What You Didn't Know about Purchasing a Home
Written by
More than seven million people visit our site every year looking for unbiased information about insurance and other related topics. And with great readership comes great responsibility, which means we’re dedicated to providing honest and accurate information.
Purchasing a home is an adventure full of highs, lows and bewilderment. You could spend your whole life studying books and advice columns on how to purchase a house and still not know it all. So we've done a bit of homework for you and boiled down a list of five inside facts and tips on home buying that you may not see elsewhere. But first, make sure you're covered with an affordable home insurance policy.
1. The Competition Is More Fierce Than You Think
Many home buyers are confused and frustrated when they find that their first offer on the house of their dreams was unacceptable. They are thunderstruck when it turns out that the seller accepted a bid $15,000 lower than their own. Is this favoritism? No. This is the power of a savvy real estate investor.
According to MSN Real Estate, these investors are pros at shopping hundreds of homes and then expertly swooping in and grabbing the best deal on the market right from under your nose. How do they get that winning bid?
- They have cash in hand or pre-approved financing ready to go.
- They're willing to put down more earnest money than you are.
- They have already finished the inspection.
- They can close two weeks faster than you can because they have a better agent than you do.
You can counteract the expertise of the real estate investor to some extent. You'll have to have pre-approved financing, funds available for earnest money and closing costs, and a stellar real estate broker who works on your side in the negotiations. But don't let the speed get to your head. Always stop to inspect thoroughly, with the help of a professional. You don't want to win a home that has safety headaches, says MSN.
2. You Have To Know How To Walk Away
Credit Sesame, a consumer loan and mortgage resource, advises that falling in love with a house is a bad idea. "Love makes you do stupid things ... like paying too much or looking past costly repair items. As a first-time home buyer, you should develop a healthy ‘like’ for a property, but keep the relationship open, see other houses."
This is especially important when it comes to negotiations. Your agent needs the freedom to fight for your best interests, and, to do that, the agent needs to be able to say with confidence, "If you don't meet our demands, my client will walk away from the deal."
DID YOU KNOW?
The seller knows that the clock is ticking, in most cases.
The buyer has a place to live and no pressing reason to rush into purchasing a home, while the seller often needs to take the best offer as quickly as possible, particularly in a buyer's market. You can use this to your advantage if you are willing to stay emotionally detached and willing to push away from the negotiation table when necessary. Often, you will receive a call from the seller only a few days later with more favorable terms, according to Credit Sesame.
Save on Home Insurance
Our independent agents shop around to find you the best coverage.
3. Your Real Estate Agent Probably Knows the Best Mortgage Broker Around
Real estate broker Tara-Nicholle Nelson says, "When you work with a mortgage broker who has a strong track record of helping your real estate agent's clients out, you end up in a best of all worlds situation, nine times out of ten." If you look at it from a sports perspective, this makes sense.
You wouldn't separate a star quarterback from his offensive line, because they know how to work together and run the plays that get the job done. If your agent wants to guide you toward a preferred mortgage broker, it isn't because the broker has a reputation for making things difficult.
Your agent wants to work with someone who can move fast and close quickly. That's something that the average refinancing expert may not be able to do as well as a broker who is used to dealing with the fast-paced world of home buying.
Working with a familiar mortgage broker also helps your agent get a better feel for what you can afford as you decide how to shop for a house together. Your agent and the broker can work together to get around common hurdles in the process of purchasing a home, according to Nelson, and may even be able to save you money on some of the closing costs and fees by sharing their best contacts and strategies. Don't be afraid to set yourself up with a winning team of people you trust.
4. You Need To Show Up for the Inspection
Many home buyers believe the inspection is a sort of pass/fail, state-mandated deal that doesn't concern them. But according to Nelson, the home inspection is all about you, the buyer. Most homes will pass inspection unless there is something terribly wrong, but that doesn't mean you want the house.
A good inspector will walk through the entire place with you, point out potential problems and inefficiencies, help you spot pest problems, show you the location and function of all the major shut-offs and give you an idea which repairs are significant and which are quick fixes. These are all vital facts you need to know about the home, especially if you end up purchasing it.
"All around, you'll get much more of the detailed information you need, to know whether and how to move forward with the transaction, if you should [sic] up in person to the home inspections rather than just waiting for a copy of the report to come to your email."
5. Look Before You Leap into the Process
If you look back over these four insider tips on purchasing a home, you may notice what all of them have in common: serious investment of your time, emotions and money. One of the most important considerations to take into account as you start the process of buying a house is whether you are ready to make the necessary investments and commitments to buy a home and make it profitable.
Trulia estimates that, in a hurting local economy, it takes seven to ten years to make a home purchase worthwhile. In a thriving local economy, it takes three to five years, at the least. But once you know you and your family are ready to take the plunge and start the adventure of home ownership, do it with both eyes open, a willingness to walk away and a team of agents and brokers you trust. That way you're very likely to find the right house for yourself.
Once you've landed a deal on your dream home, get the best price on homeowners insurance by talking with an independent insurance agent. Agents in our network can shop around for you, to find exactly the right coverage at a price that fits your budget. Then you can enjoy your new home with peace of mind and a local insurance agent ready to help you when you need it.