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Straightforward Tips For Smart Homebuying

Brought to you by 904living.com providing Jacksonville real estate Source: 904living.com

For many people it never pays to be well informed better than when buying real estate.  This rather incremental process is entered into sometimes for the highest levels of naïveté.  Outlined herein are the critical factors of the home buying process where being informed well means saving a lot of money and being poorly informed leaves you vulnerable to everything from poorly managed contracts and services to outright unscrupulous tactics to part you from more of your money. 

Take this valuable advice and come out ahead in your homebuying transaction.

 

 

 

 

 

Tip One

EDUCATE YOURSELF ON THE MORTGAGE APPLICATION PROCESS

A stitch in time saves nine.  Or maybe you prefer Abraham Lincoln’s,

If I had eight hours to chop down a tree, I’d spend six hours sharpening my ax.  

Point being, don’t wait until you’re ready to start looking for homes to go out and get a loan pre-approval.  Start sooner.   

Don’t worry about getting multiple pre-approval letters from different lenders though.  Just get one from a reputable lender and then get a couple of competing quotes when you’ve actually put a house under contract and are beginning the actual application process. 

A good benchmark for your mortgage pre-approval quote is the Freddie Mac weekly mortgage survey.  This will give you an interest rate average for all conventional loans from the week prior.  It also breaks the information down by region, which is helpful. 

Tip Two

USE RSS FEEDS – OR, EMAIL ALERTS… 

Because when you’re trying to get a great deal.  Speed matters!  Click below if you’d like a quick tutorial on how to set up an RSS feed for your favorite neighborhood(s).

Tip Three

SINGLE AGENCY VS. TRANSACTION BROKERAGE

Do some research to understand the agency relationship you have as a buyer in Florida.  I’ve known many a buyer who thinks calling off of the sign in the yard, and using the same agent as the seller, is the standard operating procedure.  Not the case.  In that scenario, the agent putting the deal together would be functioning as a Transaction Broker (you can see the list of duties provided by a Transaction Broker below).  Long story short, the job of the agent becomes as simple as sending paperwork back and forth.  No negotiating tips or advice, no strategy to make this a better deal for you, none of that…

If you’re looking to maximize your real estate agents negotiating ability, transaction knowledge, and area expertise – then you need a Single Agent.  The technical difference is this: Loyalty, Confidentiality, Obedience, and Full Disclosure.  The practical difference is that now you have someone, by contractual duty, on your side to get you the best deal.       

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Tip Four

NARROW YOUR FOCUS

One of the biggest mistakes I see buyers make in the early stages of their search, is allowing themselves to think that everything on the market is an option for them.  In The Art of Choosing, Sheena Iyengar makes an interesting observation about human behavior.  She points out our distinct inability to make a decision when we have too many options available to us.  Inversely, we are more able to make a decision and are happier with the choice when fewer options are available.  From the book, “those consumers that were presented with fewer options were six times more likely to make a decision as to which jam they’d be happy purchasing.” So, you might have to get rid of some good areas, neighborhoods, or even houses to get to the great areas, neighborhoods, and houses!

Tip Five

DON’T FALL IN LOVE WITH THE PROPERTY

Or, feel free to fall in love with the property, but realize that getting a good deal and loving the house can be two competing interests.  Reason being, a good deal is derived by finding an owner who is motivated to sell at a compelling price because they either: 1) Don’t care, or 2)Don’t know.  The house itself has very little to do with it.  Even if it’s in terrible condition, you still need an owner whodoesn’t care about doing the repairs, and that’s why they’re selling for a good price.This can be a bit of a rarity as Dan Ariely pointed out in his book Predictably Irrational.  “When we own something – whether it’s a car or a violin, a cat or a basketball ticket – we begin to value it more than other people do.”

Sticking point.  Focus on making multiple offers on properties that fit your criteria. Don’t pick one house and go after it with all of your might.  This is not something you would normally hear from a real estate agent – as agents only get paid when you buy a home.  So for you to make multiple offers means that the agent has to do more work.  But that’s the truth about getting a good deal!  

Tip Six

KNOW THE AREA

Drive by potential neighborhoods during odd hours.  Maybe you hate garage sales?  Then you should check that subdivision out on a Saturday morning to see if you need to steer clear!  Or, maybe loud parties aren’t your thing…  Take a cruise down the street on a Friday at 11PM with the windows down.  It’s not a difficult thing to do, and it may drastically effect your opinion of the neighborhood. 

Tip Seven

STAY ON MISSION

The home inspection has more issues than you anticipated.  

The lender starts asking for paperwork that you’ve already given them twice.

The closing date that was originally scheduled gets pushed back, and then it’s changed for a second and even third time!

All of these things can seriously add to the stress level of an expectant homeowner.  But expect something to happen. Buying a house isn’t like buying a TV, or even a car.  Given the value of the asset and the longevity of the decision, the stakes are a bit higher.  

So, whatever it takes to persist until the closing papers are signed.  Deep breathing, exercise, or a lot of coffee!  You’ll be happy you didn’t blow-up on the loan officer, title agent, or real estate agent  once everything is done.

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All the best in your house hunting endeavors!