1. Sell First, Then Buy
If you have a house to sell, sell it before selecting a house
to buy! I haven’t seen a contingent sale work in the last 3 years, unless
it’s with a new home builder who has other houses to sell and can afford
to put one on a contingency. Let’s pretend that we go out looking
for the perfect house for you. We find it and you love it! Now you have
to go make an offer to the seller. You want the seller to reduce the price
and wait until you sell your house. The seller figures that’s a risky deal,
since he might pass up a buyer who DOESN’T have to sell a house while he’s
waiting for you. So he says OK, he’ll do the contingency but it has to
be a full price offer! So you see, you paid more for the house than you
could have because of the contingency. Now you have to sell your
existing house, and in a hurry! Otherwise you lose the dream house! So
to sell quickly you might take an offer that’s lower than if you had more
time. The bottom line is that buying before selling might cost you TENS
OF THOUSANDS of dollars. I always recommend that you sell first, then buy.
If you’re concerned that there is not a house on the market for
you, then go on a window-shopping trip. You can identify possible houses
and locations without falling in love with a specific house. If you feel
confident after that then put your house on the market.
Another tactic is to make the sale "subject to seller finding
suitable housing". Adding this phrase to the listing means that WHEN
YOU DO FIND A BUYER, you will have some time to find the new place. If
you don’t find anything to your liking, you don’t have to sell your present
home.
2. Play the Game of Nines
Before house hunting, make a list of nine things you want in
the new place. Then make a list of the nine things you don’t want.
I call this "NINE OF THIS AND NONE OF THAT". You can use this list as a
scorecard to rate each property that you see. The one with the biggest
score wins! This helps avoid confusion and keeps things in perspective
when you’re comparing dozens of homes.
When house hunting, keep in mind the difference between "SKIN
AND BONES". The BONES are things that cannot be changed such as the
location, view, size of lot, noise in the area, school district, and floor
plan. The SKIN represents easily changed surface finishes like carpet,
wallpaper, color, and window coverings. Buy the house with good BONES,
because the SKIN can always be changed to match your tastes. I always recommend
that you imagine each house as if it were vacant. Consider each house on
its underlying merits, not the seller’s decorating skills.
3. Don’t Be Pushed Into Any House
Your agent should show you everything available that meets your
requirements. Don’t make a decision on a house until you feel that
you’ve seen enough to pick the best one. Go to the Multiple Listing computer
with your agent to make sure that you are getting a COMPLETE list.
In the late 1980’s, homes were selling quickly, usually a few
days after listing. In that kind of market, agents advised their clients
to make an offer ON THE SPOT if they liked the house. That was good advice
at the time. Today there isn’t always this urgency, unless a home
is drastically under priced, and you’ll know if it is.
Don’t forget to check into the SCHOOL DISTRICTS of the area you’re
considering. Information is available on every school; such as class
sizes, % of students that go on to college, SAT scores, etc. You can get
this information from your agent or directly from the school.
4. Stop Calling Ads!
A word of caution - agents create ads solely to make the phone ring!
Many of the homes have some drawback that’s not mentioned in the ad, such
as traffic noise, power lines, or litigation in the community. What’s not
mentioned in the ad is usually more important than what is.
For this reason, I want you to be very careful when reading ads. Remember
that the person writing the ad is representing the seller and not you!
The most important thing you can do is have someone on your side looking
out for your best interests. Your own agent will critique the property
with an eye towards how well it meets your needs and will point out any
drawbacks you should know about.
So whether you decide to work with me or not, pick an agent you feel
comfortable with and enlist the services of that agent as a buyer’s broker.
Then you become a client with all the rights, benefits, and privileges
created by this agency relationship, and you’re no longer just a shopper.
Did you know that many homes are sold WITHOUT A SIGN ever going up or an
AD EVER BEING PUT IN THE PAPER? These "great deals" go to those people
who are committed to working with one agent. When an agent hears of a great
buy, who do you think he’s going to call? His client, who he has a legal
obligation to work hard for you, or someone who just called on the phone
and said "keep your eyes open"? So to get the best buy on a property, I
always recommend that you hire your own agent and stick with him.