* Don't Get "Pre-Qualified!

Do you want to get the best house you can for the least amount of money?
Then make sure you are in the strongest negotiating position possible. Price
is only one bargaining chip in the negotiations, and not necessarily the
most important one. Often other terms, such as the strength of the buyer or
the length of escrow, are critical to a seller. In years past, I always
recommended that buyers get "pre-qualified" by a lender. This means that
you spend a few minutes on the phone with a lender who asks you a few
questions. Based on the answers, the lender pronounces you "pre-qualified"
and issues a certificate that you can show to a seller. Sellers are aware
that such certificates are WORTHLESS, and here's why! None of the
information has been verified! Oftentimes-unknown problems surface! Some of
the problems I've seen include recorded judgments, child support payments
due, glitches on the credit report due to any number of reasons both
accurately and inaccurately, down payments that have not been in the
clients' bank account long enough, etc. So the way to make a strong offer
today is to get "pre-approved". This happens AFTER all information has been
checked and verified. You are actually APPROVED for the loan and the only
loose end is the appraisal on the property. This process takes anywhere from
a few days to a few weeks depending on your situation. It's VERY POWERFUL
and a weapon I recommend all my clients have in their negotiating arsenal.

* Sell First, Then Buy

If you have a house to sell, sell it before selecting a house to buy! I
haven't seen a contingent sale work in the last 3 years, unless it's with a
new home builder who has other houses to sell and can afford to put one on a
contingency. Let's pretend that we go out looking for the perfect house for
you. We find it and you love it! Now you have to go make an offer to the
seller. You want the seller to reduce the price and wait until you sell your
house. The seller figures that's a risky deal, since he might pass up a
buyer who DOESN'T have to sell a house while he's waiting for you. So he
says OK, he'll do the contingency but it has to be a full price offer! So
you see, you paid more for the house than you could have because of the
contingency. Now you have to sell your existing house, and in a hurry!
Otherwise you lose the dream house! So to sell quickly you might take an
offer that's lower than if you had more time. The bottom line is that buying
before selling might cost you TENS OF THOUSANDS of dollars. I always
recommend that you sell first, then buy. If you're concerned that there is
not a house on the market for you, then go on a window-shopping trip. You
can identify possible houses and locations without falling in love with a
specific house. If you feel confident after that then put your house on the
market. Another tactic is to make the sale "subject to seller finding
suitable housing". Adding this phrase to the listing means that WHEN YOU DO
FIND A BUYER, you will have some time to find the new place. If you don't
find anything to your liking, you don't have to sell your present home.

* Play the Game of Nines

Before house hunting, make a list of nine things you want in the new place.
Then make a list of the nine things you don't want. I call this "NINE OF
THIS AND NONE OF THAT". You can use this list as a scorecard to rate each
property that you see. The one with the biggest score wins! This helps avoid
confusion and keeps things in perspective when you're comparing dozens of
homes. When house hunting, keep in mind the difference between "SKIN AND
BONES". The BONES are things that cannot be changed such as the location,
view, size of lot, noise in the area, school district, and floor plan. The
SKIN represents easily changed surface finishes like carpet, wallpaper,
color, and window coverings. Buy the house with good BONES, because the SKIN
can always be changed to match your tastes. I always recommend that you
imagine each house as if it were vacant. Consider each house on its
underlying merits, not the seller's decorating skills.

* Don't Be Pushed Into Any House

Your agent should show you everything available that meets your
requirements. Don't make a decision on a house until you feel that you've
seen enough to pick the best one. Go to the Multiple Listing computer with
your agent to make sure that you are getting a COMPLETE list. In the late
1980's, homes were selling quickly, usually a few days after listing. In
that kind of market, agents advised their clients to make an offer ON THE
SPOT if they liked the house. That was good advice at the time. Today there
isn't always this urgency, unless a home is drastically under priced, and
you'll know if it is. Don't forget to check into the SCHOOL DISTRICTS of
the area you're considering. Information is available on every school; such
as class sizes, % of students that go on to college, SAT scores, etc. You
can get this information from your agent or directly from the school.

* Stop Calling Ads!

A word of caution - agents create ads solely to make the phone ring! Many of
the homes have some drawback that's not mentioned in the ad, such as traffic
noise, power lines, or litigation in the community. What's not mentioned in
the ad is usually more important than what is. For this reason, I want you
to be very careful when reading ads. Remember that the person writing the ad
is representing the seller and not you! The most important thing you can do
is have someone on your side looking out for your best interests. Your own
agent will critique the property with an eye towards how well it meets your
needs and will point out any drawbacks you should know about. So whether
you decide to work with me or not, pick an agent you feel comfortable with
and enlist the services of that agent as a buyer's broker. Then you become a
client with all the rights, benefits, and privileges created by this agency
relationship, and you're no longer just a shopper. Did you know that many
homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUT IN THE
PAPER? These "great deals" go to those people who are committed to working
with one agent. When an agent hears of a great buy, who do you think he's
going to call? His client, who he has a legal obligation to work hard for
you, or someone who just called on the phone and said "keep your eyes open"?
So to get the best buy on a property, I always recommend that you hire your
own agent and stick with him.