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Finding the home is the fun part. Once the home is selected, preparing yourself for the negotiations, victories and disappointments is the tough part. When you're entering this process, it's important you remember a few tips.
1. Know you're talking points.
The REALTOR® you have chosen to work with you through this process needs to have talking points about your offer. First, you must justify the price. This can be done in one of three ways. He can price it based off recent comparable closings and show the seller and seller's agent the justification based off of neighborhood history. He can price it based off absorption (or supply/demand model) and communicate holding costs the seller will incur if they hold onto the home for six, ten, fourteen, etc. months. Finally, he can price it based on depreciation. Many markets have seen a drop in prices. If the seller bought his home between 2002-2008, the depreciation model can certainly open their eyes to the market.
2. Know you're walking points.
In negotiations you're working on coming to an agreement on price and terms. Focus on one heavily, price OR terms. Price will likely be the walking point for you; so, don't sweat the smaller stuff like home warranties, closing expenses and possession date immediately. Get on the price train early in negotiations. If you see the price isn't going in the direction you want, start working on the terms that could work for you. If you can't get the price that you want and that is within the market price, be ready to walk.
3. Know you're balking points.
Pick your battles. Once you're in the escrow process, always ask yourself this question...is this situation an "emergency" or an "inconvenience." You might find a lot of heated moments with your lender, agent, inspector, escrow officer, etc. Knowing that most situations are fixable with a little time, effort and knowledge will help you keep stress low. Most issues are truly inconveniences. The emergencies in this world are very few, and in my hundreds of closings, I have only encountered one emergency. It's fine to balk, but breathe prior!
4. Know you're caulking points.
No house is ever perfect. Typically, you need to be aware of the high cost items for repair in the property disclosures and inspection time. Watch for electrical, structural, HVAC and roofing issues. Those typically cost the most money and you'll want to be prepared for that negotiation with the seller. Don't look at the small items on the inspection and nickel/dime those. The seller may bulk all those together and negotiate you out of a major fix. Instead, use the rule of threes. Focus on the three inspection issues that could cost you the most money and focus on them. Sometimes you just need a little caulk!
Distress Sales resulting from bank foreclosures often represent a great way to get a fantastic deal on a home. It's not easy for the average homeowner to find these deals, because you have to keep scouring the paper to see when one comes up.
If you're the type of person who recognizes what a great deal some of these properties could represent, you will be interested to know about a new free service which automatically searches out and downloads a current list of all such properties day in and day out. When you receive this free, no obligation service, you're automatically plugged in to the most current list of Foreclosure Properties on the market, in the price range and area that interests you. You can also have access to updates of the list as new properties are added to it.
Here's how it works. You will receive a FREE report listing the current Foreclosure properties (including photos if available) in your desired price range and location. There is no cost for this information, and absolutely no obligation. This insider information, sent to you in an incredibly simple and efficient format, will give you a huge advantage over other buyers in the marketplace.
You can request this free "Distress Sales and Bank Foreclosures Hotlist" by filling out the form on the right.
Use this mortgage calculator to figure out what kind of house you can afford.
Enter the amount of your expected mortgage in the "Loan Amount" field, then enter a time duration of the loan in years in the "Duration" field, and finally provide your loan's interest rate in the "Interest Rate" field, then click on the "Calculate" button below the "Monthly Payments" field to determine the monthly payments for the home.