March 2008
|
In this Issue:
Taking Advantage of a Buyer's Market
(Please leave us a comment at the bottom of the newsletter.)
|
|
Taking Advantage of a Buyer's Market
As a potential buyer in a buyer's market, you have a number of advantages over the seller that usually are not available. A buyer's market does not mean you will receive a bunch of concessions from a seller, or even at all, regarding price, and you may still end up paying top retail price for your next home. Nice homes in great locations will always command top prices, and if you think otherwise, you may be easily outbid by another, more aggressive buyer.
In this buyer's market there are other significant ways in which you can save money and increase your purchasing power.
The seller's goal is to make the maximum amount of money in the shortest time with the least investment into the property they intend to sell. To make any sort of investment in the property, the seller will need access to capital resources to fund the updates or repairs. A seller can avoid spending the cash or tapping a credit line for this venture and offer you, the buyer, a credit on price or in the form of a decorating allowance if they choose.
What typically happens, though, is the seller will not make the repairs or updates and leave it up to the buyer to either accept the home as-is, or to ask for some concessions in the purchase contract. You might try asking the seller to give you a credit for a decorating allowance, or to make the necessary repairs before closing. You would be amazed how many buyers are too timid or afraid to be aggressive with these types of concessions. If you don't ask, you'll never receive. The worst that can happen is the sellers will say no.
Another way to save money in a buyer's market is to include a provision in the purchase contract that requires the seller to pay all or part of the buyer's closing costs and/or pre-paids. This can have a tremendous impact on your buying power because these costs associated with buying a home are what makes the first few years of homeownership unprofitable. If you save this money, you will more quickly realize the benefits of appreciation and the reduction in your debt obligation to the lender. It is very important to coordinate with your lender, your real estate agent, and your financial adviser to determine exactly what to ask for so you receive maximum benefit. It is also critical that the contract be written very precisely to ensure the seller cannot avoid paying certain costs on a technicality.
Most sellers who have elected to list their home with an agent will have access to very detailed market data. It will be obvious to even the most novice seller what the market indicates their home is worth. If the sellers take the time and make the effort to prep their home to sell properly, and they heed the market data, they will most likely settle in on a price that a competent buyer will fairly pay. This means you will probably not be receiving any break in pricing from this type of seller.
But as a savvy buyer who is fully informed on market conditions and fearless in negotiations, you will
Never forget that quality and location bring a certain value to a seller, so don't make the mistake of low-balling your dream home and then losing it because you offended the seller. Be fair with the price, but get your concessions and savings in other, more creative ways.
Who Does Your Agent Represent?
The basic responsibilities and fiduciary obligations a Realtor® has toward you are the principal in a transaction are as follows:
Loyalty: At all times, the Realtor® must act in the best interest of you (the principal), and place your best interests above everyone else's, including his own.
Obedience: Realtors® are obligated to promptly obey all lawful instructions of the principal, lawful being the operative word there. (You can't tell an agent to break into a home for you and expect that they will.)
Disclosure: Realtors® must inform you of all known, relevant facts. Conversely, the principal has this same obligation to the Realtor and the other parties involved in the transaction.
Confidentiality: As with many professional occupations, Realtors® are required to protect the principal's secrets, unless keeping this confidence violates the property condition's disclosure requirements. So, the agent can withhold your reason for moving, but must disclose that your home was once used as a nuclear test site.
Reasonable care & Diligence: A Realtor® must diligently use their knowledge and skills regarding real estate to pursue the principal's interests.
Accounting: Finally, Realtors® are required to account for all funds and property entrusted to them by the principal.
Hopefully this gives you a better understanding of what agency actually is now. The better you understand the agency relationship, the better you are able to determine the kind of agency relationship you choose to participate in. The most important thing to remember, though, is that agents are there to work for you, and ensure that your life is much easier throughout your real estate transaction.
Home Maintenance for March
March
Winter's ending. It's time to…
Search for peeling exterior paint. Harsh winter weather can cause paint to chip, peel or flake, exposing wood to the elements. Touch up bare spots now to prevent moisture problems later. First, scrape and sand any loose paint, then prime and add at least one top coat.
Prep your lawn. Apply a pre-emergent fertilizer to your grass in March (or as soon as the snow melts), and you'll have fewer weeds and healthier grass come April. A local nursery can recommend a fertilizer appropriate for your yard.
Examine the foundation. Take a walk around the exterior and interior of your foundation (if accessible) in search of cracks. Small cracks should be filled with caulk and monitored to make sure they aren't widening. If you see large cracks, call a building contractor or structural engineer to inspect. Check cement walkways and driveways. If you find a crack, use a leaf blower to clear out debris, then seal with caulk made for your type of surface (asphalt, concrete, etc.). Use mortar only if the crack is more than a half-inch wide.
Replace the batteries in your smoke and carbon monoxide detectors when you change the clocks for daylight saving time.
Check back next month for your Maintenance Tip for April.
|
As most everyone knows, we are experiencing what many in both the media and industry circles term a buyer's market. This is not the case in EVERY market, but in many, it is. The challenge we face today revolves around the high number of people forced to sell for various reasons, and the perceived fall-out from loose lending practices.
realize the asking price is fair for the market and attempt to save money in the other ways mentioned above. Sellers are funny… They will settle in on a price, but will turn right around and give in to concessions worth thousands of dollars when confronted with a strong, motivated buyer and a signed purchase contract.
When it comes to agency, the most difficult thing for most people to understand is, the agent is working for you as your spokesperson or middle man. Only after signing an agency agreement is your Realtor® legally obligated to keep your best interests in mind, protecting and promoting what is best for you, whether you are a buyer or a seller. Not only are Realtors® in charge of the paperwork for a transaction, but they have specific responsibilities as well. There is a great deal at stake when you are dealing with such extensive assets, so agents are liable for a number of categories. This liability is why contracts are so extensive and involved, with a number of disclosures and agreements to sign.
In January we gave you an entire year's worth of tips from The Weather Channel's home improvement expert Danny Lipford, that not only reminds you of what needs to be done and when, but also shows you ways to save money. We'll bring you each individual month's tip again here as a reminder.
