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5 Things Buyers Should Know

Buying a house? Consider these tips.

1. A buyer’s agent represents you – If you are looking to buy a home, the first thing you should do is find an agent that will assist you and more importantly represent you in making an offer.  There are several reasons for this. The first and most important is the fact that the listing agent represents the seller. Their job is to get the most money for the seller, not the best deal for the buyer. The commission for the buyer's agent is paid for by the seller during the transaction, so having an agent costs you nothing. The buyer’s agent can schedule showings of any homes listed. A buyer’s agent will also be able to look at past solds in an area and help you negotiate an aggressive sales price.

2.  You can’t low-ball today’s foreclosures – In today’s market, most foreclosures are priced aggressively and with less wiggle room than a few years ago. Years ago, a bank would price a home near its real fair market value and wait until a buyer came along. Now with foreclosure inventory at an all time high, banks price them to move and move quickly. For example, the bank may have a home that could sell for $350,000, but it may take some time for the right buyer to come along. Several years ago, a buyer may have found the house and offered $300,000 and the bank would accept this aggressive offer. In today’s market the bank will list the house at $300,000 in hopes of getting an offer within 30 days. It seems that buyers still want to make a low ball offer and get confused when the bank won’t accept.

3. Buyers have 10 days to inspect – It is standard for any purchase to include a 10-day due diligence period. This 10 days starts the day both parties have signed the offer. It does not matter if it is a traditional sale or a foreclosure. This 10-day due diligence period gives the buyer a chance to inspect the property in order to make a decision about moving forward. In a traditional sale, the buyer may ask the seller to fix a few items. With a foreclosure the house is more than likely 'as is” but the inspection will give you assurance that there are no major problems with a home. If a buyer backs out of a deal during the 10-day due diligence period, they would be able get their earnest money refunded.

4.  Buyers can include repairs into their loan – Since many homes sold today are foreclosures and short sales, the condition of the homes are often not “move in ready.”  Most buyers will not have an additional $10,000 - $15,000 that may be needed for new paint, new carpet some other repairs. Lenders have come out with loans that allow these and other repairs to be worked into the loan. For example, if you buy a home for $180,000 and it needs $20,000 in repairs. You buy the house for $180,000, but your loan amount is $200,000 and the $20,000 goes into an escrow account. After the house is painted, the painter gets paid out of the escrow, then the same for the flooring company. This gives buyers an opportunity to find a deal without needing $20,000 in cash after closing to make the house livable. Keep in mind, in our example the house must appraise for the $200,000 amount.

5. Buyers can get notified of deals immediately – A good realtor should be able to set any buyer up on a “Client Gateway.” This gateway can be set up with all of your search criteria such as price, number of bedrooms, basement and school district, etc.  The Client Gateway will send the buyer a list in the beginning, but then send out a notice when a new listing or a price reduction takes place on a home that fit the search criteria. Using the Gateway allows the buyer to see great deals on the first day on the market and give them a better chance to make a successful offer

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

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