A Terrabella Realty Guide to Home Buying

Getting ready to buy a home is always an exciting time in your life as you sit down to imagine the possibilities and map out the future. On the flipside however, the home buying process can also be overwhelming- with emotions running high and too many options on the table.

On top of the most important decision of where you want to buy, there’s also a question of how much you’re willing to pay. As you move through the real estate buying process, you’re going to have certain frontrunner homes that fulfill your wants, but the question really becomes, “Will this property fit with my “cans” as well?”

With this helpful guide, the agents of Terrabella Realty impart all of the knowledge they’ve gained in helping buyers make their real estate decisions in South Florida, as well as in being buyers themselves. These tips are intended to serve as a guidebook home buyers can follow to avoid the typical pitfalls you find in buying real estate.

Step 1: Know your own needs, wants, and cans before you start shopping

When you start looking for a new home or condo, there are usually three inner voices fighting for attention: the one telling you what you need to buy; the one telling you what you want to buy; and the one saying what you can afford.

If you don’t do at least a little pre-planning before you start shopping around, these voices will start to drive you crazy as they compete for your interest. That’s why it’s important to make a list that categorizes these three buying motivations and prioritizes them in order of what’s most important. This will save you a vast amount of time and sanity as you start shopping on the market.

Step 2: Shop for a mortgage before you start shopping for real estate

Getting pre-approved on a home mortgage loan is the smart way to shop for real estate. Doing so lets sellers and their real estate agents know that you’re a serious and motivated buyer, instead of someone that’s just “window shopping”. This means they will be more attentive and flexible with you in the showing and negotiation stages of your buying process.

In addition, a loan pre-approval let’s you know the maximum home mortgage you can afford. A good lender will also be able to review the numbers with you and clue you in on the optimal home mortgage loan for your current standard of living. This will help narrow down your home shopping list. Just make sure to get the loan pre-approval in writing to ensure its credibility down the road.

Step 3: Find the right Realtor® to represent you

Working the right way in real estate is a full-time job. From sifting through all of the available properties, to inspections, to negotiations- it’s critical to have a qualified agent that you can trust on your side. A good agent has years of experience and knowledge that they can freely utilize on your behalf. In addition, a good Realtor® will have their own list of other recommended specialists that you’ll need down the road: lenders, lawyers, inspectors, and possibly even movers if they’re a true specialist in the local area.

Step 4: Make sure your Realtor® is in step with your wants, needs, and cans

If you followed Step 1, you already have prioritized list of your buying concerns and motivations. Share this list with your real estate agent, reviewing it carefully and making sure they understand what’s most important to you. Communication is critical! You want to make absolutely sure that your Realtor® is finding a place for you and not something that satisfies their ideas of what kind of home you need.

Step 5: The L-word is the most important of all

In real estate the L-word isn’t love- it’s location. You may love a property you see, but if the location isn’t right then it’s not the home for you. Depending on your personal circumstances, you may want to consider the local schools, airport access and thoroughfare infrastructure, local retail, and accessibility to recreation areas and marinas.

Not only will these considerations play a major role in how well your new home fits with your lifestyle, but it will also affect your home’s value when you’re ready to sell down the road. While an address may not mean that much to you personally, it will mean a lot when it comes to the bottom line and the return you’ll get on your real estate investment.

Step 6: Let your Realtor® narrow down the list for you

A good real estate agent brings an in-depth knowledge of the local real estate market to the table. They keep a constant eye on the market to explore any new properties that get listed. Depending on the real estate technology they use, they may also be able to automatically send you updates as soon as a new property that fits your criteria comes on the market. Use this to your advantage and let your Realtor® handle the legwork.

Step 7: Shop with your head and not your heart

As you begin shopping for your next home, your heart may have a lot to say about each property you see, but it’s vital to be practical and pay attention to what your head is telling you. With the help of your Realtor®, recognize the acceptable and unacceptable problems you’re seeing in each property you visit.

The most important point here is to not ignore red flags when you see them. Walls can be repainted and carpet can be replaced, but anything outside the “cosmetic” realm may not be so easily remedied. Major foundation cracks, worn out electrical and plumbing systems, and evidence of previous water damage or wood rot should set off warning lights- that this property is definitely not for you.

Step 8: Hire your own inspector

Your Realtor® should be able to provide you with a list of recommended real estate inspectors. Choose one, and go with them when they inspect any prospective property. Tagging along on the inspection will give you some very interesting insights into each property, and show you what to look for as you continue to explore the market.

A typical home inspection will investigate:

• Foundation
• Electrical, heating and plumbing systems
• Floors, walls, and ceilings
• Attics and roof
• Siding and trim
• Porches, patios, and decks
• Garages,
• Property drainage

Step 9: A fixer-upper isn’t necessarily the find of your life

Many real estate buyers like the idea of a fixer-upper. You buy at a below-market rate and then renovate to your heart’s content. It can be a lot of fun for people with a passion for design and decorating, and a phenomenal investment if you have the time and money.

But if a fixer-upper property isn’t priced low enough, you won’t recoup on your investment when you turn around to sell. Before you proceed in buying a fixer-upper, consult with your Realtor® and evaluate just how much fixing is going to be needed. Take into account your time, trouble, and most definitely the expense.

Step 10: Keep an eye on the future

If you’re like most people, you’ll probably live in whatever home you buy for at least the next five years. Take some time to brainstorm any major changes that may occur in your life in that time, and make sure your new home will have room to grow with you. These major changes can include new additions to your family, new business ventures that might require a home office space, or new hobbies that need room to flourish.

Step 11: When you find what you’re looking for, move quickly

Good real estate sells fast- and there’s a good chance if you fall in love with a property, that there’s at least one other person out there that feels exactly the same way. So move quickly to make sure it’s your name on the title of your dream home instead of someone else’s. This is especially true in the South Florida real estate market where real estate listings have regularly been known to reach sales agreements in less than a week.

Step 12: Always get a CMA on a prospective buy

A sure way to avoid paying too much on a new home is to have your Realtor® do a Comparative Market Analysis, or CMA, on any property you’re seriously considering as a possible buy. This market analysis will show you the recent sale prices of other comparable homes in the local area, as well as the asking prices of other comparable homes currently listed on the market.

Step 13: Get a read on the seller’s situation

[text] It’s no secret that no one wants to pay too much on any purchase- let alone on an asset as costly as a home. We all want to try and get the most for our money, so it’s only natural to take note of circumstances that may save you some cash in the end. Certain situations motivate sellers to negotiate their price and may work to your advantage, such as an impending job transfer or a long real estate listing time.

Step 14: Don’t fear taking a hard line in negotiations

Not everyone likes to haggle, but negotiation is the key to getting the best deal in real estate. If you aren’t confident in your own negotiating skills, make sure that your Realtor® is up to the task and knows exactly what you’re thinking at each stage of the negotiating process. Be firm in what you want with your Realtor® and make sure they’re equally firm in their negotiations with the seller.

Step 15: Always get a written disclosure of all defects

Recent changes in real estate law now protect home buyers even better against a failure to report any defects. This means a seller is legally liable for not reporting any defects to the buyer before the transaction is closed. As such, it’s vital to get a written report of all defects before your closing, to protect yourself in the future. In addition, any defects may positively affect your bottom line during negotiations.

Step 16: Be aware of hidden costs

There’s a lot more financing involved in buying real estate than just your mortgage. As you plan for your closing, be sure to calculate mortgage insurance, appraisal and inspection fees, transfer taxes, and title insurance into your home-buying budget. In this way, you’ll know every dollar that you’re really going to need to spend in buying your new home.