Steps to the Lowest Possible Price for Your Dream Home
If you follow these 10 steps, you are guaranteed to own your dream home at a reasonable price!
1. What type of house do you want? Determine the neighborhood and amenities that you want when purchasing a home. What can you afford? What neighborhood do you like best? Make up your mind whether you want to line in a vintage home or newer construction. Is it important that you purchase an energy efficient home? Ask yourself these independent questions in order to flesh out what is best for you!
2.Line up an independent real estate agent, attorney, and independent home inspector once you have decided what you want
3. Choose a real estate agent that is a buyer’s broker and more importantly, one who will work with you. Get a family friend that won’t be able to stand the shame if they represent you poorly. Never ask your agent to give you the names of attorneys, home inspectors, or mortgage lenders. Seek these on your own through referrals.
4. Choose an attorney willing to help you negotiate the purchase based on the deficiencies discovered during the home inspection You could spend $800-$1500 or more on legal fees, but these fees will seem small compared to the $10,000 to $20,000 savings from the inspection report.
5. Choose a Home Inspector that is willing to be tough and quote budgets for repairs. Your inspector should also tell you in writing if the problem needs immediate attention or can be scheduled as a long-term project. These dollar figures will help you make your decision about buying/not buying or negotiating cost.
6. Find the house of your dreams and make an offer within 10% of the seller’s price. (If you think it’s worth it based on your assessment of what comparable homes have sold for in the area). When negotiating the contract to purchase make sure you insist on a 7-10 day “contingency period” to have a home inspection. (You are entitled by federal law to 10 days to get a lead inspection, if you don’t waive your rights.) Also, insist on an attorney-approval period of at least 15 days.
7.Once the house is under contract, call your attorney to review it. Your attorney will order a title search to make sure the title to the property is clear. A good attorney will also check the plat of survey to make sure there are no easements that you don’t know about and that all of the property lines are proper.
8. Don’t let yourself be pushed around in the process. Walk through the inspection along with the inspector, and be an ACTIVE participant! Insist that all budgets for repairs are included in the report. Have the inspector state which problems are urgent and which ones can wait. Other suggestions about the inspection are:
-Budget 4 hours or more for a thorough inspection
-Make sure to have booked extra time to discuss your report with the inspector away from the agents and the premises.
-Be ready to call contractor for bid prices on repairs that need to be done (this is the reason you insisted in a 10 day period in which to complete your inspection.) When your inspector is finished you should have a few more days to bring in a plumber, electrician, or asbestos abatement contractor for estimates.
- Use the inspector’s budget figures during negotiations.
9. Begin drafting your summary of deficiencies letter for the seller the day after your inspection. try to answer the question, “how much do I like this house anyway?” If you are in love with it , forget any negotiation and tell your attorney you accept the house “as is”. If you like the house, the seller, and the price,. you aren’t out of anything if you don’t negotiate the deficiencies. You’ve gained the peace of mind concerning the home’s quality by having a tough home inspection. However, our clients who have negotiated a lower price after the inspection say you must ALWAYS be willing to walk
away.
10. If you decide to negotiate, get your lawyer’s advice and throw in all your “wants”. Use your attorney to finalize your letter to the seller. This deficiency letter will require a certain amount of tine and language that only an attorney can get away with. If the seller was a tough negotiator for the contract, you may have to threaten to walk away from the deal (and mean it) to get them to negotiate. You have every right to expect every system and component to be in “good working order.”
11. Wait for the seller’s response. If they are willing to deal, you can expect to have problems remedied or dollars taken off the purchase price. You and your attorney will have to decide beforehand how much time, energy, and money you will put into the negotiations.
12. Remember that sellers under contract are never good repair contractors. They see a buyer, and they just aren’t motivated to hire “licensed” electrical or mechanical contractors, carpenters etc. Consider asking for cash at closing rather than asking the seller to fix anything.
13. Don’t forget to pass on names to others in the home purchase market We also inspect leaseholds and are state approved as an education provider for those that want to enter the home inspection business. Send those “wanna be’s” our way! We speak their language!