• presenting yourself as a serious buyer while, at the same time, keeping your emotions in check
• trying to understand and respect the priorities of the seller
• being creative and, where necessary, willing to compromise to get the deal done.

Strike A Balance – Motivated But Not Too Eager

For you, as a buyer in a buyers’ market, it all starts before you even make an offer, the first time you see that home you think might be THE ONE. It’s important that not give yourself away to the listing agent or seller by getting too excited about your “find”. If anything, ask a few questions, maybe take a few notes, and let your REALTOR® do all of the talking. The point is that ideally you’re trying to strike a balance by appearing, on the one hand, to be a qualified, motivated buyer while, on the other hand, not appearing to be too eager. Several ways you can demonstrate you’re a serious buyer:

• Have already sold your present home (if you have one)or make it clear that you’re not dependent upon selling in order to buy
• Make an all-cash offer or show that you’ve been pre-approved for a loan
• Provide an attractive “earnest” deposit with the offer
• Make a reasonable offer that doesnt offend and still gives you room to negotiate your price

Not only will this approach show that you’re qualified and motivated, it will place you in a stronger negotiating position overall. The sellers won’t want to lose you and will be more inclined to reduce their price a little and/or make some concessions with respect to terms.

Understand And Respect The Seller’s Priorities, (aside from getting the highest price)

If, through the negotiations, you can find out more about the seller’s situation – their motivation and priorities – you’ll not only improve your position, but you’ll also be able to resolve any obstacles more creatively and sensitively.  For instance, if a seller is adamant about a certain closing date, you might be able to get them to concede some other terms including price.  Or if they are skeptical about your ability to obtain a loan in this current mortgage environment, they may value a higher downpayment more heavily and concede on sales price. There are no “one size fits all” approaches to negotiating.  In principle, though, the more you know about the seller’s priorities, the more you’ll be able to work with them in order to achieve your own goals. While a home’s sale price is generally the focus of negotiations, often sellers will have needs such that the terms of purchase can significantly influence the final deal. Here are some elements in the purchase agreement that you might put on the table for discussion:

• A larger downpayment (smaller amount to be financed)
• The amount of earnest money deposit you provide
• Closing and Possession Dates
• Inclusion of furniture, fixtures, etc., not considered part of the property
• Payment for repairs required by your lender
• Payment of taxes, utilities and rents
• Payment of title search and insurance
• Payment of survey, transfer taxes and recording fees
• Payment of general and termite inspections
• Payment of attorney’s or escrow fees

The contract delineates these terms clearly, but still should be carefully reviewed and fully understood by both you and the seller so that you’re on the same page and the negotiations move forward.

Will you be sorry if you lose this home?  If so, DON’T!

Even in a buyers’ market like this one, if you’re really interested in buying the home you’re negotiating over – if it really is THE ONE – you should be willing to make some compromises to make the deal happen. If that’s not the case, then you should listen to your heart and consider looking for another home.

In summary, the key to successful negotiations is to remember your priorities and respect the seller’s – don’t let small things get in the way of your better judgment, and don’t ascribe nefarious intentions to the sellers’ actions.  They are doing exactly what you are doing – negotiating for the terms that are in their best interest.

Once you have a pending agreement with the seller, it’s time to go back to your chosen lender to finalize your mortgage details so you can close the deal. This means finalizing your down payment, interest rate, regular payment schedule and any other financial conditions associated with the closing. As noted in the section on loan pre-approval, if you’ve already been qualified with a lender for a certain loan and home purchase, this phase of buying your new home should be a relatively straightforward matter that centers around finalizing the loan details and signing the mortgage papers. That said, it can definitely provide peace of mind if you have an experienced REALTOR® by your side at the time to explain every aspect of your mortgage. Indeed, your future may depend on it. As the old saying goes, ‘buyer beware’. Particularly in these times, when so many buyers are suffering the consequences of having not fully understood their financing decisions, it’s crucial for you to work with people you trust. In this regard, a good REALTOR® can be a true friend for life. For more information on the loan process itself, see my next post detailing the steps involved.

Read previous installments of this series here:

The home buying process – Overview

The home buying process – Step 1: Define, Research, Plan

The home buying process – Step 2: Find a Realtor

The home buying process – Step 3: Pick a Lender and Get PreApproved

The home buying process – Step 4: Find THE Home

The home buying process – Step 5: Make An Offer And Negotiate With The Seller

Now that you’ve found the home you’d like to buy, it’s time to make an offer.  Your local real estate association,

The Perfect Pad...

working with legal counsel, has developed the contracts that are used for transactions.  Here in Caifornia, the California Association of REALTOR®s rewrites and updates these contracts every couple of years – editing to eliminate any ambiguitities that may have led to misunderstandings or lawsuits.  They not only enable you to specify a sale price but they include many clauses for specifying various terms of the purchase, such as the closing and possession dates, your deposit amount, time periods for inspections or acquiring a loan, etc, and other conditions. You should carefully review these clauses with your REALTOR® to ensure you understand the subtle nuances of the contract and to make sure they express the ideal terms for your offer.

In addition to drawing up the contact for you, your REALTOR® should address all your questions about the offer process.  Take advantage on their knowledge and expertise and make sure you take the time to go over it carefully and understand the process fully.  It surprises me how many people do not make this a priority…

Once you’ve written the offer, your REALTOR® will present it to the seller and the seller’s representative.  This is ideally done in person, so your agent can “pitch” it to them, advocating on your behalf and making a case for you as a stong and viable buyer.  At that point, the process depends largely on the market you’re in, the needs and priorities of both you and the seller, and the negotiating skills of the agents on both sides.  The seller can accept your offer, reject it, or counter it to initiate the negotiation process. Successive counter-offers, with deadlines for responding and meeting conditions, will be exchanged between you and the seller until a mutually-satisfactory agreement is reached or the negotiations reach a dead end. 

Negotiations can involve many factors, many of which will be discussed in greater detail in a later post Negotiating The Deal on a Home Purchase, to follow soon.

Read previous installments of this series here:

The home buying process – Overview

The home buying process – Step 1: Define, Research, Plan

The home buying process – Step 2: Find a Realtor

The home buying process – Step 3: Pick a Lender and Get PreApproved

The home buying process – Step 4: Find THE Home

Define what you want!

Simply put, key to the home search process is knowing what you’re looking for.  Among other things, that means distinguishing between “must-haves” and “like-to-haves”. To help you to target your search and define your home preference priorities, look at the form at the bottom of this post.

That said, here are a few recent facts about the search process that might put your experience in perspective:
• More than 90% of buyers use the Internet to search for homes*
• The typical buyer searches for 12 weeks and views 12 homes*
• 81% of buyers view real estate agents as very helpful in the search process*
*National Association Of REALTORS® Profile of Home Buyers and Sellers, 2010.

Take advantage of the internet and do your homework online

There are many benefits to starting the search process at a real estate website like REALTOR.com.  Better yet, use your own REALTOR®’s website, assuming they have a direct IDX feed, i.e. a direct feed to the local MLS database.   Moreover, by using your REALTOR®’s website, he or she is able to view your saved searches and “favori te” properties. You can view many homes and their details, take video tours and access neighborhood info.  Sites such as redfin, zillow and trulia are often out of date, so it’s better to avoid them or you may happen upon your dreamhome only to find out that it closed several months ago.

View homes with your REALTOR®

While doing homework online is a huge time saver, it’s also important to view homes in person. Even when property details and videos are provided online, homes can actually be very different in terms of layout, design, workmanship and other aspects than they appear. In addition, you should ideally view homes with the help of your REALTOR®, not simply on your own at an open house, as she may notice things you might miss, provide expert analysis, and act as an impartial sounding board.  Some find it helpful to start by visiting open houses on their own, but once you start zeroing, get your agent to schedule appointments and accompany you.

Home search worksheet

Main Requirements
Price range: ______________________ Lot size: _________________________
Area: ___________________________ Square footage: ___________________
Detached/Attached: ________________ Number of bedrooms: ______________
House style(s): ____________________ Number of bathrooms: ______________
Age of property: ___________________ Garage: __________________________

Specific features
(e.g., site location, view, large lot, pool, fireplace, basement, garage size, distance to school or work, additional room preferences, layout, etc.):
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
Additional comments
___________________________________________________________________

Read previous installments of this series here:

The home buying process – Overview

The home buying process – Step 1: Define, Research, Plan

The home buying process – Step 2: Find a Realtor

The home buying process – Step 3: Pick a Lender and Get PreApproved

The home buying process – Step 4: Find THE Home

In the state of California, particularly in today’s ever-changing real estate market, home buyers require many tools and resources to find their family’s dream home and close on it smoothly.  As a North San Diego County real estate agent, based in Del Mar CA, one of the steps that is often overlooked is researching and securing home owner’s insurance prior to releasing contingencies.  While it may seem like a trivial step, there are a number of pitfalls you may encounter – and you should be sure to have all your ducks in a row, well before the deadline hits, and you venture beyond the point of no return.

Here are a few of the things that can cause a problem in obtaining insurance:

• the home has a “black mark” against it because of a prior claim
• you yourself have been “red flagged” because of a prior claim you filed on a previous property
• in the purchase of a condo, the master policy may not have enough coverage to satisfy the lender you are using
• the neighborhood the home is in may have high premiums or may be uninsurable altogether because of a previous natural disaster like a fire or flood.

The list goes on, but the point is, it is critical to shop for and get a commitment for an insurance policy well before you need to release contingencies and commit to moving forward.  If you release contingencies without having done so, you may end up not being able to perform on the purchase and risk losing your deposit – potentially thousands of dollars!

For more information about the process of buying a home in North San Diego County, read our series here:

The home buying process – Overview

The home buying process – Step 1: Define, Research, Plan

The home buying process – Step 2: Contact a Realtor

For a more personal consultation, give us a call: 760-815-1318.

Pick a lender

Shopping for a lender and a loan is NOT something to start doing after your offer is accepted, when you’re on a tight timeline that contractually MUST be met.  Choose someone before you find the home you want to buy – someone not only with competitive rates, but with whom you have a rapport, who is creative and knowledgeable, who does not over promise and under deliver. Again, a recommendation from a trusted friend, colleague or family member is usually the best way to find a good lender or broker.  Ask the person recommending about their referral’s communication skills, their timeliness, and their knowledge. A good mortgage broker will help you analyze the particulars of your financial situation and goals and give you options that are specifically suited to you.

The broker will also advise and guide you throughout the process, making sure you know not only what you qualify for and what you need to do to secure the loan, but coordinate the various people involved – from appraisers to underwriters to insurance agents –and keep them on track. As soon as you start viewing homes with the serious intention of buying, interview and select a mortgage broker.

Get prequalified

It has become convention to submit a prequalification letter when presenting or submitting an offer.  The prequalification process involves a brief conversation regarding your financial situation including income and assets with your lender, and an assessment of the kind of loan product you would qualify for.  On the basis of this examination the lender will provide you with a letter detailing how much you can borrow to buy a home.  This prequalification is still subject to verification and credit check.

Prequalification vs preapproval

While having a prequalification letter to submit with your offer is good, a preapproval letter is even better.  The pre-approval process generally involves meeting with a lender, filling out an application and authorizing the detailed examination of your current financial situation and credit history.  You submit all necessary documentation and get in return a much more sold commitment letter regarding your ability to obtain a loan.

The benefits of pre-qualification and pre-approval include:

• You’ll have information about what you can afford and be able to plan accordingly

• As a pre-qualified, motivated buyer you’ll be taken more seriously when you make an offer on a home

• Lenders can tell you whether you qualify for any special programs that will enable you to afford a better home (particularly if you’re a first-time buyer)

• You will have a head start on the time lines once escrow starts which will give you some breathing room and make the process much less stressful.

Real estate financing is available from many sources, and an experienced REALTOR® will be able to suggest lenders with a history of offering excellent mortgage products and services. For more information about the benefits of pre-approval and the loan process in general, give us a call.

To read previous installments of the series, click below:

The home buying process – Overview

The home buying process – Step 1: Define, Research, Plan

The home buying process – Step 2: Find a Realtor

The home buying process – Step 3: Pick a Lender and Get PreApproved

The home buying process – Step 4: Find THE Home

Ideally, it is best to have not only a great agent, but a great agent working under the umbrella of a great company such as Coldwell Banker. My partner Maxine Geller and I have had the good fortune of being affiliated with Coldwell Banker for over 10 years. There are countless reasons why we why we chose to associate with this fine company, not the least of which is its number one market share position in Southern California.  Many of these reasons benefit not only us as agents but you as our clients.  Here are the top 12 reasons listing with Coldwell Banker benefits you.

1.    Name Recognition:     98% of the general public recognizes Coldwell Banker as a real estate company based on recent surveys.

• Benefit to client: a feeling of “being with the best” and knowing there is a natural sense of credibility lent to their listing.

2.    100 Years Experience:  Coldwell Banker has been in business for over 100 years and has national/international experience.

• Benefit to client: no matter what the real estate market is doing, Coldwell Banker has seen it all and has the knowledge and resources to market properties in the most effective manner.

3.    Internet Presence:  Coldwell Banker has a strong internet presence due in part to its partnership with Realtor.com which insures better shelf position due to requirement to have at least 18 photos of property for each listing.  Also, Coldwell Banker.com and CAMoves.com are recognized as leaders in the industry.

• Benefit to client: over 90% of buyers shop first for real estate on the internet  with a majority of their time spent on Realtor.com, giving listings great exposure.

4.    Cutting Edge Technology: Coldwell Banker is the first real estate company to develop its own YouTube channel for real estate searches, OnLocation.

• Benefit to client: web surfers can search for homes through viewing videos instead of static images, bringing properties to life, and giving listings much better exposure.

5.    Lead Router: Coldwell Banker invested in the development of a system that notifies listing agents, via their cell phone, that a potential buyer is interested in obtaining more information about their client’s property within seconds of the time the buyer submits the request.

• Benefit to client: internet users want a fast response to their inquiries and no one responds faster than Coldwell Banker.  Information about your property and an appointment to view it can be provided almost instantaneously.

6.    Risk Management:  Coldwell Banker maintains a strong risk management team on staff to support agents in the field.

• Benefit to client: this program assures that your agent is constantly updated regarding legal issues in real estate and will be diligent in his/her efforts to assure a risk free transaction.

7.    Training:  Coldwell Banker maintains an in-house education team that coordinates on-going training for agents and staff.

• Benefit to client: assurance that your agent is up to date with the latest information on all aspects of real estate

8.    Cutting edge Print Marketing:  Coldwell Banker conducts national promotions and provides agents easy access to cutting edge high quality print marketing through their affiliation with the Merrill Corporation and Impact Marketing.

• Benefit to client: assurance that your property will be presented in a professional manner befitting its value

9.    In-House Email Marketing Program:  All Coldwell Banker offices participate in an interoffice email marketing program to promote and exchange information about their client’s wants, needs and properties for sale.

• Benefit to client: provides a tremendous network for marketing their home immediately through participation in the in-house email program

10.    Concierge:  Coldwell Banker provides clients with access to referral services that have been investigated and prequalified.

• Benefit to client: clients can use our one stop shop to find reputable service providers that have already gone through a rigorous screening process, are high quality, ethical, and reliable.

11.    High Level of Professionalism:  Coldwell Banker prides itself in maintaining a high level of professionalism among its agents and staff that is well recognized in the industry.

• Benefit to client: clients can be assured that the sale of their property will be handled in a professional appropriate manner

12.    Affiliated Services:  Coldwell Banker has established relationships with their affiliated services including escrow, title, home insurance and mortgage services.

• Benefit to client: through the affiliated services clients can be assured there is a team in place all pulling in the same direction to achieve the goal of the sale of their home

To find out more about the advantages of listing with a superior team, the Geller-Meier Team, at a superior company, Coldwell Banker, give us a call.  We’d love an opportunity to earn your business.

…mortgage rates at their lowest level for 2011 after declining for the fourth consecutive week. The 30-year fixed-rate averaged 4.63 percent, and the 15-year fixed averaged 3.82 percent.

Buying real estate is a hugely complex business transaction.  It involves not only the purchase of one of the largest assets most will ever buy or own, but hundreds of details which are critical in terms of their cost and their liability.

With all the unique opportunities and potential pitfalls of the current market, it’s even more important for you to contact a professional in the field.  Because REALTORS®, i.e. real estate agents who are members of the largest trade organization, the National Association of REALTORS®, are held to a higher standard than your average agent, it is in your best interest to choose a REALTOR® once you’ve definitely decided to buy.

In choosing a REALTOR® to guide you through the property search, financing, negotiation and transaction processes, you should consider their local market knowledge, experience and track record.

A few tips on how to find a great real estate agent –

• A referral from a friend, family member or colleague is always best – but explore what it is the referrer liked about the person.  Make sure it isn’t simply because he or she is their brother or mother-in-law!
• Online through various searches or websites – but be sure to check references and not go with someone just because they have a fancy website.
• Local marketing – though beware, a self proclaimed “neighborhood expert” may be neither a neighborhood expert nor a quality professional.
• Optimally, find a great agent at a great company.  I work for the best company Coldwell Banker (read why Coldwell Banker is the best real estate company). That said, while the company is important, the quality of your agent is more important.  It is better to have a great agent at a not-so-great company than a lousy agent at a great company. The transaction from start to finish is predominantly in your agent’s hands, not in the hands of his or her company.

As your agent spends time with you, she will begin to get what’s truly important to you.   A perceptive agent will read between the lines, sometimes picking up on priorities you didn’t even know you had.  A good agent will save you money and protect your interests.  A good agent wants you to be thrilled with your home not just on the day you close and get the keys, but 2 months and 2 years down the road.  Buying a home is a major journey, sometimes through treacherous waters – make sure you are choose your co-captain carefully.

Read previous installments here:

The home buying process – Overview

The home buying process – Step 1: Define, Research, Plan

And subsequent installments here:

The home buying process – Step 3: Pick a Lender and Get PreApproved

The home buying process – Step 4: Find THE Home

Define Your Goals, Research Your Options, Make Your Plans

Given that buying and moving to a home is such a huge step, it’s all the more important for you to educate and prepare yourself as much as possible in advance. This means clearly determining why you’re buying and what kind of home you’re looking for. It means doing some careful soul searching into your priorities and discussing them with your spouse if you are married.  It is amazing to me how many times my partner and I sit down for an initial consultation with new clients and discover that the husband and wife are not really on the same page in terms of their home buying goals.  They often have different “must haves” lists, and the “wish lists” often have no overlap at all!

To summarize, explore these questions:

1.    What is important about buying a new home to you?
2.    What is important about buying a new home to your spouse?
3.    What are the essential, non-negotiable, “must have” features of the property for you?
4.    What are the essential, non-negotiable, “must have” features of the property for your spouse?
5.    What are additional wish list features that you would like, but are not critical?
6.    What are additional wish list features that your spouse would like, but are not critical?
7.    What is the order of importance of the items listed in 3 through 6 for you and your spouse?

If people would do this kind of preparation in advance – through private contemplation or thinking it through with family or friends if you are single, through frank and open conversation if you are married, it would significantly ease the stress of the home search process and make it much more efficient.

An anecdote from the real world…

We are currently working with buyers relocating from the east coast because of the husband’s job transfer.  After looking at many homes in their target areas, we found that the husband was gravitating towards tract homes in Scripps Ranch, while the wife was drawn to more custom, unique homes in Poway.  It turned out, after viewing many homes and finally distilling out the unspoken preferences, that the husband’s priority was to live close to work to minimize his commuting time and maximize family time, while the wife’s priority was to find a home with character and charm that suited her view of her family.  Once this became clear, they could focus on the overlapping priorities and hone in on a neighborhood close to his work, yet in a cluster of newer homes that were customized as a result of the recent Scripps Ranch fires.

We have recently opened escrow on the perfect property that both are thrilled with!  Just a few more hurdles to jump through till we’re home free!

The home buying process – Overview

The home buying process – Step 1: Define, Research, Plan

The home buying process – Step 2: Contact a Realtor

The home buying process – Step 3: Pick a Lender and Get PreApproved

The home buying process – Step 4: Find a Home