1. Don’t Go At It Alone
Hiring a buyer’s agent to help you is FREE to you. They are the local market pros, know the area, and know how a lot of the listing agents and builders work in negotiations. They’ve already been there, and will have a lot more tricks to the trade than you think you do, and can get you a better price on your own. Why not have a professional set of ears, eyes, and hands helping you find your next home? (See Why Use a Buyers Agent)
2. Narrow Down Neighborhoods
Drive around through all the neighborhoods in the area where you want to live. Ask your agent which ones they recommend for you based on your needs and the amenities you require. Get to know what communities you do and don’t want to be in. Keep a running list of which ones and why, and give it to your agent. Just like you wouldn’t waste time looking at 2 bedroom homes if you are looking for 4 bedrooms, there is no reason to view homes in a neighborhood where you don’t want to live.
3. Know Your Needs But Be Flexible
It is important to know your needs in a home, but it’s important to differentiate between what are true ‘non-negotiable needs’ and what are ‘wishes’. You might find a home has almost everything you want & need, but it might have one quality you didn’t want. How much of a deal breaker is that one thing? Don’t let one thing keep you from making a decision on a perfectly great house for you especially if the functionality is there. There is no such thing at the perfect house unless you can afford to get it custom built. Keep in mind that the bones and location of the house are things that can’t be changed. Paint colors, floors, cabinets, countertops, and lighting fixtures are easy to fix (unless of course you want to change all of that, then we are talking a lot of added expense).
4. Get Pre-Approved
This is really in the top 3 of what you should do first, but some buyers are so resistant to this advice that I needed to soften the blow a little by putting it lower in the list. For some buyers, getting pre-approved is too much commitment. They don’t realize how important this is to have first and foremost before even going out to look at homes. Here’s why:
- You are wasting your time. Without a pre-approval letter, you literally have no idea how much home you can afford to buy. You may think you do, but I promise it’s not as simple as having the down payment, good credit, and doing a quick online calculation. In order to really know, a lender has to look at your tax returns and credit. They are the ones that truly know what will affect your loan approval process. Buyers are often surprised at what comes up when a lender looks at their information and how it will affect them.
- Pre-Approval letters are expected to accompany an offer. Without it, the seller takes too much risk removing their home from the market for a buyer that might not really be in a position to buy their home. Don’t expect your offer to even be considered without a pre-approval letter.
- Waiting to find the home you want before getting pre-approved can cost you the contract. Getting pre-approved can sometimes take as little as 3 hours, or as much as week (depending on your individual circumstances). Some other buyer with a pre-approval could place an offer on that same house while you are still trying to get yours together.
5. Don’t Use Just Any Lender (Even if they are from your big bank)
Be wary of allowing an out-of-state lender, big bank, or some random lender check your credit. Whenever possible, consult with your agent who they would recommend. They know which lenders they have had a good experience with through a closing process. Agent’s are not allowed to get paid for sending business to any sort of vendor, so can usually trust that they are making a true recommendation. Their one motivation for referring a lender that they know who they can trust to get the contract to the closing table. In Florida, as possibly in other states, the local lenders are usually the best at getting you from contract to close with as little speed bumps as possible. Out-of-state lenders often don’t know our contract timelines and often don’t care. Trust me when I say I speak from experience on this one.
6. Bones, Location, and Condition
Don’t disregard a home based on things that can easily be changed like paint colors, countertops, or dead grass. A lot of things can be taken care of through negotiations or after closing. Don’t miss out on an otherwise great house that checks all of your boxes just because you don’t like the color of something. Location can’t be changed. Condition and bones of the house can be changed, but at a typically higher expense, so it’s okay to shy away if you don’t want to invest in a contractor to fix the bigger items.
7. Don’t Dilly Dally
If you find a house you want, chances are someone else wants it too. ‘Sleeping on it’ often leads to losing the opportunity to buy because the buyer who looked at it the day before you decided to put in an offer. Now you are stuck with your second or third choice because you got cold feet. I promise you it is always a buyer’s biggest regret. They will always compare the rest of the homes to the ‘one that got away’.
8. It’s Too Expensive
Don’t shy away from seeing a home that is priced too high. That is just an ‘asking price’. Sellers can ask for whatever they want. It doesn’t mean they are going to get it. I like to refer to it as the ‘try to get’ price, because the seller figured they’d try to get a higher price but ended up scaring away any chance of an offer. This is where you swoop in. Most of these sellers eventually become desperate to sell after a time. Prices can almost always be negotiated. Often times sellers are afraid to reduce the asking price of the home, and are just waiting for someone to place an offer that is more reasonable anyway. They say ‘I’m not price reducing. Let the the buyer offer less.’
9. Don’t Go Into A Model Without Bringing Your Agent
The sales people that work for the builder are just that: THEY WORK FOR THE BUILDER, not you. They are not looking out for your best interests. They are looking to make a sale for the most money the builder can get, and if their community is selling fast they don’t need to cut you any deals. In comes a buyer WITH an agent that has a relationship with those sales people. Those new homes sales consultants are going to be more flexible with price if the have to negotiate with an agent. The biggest reason is because buyer’s agents are the keepers of even more business for the builder. They want that agent to bring them as many buyers as possible. Because of thi they are more likely to be more flexible negotiating with an agent then without. An experienced buyer’s agent will know the weaknesses and common negotiables of the individual home builder beyond their common ‘$10,000 Towards Closing Costs’ marketing gimmick that they are giving to everyone by increasing the price of the home by $10,000.
10. Loyalty Goes A Long Way
Do not jump around and have multiple agents helping you, and don’t go into open houses without telling the listing agent you are already working with a buyer’s agent. If you see a home online that you want to see, let your agent know. DO NOT call the agent that shows up on the listing. Whether you mean to or not, you are inadvertently causing an ethics issue between ‘procuring cause’. Remember that your agent doesn’t get paid unless you buy a home and make it to the closing table. If another agent can claim that they showed you the property first and/or wrote the contract, you have officially cut your agent off from their paycheck. They will not be getting paid for the work they have done for you. If you never received your paycheck for work that you did, you would not be happy, so don’t do it to your agent. That is just bad karma all around.