Moreover, your lender has something to say about this — he may find that the home is overpriced and will nix the deal. This means that there are several steps you should consider when you make an offer to buy a home.
Know the local market
— It isn’t enough to know what comparable homes have sold for in the town where the home is located. You need to know what homes sold for in its neighborhood, including on that street. Home comparables are available through your real estate agent and should be recent and reflect pricing trends. This means that if home prices have fallen by 5 percent since the beginning of the year, then the home you want should be priced accordingly.
Get a thorough home inspection
— The home inspection industry is largely unregulated in most states which means that the person you hire to inspect your home may not be qualified. Find someone who comes recommended and who can provide a detailed report on your home’s condition from the roof down to the foundation. This person needs to be familiar with electrical, plumbing, millwork and structural issues. You can farm out the termite inspection and the radon check to a third party.
Insist on a contingency clause
— The seller may be eager to unload her home, but don’t sign a contract to buy unless it includes a detailed contingency clause. You don’t want to be locked into a deal without having performed an inspection first, compared prices of recently sold homes or are qualified for a mortgage. You may also need to sell your current home first, yet another contingency that should be stipulated in your contract.
Make an informed offer
— Once you have the details of local comps and a home inspection in hand, you can decide whether you want your current offer to stand or ask for an adjustment from the home seller. Remember, though, that when the seller agreed to contingencies, she also gave herself room to walk from the deal. Be prepared to have your request for an adjustment denied or be ready to negotiate a price that is acceptable to both parties.
You may be able to save thousands of dollars by carefully researching market conditions and knowing what repairs must be made before agreeing to a final selling price. Work with an attorney to ensure that your interests are advanced, giving you a home that is worth the price you’ll be paying for it.
See Also — SayLending: Qualify for a Mortgage
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