This is the second post in a series on the home buying process. For steps one through three, click here.
Step Four: Locate Interesting Properties
The Internet can certainly help you in your search for a Sarasota home, particularly if you are still deciding which neighborhood you might want to live in. An online search can help you analyze the quality of schools, view crime statistics by ZIP code and even navigate the streets. Other important information found through a simple web search includes approximate property taxes and association dues and fees.
We suggest an initial search be narrowed down to five or six properties. After you visit these with your agent, it may become obvious that certain criteria should be altered, expanded or changed.
When you are relocating from a distance, learn to plan visits well in advance with your agent since good agents are often very busy. Planning ahead, designating specific properties of interest and gathering important location information are crucial steps to complete prior to setting up advance appointments.
Step Five: Writing and Negotiating Offers
Here is an area where the skills of a good real estate agent become extremely valuable. Since virtually everything in a real estate purchase is negotiable, you want a realtor representing you that will be a skilled negotiator and one that can juggle a variety of variables in the process of finalizing a purchase contract.
Such contracts have a great deal of basic “boilerplate” language, but many elements of the contract can be modified upon the agreement of the buyer and the seller. For example, in addition to the price negotiation, an addendum might be added to make an “as is” addendum or homeowners’ association terms may be noted. Short sales will also require amended contract language.
The purchase contract will typically be accompanied by a loan status report (LSR). This document from your lender establishes that you are financially qualified to obtain a required loan to purchase the property. The LSR demonstrates to the seller that you as the buyer are legitimately able to purchase the property involved. Keep in mind: No such report is involved in cash purchases.
The LSR does not absolutely guarantee the lender will approve your loan, but it carries a great deal of weight nonetheless. This LSR typically establishes the prospective loan terms, the down payment amount, and the amount of real estate the buyer is qualified to purchase.
It is important to realize as the buyer you should take responsibility for determining the amount of any offer, but your agent can assist by providing a comparative market analysis involving similar properties in the area. Recent sales in the neighborhood can go a long way in establishing whether the asking price is appropriate.
The realtor can also offer guidance as to the impact that various upgrades may have on the home’s value. Also, the condition of every aspect of the property can impact the fair market value of the real estate. Armed with all of this information, a buyer can decide what to offer for the property. Realistic expectations are usually imperative for both seller and buyer to have. “Lowball” offers from buyers often antagonize sellers, and this can lead to failed negotiations. Keep in mind, sellers often have many memories tied up in their home, and it is often emotionally difficult for them to entertain low bids.
Time Frame: From the acceptance of a purchase offer to closing often takes 30-45 days, although a cash purchase can often be completed in as little as 21 days. Short sales will almost always take considerably longer.
This is the second post in a series on the home buying process. Check back soon for “The Home Buying Process: Part 3.”