Showing posts with label buying a house. Show all posts
Showing posts with label buying a house. Show all posts

Thursday, July 11, 2013

Tips on How to Get Your Offer Accepted in a Bidding War


Tips on How to Get Your Offer Accepted in a Bidding War

As the property market picks up, the chances of buyers finding themselves in a bidding war is also increasing. All you need for a bidding war to start, is one other bid on the house that you want to buy. And the more offers – or potential offers – there are, the more intense the bidding war will become. 
Where is a Bidding War Most Likely to Happen?
According to research released by a major online real estate brokerage mid-June 2013, the most competitive US markets in May 2013 were:
  1. San Francisco, with 87.9% of offers made on homes facing competition from multiple buyers
  2. Los Angeles: 86.1%
  3. Orange County: 83.9%
  4. San Diego: 72.6%
  5. Boston: 68.1%
  6. Seattle: 67.4%
  7. Washington DC: 66.8%
Interestingly, it was also in San Francisco that the highest percentage (96.8%) of offers were over the asking price; while those over the asking price in LA were only 25% - and the rest varied from 36.1% in Washington DC to 60.9% in San Diego.
So how do you get your offer accepted if you do encounter a bidding war?
Ten Tips to Get Your Offer Accepted in a Bidding War
  1. Offer your top offer up front. Remember this is a bidding war. All you need to do to lose your bid on the house is to offer less than the next person. Find out what similar properties in the neighborhood have sold for recently and base your offer on this. 
  2. Add an escalator clause. This is essentially a clause that asks for the right of first refusal to beat a higher bid. You can put in a figure that you will increase a higher bid by; just be sure to specify a cap.  
  3. Offer cash. If you can make a cash offer when you are buying a house, do so. As the old saying goes, “cash is king”. If you don’t have sufficient cash, go to the bargaining table with as big a down payment (or deposit) you can rustle together.
  4. Have at least 20% for a deposit. If you hope to get your offer accepted, you’re should have at least 20% of the offer in hand. Apart from anything else, banks generally won’t lend more than 80% of the purchase price. 
  5. Check your credit record. Four to six months before you plan to buy, check your credit record and pay off as many debts as possible. If there are any “errors” on record, dispute them. It stands to reason that someone with a squeaky-clean credit record will win the bid on a house over someone who has one or more bad debts. 
  6. Get a preapproved home loan. Truth is there are not that many people who are able to bid on a home with cash only. The next best way to get your offer accepted is to have a guaranteed mortgage. 
  7. Have your paperwork ready and available. In a bidding war sellers will tend to accept an offer from a buyer who is able to prove he or she has cash, a holding deposit and/or a preapproved mortgage. So have this proof with you when you put in your bid on the house. 
  8. Minimize contingencies. There’s no point on taking unnecessary risks, but keep contingency clauses short and sweet. For instance, there’s no reason for you not to include a home-inspection contingency, but guarantee it will be done within a limited time period (a week to ten days). If you lose out on buying a house because the seller doesn’t accept your contingency clause, so be it. Chances are there is a problem. 
  9. Meet the seller’s timelines needs. Sellers sometimes need time to find another property, or to relocate. In this instance, consider offering a rent back or lease back option for a specified period of time. 
  10. Introduce yourself to the seller. Real estate agents sometimes advise their clients to connect with the sellers, especially when they are relocating from another state, and haven’t met fact-to-face. You might be surprised how many people actually care who buys the house that has been their family home for many years. 

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Monday, June 17, 2013

Six Tips to Help Clueless Buyers


Top Tips for Clueless Buyers

If you are buying a property, but feel that you are clueless, don’t despair. We have compiled a list of six top tips for clueless buyers. 
Buying a home can be a daunting task, particularly for first time home buyers; but rest assured you are not alone. You are also not one of the first people looking to buy a home that starts out feeling totally clueless. 
Six Tips to Help Clueless Buyers Buy a Home
  1. Clueless buyers don’t understand the basics about mortgages. When buying a house that needs to be financed, it is essential to understand the way it works. For instance, lenders are not obliged to charge the same fees to all their clients. Fees may be negotiated. You also don’t have to close with the lender who originally pre-approved your mortgage bond. 
  2. While on the subject of mortgages, getting pre-approved for a loan is another really good tip for clueless buyers. It shows sellers you are committed to buying and indicates that you can afford their price. 
  3. Down payments are another factor that many people buying a house can’t fathom. For instance, a large percentage believes they must have 5% of the purchase price to buy a property. In fact, if the loan is insured by the Federal Housing Administration, even clueless buyers can get away with as little as a 3.5% down payment. 
  4. This may be a no-brainer to most, but a large number of people buying a home don’t even know – realistically – how much they can afford. So before you start looking to buy a home, do the math. List all those things you have to pay for, excluding rent and service bills – factor those in at the end. Often whatever first time home buyers are paying on rent equates with what they can afford to pay on a mortgage – but not always. 
  5. Prioritize what you need and what you want. Your needs are essentials – like the number of bedrooms you need to accommodate your family. Your wants will include things a swimming pool or games room. Neighborhood, schools and social services might fall in needs or wants. 
  6. Here’s another no-brainer: find the right real estate agent to help you buy a home. Once you know what you can afford and where you want to buy, a good agent you can trust will help you go all the way! This person will help you to understand the offer purchase and do whatever he or she can to make she you clinch the deal and buy the home of your dreams.
Let me assist you to help you with your real estate decisions.

visit my website www.jimclevelandhomes.com

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