When it comes to buying a property, one of the most important things you can do is be sure that you aren’t overpaying for it. Whether its a condo, a townhouse, a single-family house, it doesn’t matter. You never want to be the fool that overpays, and lose money when it comes time to sell it yourself. here are some tips that you should consider so that you don’t pay more for a home than it’s even worth.
Be realistic about how much you can actually pay
Unless you are in the 1% of the world, you probably don’t have the ability to pay for a house outright with cash, and will therefore be getting a loan for a mortgage. Whether you’re going through a traditional or government lender, doesn’t matter. You need to get an approval in writing either way, with contingencies stated very, very clearly. These contingencies are going to include a home appraisal. An appraisal is a document that is going to show how much a house is actually worth based on a multitude of data. It compiles “comps” along with the condition of the house, to come up with an actual number of what it is worth. Know that the bank is going to look into your credit score and want to verify your job when you go to apply for the loan. This is standard practice, and there’s no way around it.
Not so fast
Agents are notorious to trying to make a buyer hurry up and buy. This leads to over-paying. Some agents will actually flat-out lie to you and tell you that many buyers have been coming to see the house, and that it is certain to move quick, and that you should put in an offer right away. This is how impulse buys happen; don’t let it happen to you. Tell your realtor that if the home gets sold before you put in your offer, then you’ll find something else. This should show them that you aren’t going to be able to be swayed to impulse buy.
Find out why the seller is selling
Never make an offer on real estate without doing some homework to find out why the seller is selling the house. Sometimes, you can just ask and get an honest answer, but most of the time you’ll have to find out on your own. The reason they usually won’t be honest with you, is that they know you’ll use it as a negotiation chip. For example, if they’ve just filed for bankruptcy, you’ll know that they’ll probably sell the house at whatever amount because they need to get rid of it. Knowing the sellers reason for selling is going to give you a huge advantage when it comes to negotiating. It will also let you know if there is not room for negotiation. For example, if the home has been on the market for months and hasn’t sold, but the seller is fine financially, and fine with staying where they are until it does sell, you probably won’t be able to get them to budge on their price.