! If your only around $10,000 apart in price sometimes offering to split the difference between is fair and will sometimes get you an accepted offer ! Remember whether the home is over-priced or fair value your best way to get an accepted offer is to put yourself in the sellers shoes!

If the homeowners barely budges off their price, either their agent has attempted to educate them with no success or they simply think the home is worth more as well. The conversation between your Broker and the Listing agent will clear up which one is the case.

This is where things can require quite a bit of patience, sometimes your best bet is to back off of a seller and give them time to sit on the market, and see for themselves that no one will buy their home for that price. It is a risk when you do this, and you should only do this if you have tried presenting at least 2 reasonable offers and your still significantly far apart on price. By far apart I mean over $20,000 and if the seller has not given reasonable counter offers !!

You will also want to be sure your agent keeps in contact with the listing agent, you don't want to wait to see a price reduction on MLS because than you may find yourself in a bidding war because of other buyers looking at the new price ! You shouldn't stop looking at houses either while you are waiting out a seller. Many times I have buyers who look at quite a few other homes in the interim and it helps puts in perspective what their money can buy. You may decide that your willing to pay a bit more than you originally decided for a home, or you may find a better home !

Once the homeowner has had sometime sitting on the market you will than see if they really want to sell their home, or if they were just putting it out their to see what would happen.

Before you place another offer on the house schedule another showing with your broker to go and see it again, ideally when you know the homeowner is going to be home. You want them to know your still interested in their home in case there agent doesn't remind them of your previous offers !!

Make sure when you present your next offer don't skimp out make sure that your agent reminds them of all the details of your offer.  You may still need to do a bit of negotiating but again patience is key ! If the homeowner is still not being reasonable you may have to continue to wait it out, you may end up finding a better home but I'm always certain for every buyer is the perfect home !

Most people think the number one reason to use a Buyers Broker is so that you don't over pay for a house, but that is not actually the most important. It's not always about making sure you don't overpay but also about making sure you don't miss out on a home because of trying to under value someone's home. The best reason to find yourself a Buyer Broker that you trust is actually to make sure you don't miss out on a home that would be a great fit for you period.

Rent Vs Buying ? Are you ready ?

If your thinking about buying a home rather than renting there are some very obvious reasons that now is the time to buy but lets take a look at 3 of the best reasons you should buy now! 

• Low Interest Rates 
• Homes Priced To Sell 
• Inventory Of Homes To Choose From 

Now of course there are always pros and cons to both renting and buying, so lets take a quick look at those.  

                                                                                          

Renting Pro      Ability to move easily, this is important for those who often travel for work. 

Renting Pro      Renting you are not responsible for many things such as roofs, leaks ect.

Renting Con     Your money rent will never earn you any return.  

Renting Con     Increase in rent according to the market and become more costly than owning.

Buying Pro       Tax deductions on property taxes, interest. 

Buying Pro       Ability to take from your IRA penantly free for down payment.

Buying Pro       Work done to your own home raises its equity 

Buying Con      Upkeep goes into owning a home choose a home that fits your needs 

Their are many experts saying that one year from now everyone will be saying that they should have bought a home in 2012.  I have to say I would have to agree with that statement, buyers that are thinking they may want to try and buy a home should call a mortgage broker and see if they qualify immediately ! Now if your not quite ready to make that call and your just curious whether or not you could qualify lets take a look at some of the things you will need to have in order.  

1. Credit Score - Obviously you need to have decent credit but most banks will work with you if you have a credit score of 625 or higher.  
2. Work History - You need to have been consistently working in a field for 2 years to show consistency in your income.  
3. Debt To Income - This is just as important as your credit score, take a look at this simple calculator here for your debt to income ratio.  
4. Available Funds - Most down payments now are minimal at 3.5% on a FHA Loan which on a $250,000 home is only abut $8500, plus your closing costs.  Taking penantly free from your IRA is a great option also, allowing you to only need to budget for closing costs which on average can be $8,000 - $12,000.  

Lets take a look at some of the statistics for our current market to give you an idea of what kind of money you may want to expect to spend on a home.  

Now you can see that we are staying generally around the $300,000 mark, but for someone looking for the average home can comfortable purchase between $250,000 - $300,000.  

The average whole house rental for a 3 bedroom, 1 bath home here on the island will cost you about $1800 or higher, and normally you will still be responsible for all of the utilities on top of that.  Your costs on a renting a home would be much better spent on a home that you own! 

Other Available Options 

There are plenty of homes out their for first time buyers, and not only is New York now offering grants to help you but many towns and villages are building housing developments specifically for first time buyers.  A great example of this is the Courtland Square Condos, that are new construction condos that were recently built here in Bayshore.  

These condos offer a unique opportunity because the price of the condo is not decided by the builder or the buyer, it is decided buy the buyers income.  If your salary is under a certain amount than in turn the price of the condo will be one particular price.  There are certain rules and regulations that must be followed when you are purchasing one of these such as, it is required you take a class to learn about the responsibility of home ownership and you also must fill out a detailed application form.  To better educate you on this type of application it is available for PDF Download here.  When you purchase one of these condos the state and town are paying almost $100,000 in grants to help you get your first home! 

Another option is Rent To Own, now this is something you need to be very careful with.  You must meet with an attorney before you sign into something like this, but for some that are just looking to either fix a credit issue or save up a bit more for down payment it can be a great option.  There is a difference between Rent With Option To Buy, and Rent To Own: The difference between the 2 is pretty simple one gives you the option to buy, and the other locks you into buying the home within a particular time period.  

If you are thinking about purchasing a home but are still undecided about whether or not now is the right time to buy and would like additional information please feel free to contact me directly! 

Listing Agent Friend or Foe ?

I often reference Buyer Brokers in my blogs it is time for me to write a very specific blog about it.  I happen to quite often sell my own listings but my advice to anyone who is just beginning their search is to take the time and find a broker to work for you specifically.  

Listing agent friend or foe is something that I am always asked, and it really does depend on the broker.  I have been the listing and selling agent on quite a few of my own listings, but I am very upfront and honest about what that means.  In the end there will be no way to know which you have gotten friend or foe until it is too late, once you place an offer with a listing agent there is no going back to change it. 

Look at it this way, why would you pay someone who you only likely met once for finding a house you found on your own? If that isn't enough reason for you than take a look at some of the other reasons you should hire yourself a broker! 

There are a few very specific reason why you should hire your own buyer broker.  

• Your Paying For It - In every real estate transaction their is a Listing Agent & Selling Agent, the commission for both of these agents is decided when the home is listed.  Obviously the listing agent is just that, and will collect their share of the commission no matter who sells it.  The selling agent should be your Buyer Broker, but if you don't hire one than the listing agent now becomes selling agent as well and collects the commission for both.  

• Your Own Expert - Unless your a real estate agent, their is certain information you will not be able to obtain.  This is information you will need and want to know before you even place an offer on any home ! When putting in an offer you want to be fully informed.  How long has it been on the market ? How many owners has it had in the past 10 years ? Is it overpriced or action priced ?                                                                                                                                

• Someone To Do The Work - Ask anyone who has bought a home the hardest most time consuming part is finding the house.  There are so many homes on the market that those late nights looking thru MLS and Trulia you may get what I call "Click Finger" it is where you are scrolling thru so many homes you begin to overlook the new ones because your just clicking away.   An agent who is working for you will be looking for you, this way when a listing comes onto the market that fits what your looking for they will reach out to you, and email you the listing which guarantees you will not miss out on anything. 

• Your Middle Man - Your own broker means you can openly speak your mind about a home, and get an unbiased opinion.  The listing broker wants to sell that listing, which means he is of course biased to his own listing.  Sometimes when you walk into a house you may know right away it is NOT for you, your own agent can be the middle man to get you out of the home quickly but politely with no awkward moments! 

• Your Middle Man -  What about those houses that don't have any pictures online.  You don't particularly like going into these houses blind.  Guess what your own broker will either A. Be able to preview you them for you or B. Get the agent to send over pictures for you to see.  

• Your Representative - You will still attend open houses when you have a buyers broker, more than likely they will be holding their own open houses so they will be unable to accompany you. The old saying "Have your people, call my people" can be a great benefit.  A buyers broker will prevent you from getting calls from all of those listings agents trying to sell you on their own listings.  Just leave your agents card with them, and they will contact your agent directly ! 

The steps to finding your broker are quite simple, you call or request information online from local buyer brokers in your area.  I would recommend finding someone who is familiar with your area, and that you mesh well with.  When you meet with them it is you interviewing them, ask them the questions that are important to you, remember you don't need to pick the first one who comes in to meet you.  Here are a few tips on choosing your broker. 

• How many buyers are they currently working with ? 
• How often do they take their buyers out to look at homes ? 
• Do they send you listings, what tools do they have to help you in their search ? 
• How many mortgage companies are they familiar with, as well as what kind of financing are the familiar with ? 
• How quickly did they answer your request for information ? 
• What kind of follow up did they do after your appointment with them ? 

The process of buying a house can be long and stressful. My best advice would be to make your life a bit easier and find yourself a buyers broker before you begin seriously looking.  You are paying for a buyers broker when you purchase your new house so why wouldn't you use one? 

Now I am going to give you some examples of where having a buyer broker on your side is important.  

Example #1

Seller Joanne has her home listed for $375,000 Buyer Marie is interested in purchasing the home.  Seller Joanne Listing Agent agrees to take a offer from  Buyer Marie as long as she signs the disclosure explaining that it is his listing. He mentions it has had quite a few showings and is expecting other offers he insists that the home is worth the full $375,000.  Buyer Marie budget tops out at $360,000 but does not want to lose the house so she puts in her highest and best offer to get the home.  

Now your probably asking what is the problem with that ? Well, no where in that did anyone look out for the buyers best interests.  Now lets look at how that would happen if their was a buyers broker involved.  

Marie's Buyer Broker Rich checks to see how long the home has been on the market, it has been there for almost a year with no price adjustments.  Broker Rich runs the comparable sales of homes in the area and finds they are not worth a $375,000 asking price it is much closer to the $350,000 mark.  He meets with Marie and they come up with a reasonable first offer, and after a bit of negotiating and sharing of the comparable homes Marie is able to get the home for $349,000 ! 

Now does this happen all of the time NO, but it is the risk you take whenever you buy a home but don't have your own broker.  Now money isn't everything but lets look at another example, this having to do with functionality & safety.  

Example #2

Buyer Marie finds a wonderful home and Seller Joannes home has been on the market and is happy to have an offer.   Sellers Joannes Broker is the only agent involved, and takes the offer and gets the home into contract.  He explains the Seller Joanne has filled out the Property Disclosure pamphlet so there is no real need for a home inspection, and the market is moving quickly in that area.  Buyer Marie does not want to waste anytime this is the perfect house, and opts to skip the home inspection.

Buyer Marie places her fair offer and closes getting the home for a reasonable price.  After moving in she finds that the renovations that had been done over the years were not quite up to standards.  Although the Central Air was properly installed the electrical was never upgraded to handle the CAC and the other appliances in the house.   Luckily Marie finds this issue and upgrades the electric to be able to handle the CAC and the appliances.  While upgrading the electric she finds that not all of the outlets are up to code, and there was a non-GFI outlet in both bathrooms as well as the kitchen, which posed a fire hazard.  After about $15,000 in electrical work Marie is finally able to use her CAC and all of her outlets safely and without issue.  

What To Expect When Your Looking For A Short Sale !

Many of today's buyers are opting to take advantage of getting a "deal" on a short sale, now I previously wrote a blog explaining the process of buying a short sale.   I want to take a moment to explain a bit further not the process but what you should expect to see, and how you can prepare yourself for looking at these homes.  If you are looking for information on the process please refer to this blog.

So you have decided your going to get a deal, and you are on the lookout for that home you can steal off the market.  Well let me prepare you a little bit for what you may walk into, remember these homes are often time distressed or abandoned.

Before you even start looking at short sales you must remember a few important points.

1. There is still a homeowner involved even if they have abandoned the home, unless they have made other arrangements they first have the right to accept or reject your offer.  
2. You have the right to have a home inspection performed on the house, but that is as far as it will go there will be no repairs made to the home. 
3. Anyone looking into a short sale should also become educated on a what a rehab loan is, some of these homes will not be mortgageable and will require a rehab loan.  
4. "Sold As Is" means just that, many people assume that it just means that no repairs will be made but it also means that any CO issues the home may have not and will not be addressed.  

If that hasn't scared you off from purchasing a short sale, let me give you some reassurance.  Not all short sales are in bad shape and/or have CO issues.  Most of our short sales that are coming onto the market are actually still being lived in by the homeowner so let me prepare you a bit more.

• As I said earlier the homeowner still has the right to negotiate before any offer gets submitted to the bank, the chances of "stealing" one of these homes are slim because the bank will want at least 96% of what the market value is, and the homeowner will want the process to go as quickly and smoothly as possible so submitting a low offer would do nothing but waste everyone time.  

• Not every homeowner will be happy that their home is for sale, and to be quite honest some of them will be flat out rude to you.  Don't take it personal, and do not rush out on their account take your time and look the same as you would if the homeowner was being nice.  Sometimes getting into these homes can be a bit more difficult so you want to make sure you see everything while you are there.  

Those that are well versed in DIY projects, or who have family in construction are the most likely buyers to purchase and mortgage a distressed property.  When you are going out to these homes there are a few important things you should really be prepared for, and this is the most important part of this blog, remember this is specifically for vacant distressed homes.   

• Ladies, this first one is for you and I speak from experience when I am saying this.  DO NOT wear heals/skirts/open shoes when you are going out to look at these homes.  Even in this heat I would recommend wearing jeans or long capris rather than shorts.  Some of these homes have been vandalized and their could be glass, or debris laying around and worst case there can be mold in some of the areas of the house or exposed insulation that can irritate your skin.  

• Bring your flashlights and be prepared to use them, even on the sunniest day these homes can be eerily dark.  Most of the time this is caused by the boarded up windows, and doors but the lack of electricity at night is always an issue.  You will also want to consider bringing some hand sanitizer, some of these houses can be a bit on the dirty size so if you are anything like me you will be very happy to clean up a bit after being inside.  

• View these homes during "normal" hours, this is all about your safety.  You will have to use flashlights to see and your site will be way to limited in the evening hours.  There is no way to know if squatters have been using this home for a warm place to sleep, and viewing these homes in the late evening hours is just not safe.  

• NEVER close the door behind your agent, again this is all about your safety as well as your brokers, you never know what your walking into.  By leaving the front door open you are making it clear to those neighbors and other agents who may be showing that you are in the house, and they will be able to hear you inside god forbid something is to happen.

Now I know that all that may make you think it is not worth looking at short sales at all, but it is rare to see homes in this extreme distress anymore.  It is much more typical that the homes are still being lived in or taken care of by neighbors but I have quite a few buyers who are looking for this kind of project coming to me over the passed few weeks.  The best way to find the short sale that is right for you is to talk open and honestly with your agent, here are a two easy ways we can help you before you even step foot into one of these homes.   

• As brokers we have access to things that you do not, if you would not consider a home that would require a rehab loan we have the ability to check the agent listing to see if the home would require one or not before you go and look at it.  

• Many of these short sales will not have pictures attached to the listing, don't discount them just based on that if you are nervous about seeing these vacant homes because you would only want to do cosmetic work, see if your agent would be willing to preview them for you.   

The best piece of advice I could give you when your buying a short sale is to expect the unexpected ! Short sales are not for everyone.  The good news is that we are not seeing any large amount of short sales coming onto the market at the rate they were in previous years, and we are slowly seeing these homes sold !

If you are looking for additional information regarding the purchase of a short sale property and have additional questions were not covered in this blog please feel free to leave your question as a comment, or email me directly!