My wife and I are house hunting and noticing that home prices are on the rise all across the board. While we're glad the economy is showing signs of improvement, we want to get our new home with a minimum of monetary investment. Any tips?
- Buddy Buyer
Dear Mr. Buyer: According to online real estate brokerage Redfin.com, more than two-thirds of American homes for sale recently received multiple offers. Obviously, now that the home market is redeeming itself, it's important to know how to purchase but still leave the most money in your bank account. Thanks to Bottom Line Personal for the following advice:
• Set a final amount in your brain before you ever make that first offer. If you don't have this number (plus the specific increase you're willing to offer), you might lose your head and give up more than the property is worth. Use Trulia.com and Zillow.com to track actual sale prices on comparable properties within a couple of neighborhoods you really like.
• If your heart's set on a particular house, promise more cash if the appraisal comes in lower than expected. Everyone knows offers are usually contingent upon the property being appraised for at least the selling price. To make your offer more attractive than all others, include an agreement to pay a larger share - in cash - of the purchase price. (This is, of
course, assuming you can lay hands on tens of thousands of moolah on top of what you've already set aside for the down payment.)
• Address the seller's non-monetary concerns. Whether a smaller worry that he's unable to house Grandmother's cherished piano in the new home to the worry that his new digs won't be ready for move-in before you take possession of his old abode, speak to these worries. Assure the seller you'll help as best you can. Perhaps you can find a good home for the piano or, in the second instance, offer to rent back the house for a month or two until the seller's home is ready for the moving van.
• Consider arranging a pre-acceptance home inspection. If the seller sets an extended window for offers, think about having the inspection done prior to making an offer. Assuming the appraisal comes back in pretty decent shape, then the potential buyer can waive the home inspection contingency, which can be a real bargaining chip for you. Just remember you've got to ante up the approximate $500 fee for an inspection that will be flushed down the tube if the seller chooses another buyer.
Happy Turkey Day.
Ellen Phillips is a retired English teacher who has written two consumer-oriented books. She may be reached at consumerwatch @times free press.com.