15 No Nonsense Real Estate Facts for Buying a Home
Buying a home is an emotional and sometimes scary process especially for first time home buyers. I have put together 15 no nonsense FishHawk Ranch real estate facts about home buying. Understanding the facts prior to starting the home buying process will help make your home buying experience as fun and as stress free as possible.
- Get Pre-Approved – This is the absolute must first step in the home buying process! As a Buyer, you need to know how exactly much home you can afford. This requires a lender, mortgage broker or credit union to do a full review of your credit, assets and income. This is an in-depth review of your borrowing situation. Once you know how much you can afford, you can then decide how much you want to afford. Keep in mind what you can afford and what you want to afford are two completely things!
- REALTORS® Won’t Show You Homes Until You Are Pre-Approved – In general a good, experienced REALTOR® won’t show Buyers any homes until they are pre-approved by a lender. There are mainly three reasons for this. First, a pre-approval lets you and your REALTOR® know how much home you are qualified for and really can afford. It eliminates you from looking at homes out of your price range. Second, in today’s seller’s market most Sellers will require a pre-approval to be submitted with the purchase offer. If the Seller does not require a pre-approval submitting one with your offer makes your offer stronger. Third, a Buyer that is that is pre-approved by a reputable lender has a track record and is less of a safety threat for the REALTOR® than a buyer that has not been pre-approved. Unfortunately REALTOR® safety has become a hot topic lately.
- Prepare to Buy – Buying a home is usually the single largest purchase you will make in your lifetime. It is a major life event that requires planning. Have you checked your credit score lately? Is it a mid-score of 620 (preferably 640) or better? Do you have enough money saved for a down payment, closing costs and home maintenance after you own the home? Do you have an area in mind that you are looking to buy in? Do you need to sell your current home? To buy a home you need to be prepared. Inventory is low and good priced homes are selling very fast. If you are prepared to make an offer and buy you have a better chance of getting a good deal on a home!
- Stay Within Your Budget – Look at homes in your price range. Currently the homes in the FishHawk Ranch real estate area are mostly selling within 5% of their asking price. If you think that by submitting a low-ball offer you have a good chance of getting the property, think again. In my experience the Seller just gets insulted and they flat out reject or do not even respond to your offer. They feel you are not a serious Buyer. If you are a serious Buyer it is best to keep the homes you look at and the offers you make realistic. Using the current market stats, days on market etc., I like to try and figure out what the Seller may accept and make an offer just tempting enough for them to accept it without insulting them. Bottom line, know your budget, know the current real estate market and only look at properties that fit those guidelines.
- Do I Pay The REALTOR®? – Typically hiring a REALTOR® to assist you buy a home is FREE. That’s right, it costs the Buyer nothing! If a REALTOR® wants to charge you to look at FishHawk Ranch homes for sale or any other homes for sale you may want to look elsewhere. There may be circumstances where this does not apply (like buying a property that does not offer a co-broker commission) but for the most part the Buyer does not pay for the REALTOR®. If you are looking at new construction or a resale it is always best to hire a REALTOR® to represent them. Some Buyers think that if they going to a builder without a REALTOR® they can get the REALTORS® commission as a reduction in the sales price. This cannot be any further from the reality. New construction builders have the REALTOR® commission built into their marketing budget not into price of the home. Remember once a builder sells a home that sales price now become a comparable for the rest of the homes the builder will be selling there. If they sell you a home with the reduced price any new Buyers will push for the lower price as well. Builders are smart, they don’t want to see that scenario. If a Buyer comes in without an agent the builder will pocket that money or the builder’s onsite agent will get the commission. Keep in mind that most transactions will have unexpected hurdles, a good REALTOR® will have the expertise to overcome these hurdles. They also know the current market value of homes sold, current inventory levels, how fast homes are selling, the neighborhoods, schools and where the market is heading. Do yourself a favor and hire a local real estate expert and in my case a local FishHawk Ranch real estate expert!
- DO NOT Make Any Large Purchases or Quit Your Job – I cannot stress this enough! You just signed and received and executed contract for the home of your dreams and your first instinct is to go out and do some shopping for the home. DO NOT! Doing so could affect your credit score and hamper your chances to get a loan and ultimately the home. DO NOT make any large out of the ordinary purchases, apply for any new credit cards or any new credit in general. And lastly DO NOT quit your job. Oh yes, I’ve had that happen! You can do all those things after you close on your new home!
- Be Flexible – The process of buying and selling a home is and should be a win-win transaction. The Buyer of a home gets the home of their dreams for a good market price while the Seller of the home gets monetary value in return. Remember, both parties need to come to a mutual agreement so there is probably going to be a little give and take involved. As the home Buyer you may need to be a little flexible. The home probably won’t be perfect and the price may not be the lowest ever on the market. Keep the big picture in mind and don’t risk losing a home you love over little things!
- Low-Ball Offers – I know we covered this a little bit already but it is worth going into in more detail. Find a local real estate expert and know your local market. Low-ball offers sometimes make sense in an extreme Buyer’s market. We are now in a strong Seller’s market. In my FishHawk Ranch real estate market there is less than a 3 month supply of homes on the market. In a balanced market there is typically between a 5 to 7 month supply of homes for sale. Sellers are not hurting for offers in this market unless the property is distressed or simply overpriced. In general even in a Buyer’s market most Sellers are insulted by low-ball offers. Once a Seller is insulted it is difficult for them to want to sell the home to that offer maker. Remember that they may have raised a family in this home and it was probably their dream home at one point! Find a local real estate expert that knows the market, for FishHawk Ranch real estate and homes in the Tampa Bay area that would be me! They will pull recent comps of similar sold homes in area and guide you on a fair low-side offer that the Seller may accept and if not won’t get insulted by. Again, if you are a serious Buyer and really want a home make Low-Side not Low-Ball offer!
- Penny Wise Dollar Foolish – Negotiations are a large part of every home sale. This is one of my favorite parts of the transaction. Everyone has tells and most agents do not know how much information they are giving away on any transaction. If I am the listing agent or the buying agent on a property it is my goal to get the best possible deal for my client. However, as a Buyer (or even a Seller) don’t be penny wise and dollar foolish! Currently mortgage interest rates sit around 4%? That means borrowing and extra $10,000 on a 30 year loan increases your monthly payment by around $47.75. That’s right, $47.75! Do you really want to lose the home of your dreams over the price of a cup of coffee a day? I’ve seen a Buyer walk away from a home they loved for less than $1000. Not because they could not afford the extra money or because the home was overpriced, they simply walked away over a matter of principle. Seriously? Now my informed clients would not do that would they? No, I hope I would have educated them enough about the current market and I hope they would be realistic and understand the market value of the property. Serious Buyers need to set aside emotions and look at the larger picture. Hire and listen to the expert local REALTOR® you hired to advise you. They should have valuable insight to guide you to make the best possible decision.
- The Home Will Need Repairs – Unless you are buying a brand new home it will need some sort of repairs. Even new homes are not perfect and need some items fixed. I’ve yet to see a home that does not have items that need addressing. Here is my advice to you, don’t sweat the small stuff! Be more concerned about any major items needing repair and how they can be resolved. The Seller is not going to repair or issue you a credit for all of the items found in the home inspection. Sit down with your expert REALTOR® and decide what is really important to you. Does the cracked outlet plate really need to be replaced by the Seller? No, probably not. However, if the inspection found a roof leak and neither party knew about it, either a licensed roofing contractor should repair it before closing or a credit or price reduction should occur. Also remember that the home inspector’s job is to find as many problems with the house as possible. It is up to you and your REALTOR® to determine what is important to you. Don’t let the small stuff stop you from purchasing the home of your dreams.
- Sellers Are People Too! – If you find the home of your dreams let the Seller know. Sellers in general loved and cared for that home. They may have raised their family there are and will be emotionally attached to it. They want to sell it to someone that will love and care for the home just the same. If I have a young couple just starting a family buying a home I let the Seller know when I make an offer. Sometimes it helps get my offer accepted over a similar offer and occasionally we can even get a better price. Just remember that even though this is a real estate transaction people and real emotions are involved in the decision making process.
- Spotless – So you’ve just fallen in love with a home being sold by Mr. and Mrs. Clean. It is obvious how well cared for the home is. The home is spic and span, no magic eraser needed (okay I will stop with the puns!) and is just spotless. Trust me, this will not be the home you’ll get below market value. Homes like this typically sell for the high end of the market value range. They draw meticulous, savvy Buyers and generally sell very quickly. Be prepared to act fast and make an attractive offer. In some cases this offer may have to be over the list price. If you don’t act fast and put your best foot forward there will be another Buyer ready to jump on this prize home.
- 20/20 Vision – One of the most difficult things for a Buyer to do it see beyond the clutter, bright pink walls, 1980’s wallpaper and wood paneling. Buyers need to try and envision the home as it would be when they own it. A little paint here and cleanup there go a long way and for the most part are fairly easy to do. In general most home Buyers can do a little painting and cleanup. If you cannot these are not the most expensive changes made to homes. If you are in the FishHawk Ranch or surrounding area I’m sure I know some good handymen that can help you out. Just keep an open mind and try to picture the home cleaned and painted when viewing a home and try to see the home’s potential.
- A Leveraged Investment – Real Estate is considered a great investment. Historically real estate has appreciated 5% – 7% a year. I know occasionally the market declines but if you have a long term outlook the market will come back and appreciate at that historically pace. Real estate does not have to be purchased at 20% below market value to be a good long term investment. Real estate is unlike most other investments because it uses leverage. With leverage you can put 3% down on a home and earn the appreciation on the entire value of the home. So for ease of explanation if you are purchasing a house for $300,000 you need to put 3% or $9000 down payment with a new Fannie Mae or Freddie Mac mortgage. After the first year your appreciation at 5% would be $15,000, and $15,750 the second year etc. So after one year you would have gained back your down payment plus an additional $6000. This does not even take into account the tax advantages of owning a home, where else can you get that kind of return? I know, you are saying yes Jeff but we still have to pay the mortgage. That is true but you are going to need to pay for someplace to live. So if it is not a home and mortgage for yourself it would in rent to pay the mortgage of a real estate investor. Now, you still want to get the best possible purchase price on the home you are buying but ultimately remember that over time this will be a great investment for you.
- Choose Your REALTOR® Wisely – Not all REALTORS® are created equal. I’m sorry but your cousin from out of town may not be the best choice for you. Find a local REALTOR® that is an expert in the area you are looking to buy (or sell) in. They will know the current market trends, price ranges, neighborhoods, schools etc. That knowledge is priceless. Find an agent that has closed some transactions. There is no substitute for experience. There are going to be hurdles that come up and that experience will come in handy. Find a REALTOR® you are comfortable with. You will be spending time with them, sharing your personal information with them and relying on them to be honest with you and steer you in the right direction. Do yourself a favor, take your time, ask questions and find a great agent. For FishHawk Ranch real estate and for real estate in the Tampa Bay area please interview me. If you are moving outside of your local area ask me to see if I can refer someone to you. I am globally connected to great real estate agents all over the world. I am sure I can refer a great one to you.
I hope these 15 no nonsense facts are helpful. Best of luck in your home search!
Other Useful Real Estate Buyer Articles:
- Find the Home Loan that Fits Your Needs
- FishHawk Real Estate Buyers Guide
- FishHawk Ranch Property Taxes
If you found this Real Estate article beneficial, please share with others who could benefit from it. And thank you for sharing!
About the author: The above Real Estate article “15 No Nonsense Real Estate Facts for Buying a Home” was written by Jeff Gould, a nationally recognized Tampa Bay, Florida REALTOR. Jeff can be reached via email at Jeff@FishHawkRanchRealEstate.net or by phone/text at (813) 421-3007. If you are looking to sell or buy a Central Florida home, Jeff is your local and trusted professional.
Jeff is a local FishHawk Ranch real estate expert. You will find him selling homes in the Tampa Bay, Florida and surrounding areas. Including Lithia, FishHawk, Riverview, Valrico, Brandon and Tampa.
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