This post is a continuation of Buying A Home In Rancho Santa Margarita The Easy Way – 14 Step Guide (Part 1). If you missed Part 1… Click Here
Step 6: Find a Quality Lender & Obtain a Pre-Approval Letter – This is probably one of the biggest potential sticking points in a real estate transaction. References! References! References! DO NOT let your neighbor, your 2nd cousin once removed, your buddy in the church choir or an Internet lender handle your mortgage loan! Ask your agent for several references for reputable local Lenders. Lending guidelines have changed drastically in the past couple of years and it is essential that your Lender is knowledgeable and highly experienced in purchase transactions. Don’t walk into the nearest bank and ask for the Home Loan Expert either. Not all Lenders are created equally.
Step 7: Communicate Honestly With Your Real Estate Agent – Good, honest communication between a buyer and a buyers agent is essential. Your agent is there to help you, but it is up to you to make your agent aware of any concerns. Unfortunately agents are not psychics. Until you’ve communicated a question or an issue, your agent won’t know to address it. If you are in any way dissatisfied with your agent’s service, be sure to let them know immediately. Quality real estate agents pride themselves on being service oriented. If an agent knows a client is not happy, he or she will want to correct the problem.
Step 8: Be Prepared to Move Quickly Once A Potential Property is Identified – Don’t be fooled into thinking that because the market is down there is no competition. It is quite the contrary for homes that are priced correctly. I have several first time buyers who are looking to buy a Rancho Santa Margarita home in the $425,000 – $450,000 range. The competition in this price range is extremely tough. These first time buyers with high loan to value FHA loans are finding stiff competition with seasoned investors, with larger down payments, scooping up well-priced short sales and REOs. Also, there are usually one or two homes that are a little more aesthetically pleasing, or have a few more upgrades, and those homes frequently generate multiple offers. Don’t assume you can take a couple of days to mull it around in your head. If the house is that amazing, you’re not the only one who will be putting in an offer.
Step 9: Make Your Offer Count – Don’t bother with a low-ball offer if you are aware that there is competition and the home is priced significantly under market value. A lot of Rancho Santa Margarita short sales & REO homes are listed significantly under market value to draw a huge crowd of potential buyers. Unless the house is a complete dump it will sell at or close to market value…not at the ridiculously low teaser listing price. Look at closed comps and make a reasonable offer. Discuss offer strategies with your agent. Each offer is unique and the strategy may change from one offer to another. Strategy is especially important when working with short sales and REOs.
Step 10: Read the Home Inspection Report / Know What Needs To Be Fixed…And When -Your home inspector will provide you with a comprehensive physical inspection of your home. Room by room and system by system he will work his way through the home, noting conditions and classifying them into major problems, health or safety concerns, maintenance issues and recommended maintenance items. This information is vital from a planning standpoint and from a negotiating standpoint. If a home is in need of $20,000 to cure immediate problems, you need to need to negotiate with the seller to either repair the noted items or reduce the sales price. The report may be so ugly it prompts you to cancel the escrow. The point is that every buyer should retain the service of a licensed professional home inspector. It is well worth the cost.
Step 11: Don’t Be Afraid to Request Repairs, But Don’t Lose The House Over It Either - Negotiating for repairs is part of most transactions. Sometimes buyers feel hesitant to ask for repairs if they know they got a bargain on the sales price. My recommendation in most instances is to go big, and ask for the moon. Requesting repairs will never put a transaction at risk if the negotiation is handled professionally and the seller isn’t made to feel insulted. On the flip side, there are instances where a seller won’t have the means to make a repair, or in the case of a bank owned property, may simply veto any request for repairs. Speak with your agent and weigh your options. Perhaps the seller or bank will shave a little more off the price. If repairs or a price reduction are out of the question, but you got it at a steal, you might conclude that it’s worth buying the home and handling the repairs after closing. This is where having completed Steps 3, 4 & 5 will come in handy.
Click here to read Buying A Home In Rancho Santa Margarita The Easy Way – 14 Step Guide (Part 3)
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