Anyone can go through the process of buying real estate in Orange County! But, will their process be succesful or an absolute nightmare?? In a previous blog post I went over the First 3 Steps in the Home Buying Process. Here I will cover steps 4-6 of buying a home in Orange County.
When people think about home buying they automatically think about the home viewing process. This is an exciting time but it can also be very stressful. If there are many homes on the market that meet your criteria it can be overwhelming. Be open minded about the homes you are planning to see. Many homes look great online but not so great in person and vice versa. Try to not see too many homes in one day. Unless you are extremely time limited, it’s difficult to see many homes in one day. After awhile it will be difficult to even remember the distinct details of each home. When I go out with a buyer I provide them with a summary of each home we are going to see.
I encourage every buyer to make notes about the homes seen and to immediately rate homes as possibilities or not. Homes that make the short list should be visited a second time if possible. When you have found a home that you think might be THE ONE, drive through the neighborhood at different times of the day, do a dry run to work or public transportation, look into the schools and the crime stats. It’s important that you check out all angles before making an offer, after all, this is likely to be the most expensive purchase you have made. Do not let anyone rush you into making an offer on a home if you are not sure.
Making an offer is one of the most important steps in the home buying process. If you offer too much, the property might not meet the appraisal. This means you could have trouble getting a mortgage loan. On the other hand, if you offer too little for the home, the seller may reject it. Here’s the bottom line. If you make a real estate offer based on solid data and advice, you’ll be less likely to encounter any snags and more likely to get the home! So let’s talk about what it takes to make such an offer when buying residential real estate for the first time. In particular, let’s go over the steps that should take place during this process.
- The three basic components of your purchase offer are price, terms and contingencies.
- Price is the dollar amount you are approved for, willing and able to pay.
- Terms cover the other financial and timing factors that will be included in the offer.
- Contingencies are clauses that let you out of the deal if the house has a problem that didn’t exist or which you weren’t aware of when you went under contract. They specify any event that will need to take place in order for you to fulfill the contract.
You have two goals in home buying negotiations and, oddly enough, they are sometimes in conflict with each other:
- To get the best deal you can
- To get the house
To achieve both, you’ll probably have to make a few concessions to the seller. Before negotiations begin, think about your priorities: where you’re willing to give and where you aren’t. You need to identify what’s critical to have, what’s important to have, what would be nice to have, and what you could live without and never miss. By having this list, you will be better prepared than the seller in the negotiations. General Negotiating Tactics
- Give to get. By holding a hard line early, you can make it seem as if you care about certain terms that don’t really mean that much to you (remember that list?). Then you can let the seller have his or her way on those terms in exchange for other concessions.
- Focus on issues you can solve. If in each round of negotiation you focus on what you can solve rather than what you can’t, you can build up momentum and goodwill and make big issues seem smaller.
- Always ask for a trade off.
- Taper your concessions. Don’t compromise the same amount every time, make your concessions smaller and smaller.
- Never offer to split the difference. Let the seller make that offer. THEN offer to split the difference between what they’ve just conceded to and your original offer.
- Never allow the negotiation to be narrowed down to a single issue. There is always a winner and a loser in a single-issue negotiation. If things have gotten to this point, introduce more issues!
- Don’t assume that price is the only issue. Your seller may be more interested in a specific closing date or in some other issue.
What are your thoughts on steps 4-6? Do you agree completely or would you do it a bit differently? Steps 7-10 are coming soon! Do you want your own copy of the Home Buyers Handbook? Then like this blog post below and request it in the comment box below: