Spring Market is Already Here

It isn’t too soon to be thinking about the spring real estate market, as things have moved up a bit due to the home buyer’s tax credit, the government stimulus program that makes it possible for home buyers to receive a substantial tax credit if they purchase a home before April 30, 2010. As a result, folks who may have been planning to make that purchase of a lifetime later in the year have decided to move up that decision.
If you now find yourself in that category and are about to begin the house hunting process, here are several things to keep in mind.

First, find yourself a competent realtor and enter into a buyer’s agency agreement with them. Since your agent is compensated out of the transaction (paid by the seller), there is no reason to fear this relationship. Keep in mind that all of the terms of this agreement are negotiable, so it will be possible for you to fashion something with which you can be comfortable.

Having your own agent is important so that you have an advocate on your side, and you will find the relationship of trust and confidentiality invaluable as you make your way through this often complicated process. Your agent will help you with mortgage qualification, search the market for you, assist with matters of contract, lead negotiations, follow the transaction throughout its course and counsel you through the settlement. Your agent should be someone with whom you feel comfortable and feel confident in his or her knowledge of the market and who is skilled in the techniques needed to secure your new home. A referral from family or friends often shortcuts the agent search, but if you need to do it on your own, a few informal interviews will no doubt set you on the right path.

One sidebar: I am often asked whether experience should be the determining factor in agent selection. Although I would like to think that all of the years I’ve spent at this endeavor are worth something, I wouldn’t say that inexperience should be a disqualifier. You need to look a little deeper into individual circumstances; new agents are usually full of enthusiasm and energy, which may be exactly what you need. As long as the agent has an experienced support system to help, I wouldn’t hesitate to hire them.

Next, let your agent guide you in the mortgage qualification process, which is crucial to your success. In nearly every instance, the seller of your potential new home will demand to know if you are the real McCoy. They will expect to see some documentation from a mortgage lender stating that you are able to make this purchase.

Even more fundamental is the fact that you and your agent are going to expend countless hours trying to find you just the right property, and it would be a crushing blow to find your dream home and then learn that you can’t qualify for the financing. Preapprovals are provided for a purpose, so get one.

The search process can be very arduous; there are thousands of properties on the market, and sorting through all of the available possibilities can be rather daunting. As you and your agent attempt to narrow the field, be as clear as possible in your description of what you want. Prioritize. No one gets everything they want in a new home, so be careful to explain what you must have versus what you would like to have.

Once you’ve found it, the game is on—negotiations. You may believe we are in a buyer’s market, which by definition means, buyers rule. The key to a buyer’s market is that if you are unable to reach an agreement with one seller, you can move on to another acceptable property. Supply and demand.

However, finding your dream home isn’t that academic. Once you’ve found a home you really love, it makes no difference whether it is a buyer’s or sellers’s market; you just want it. Follow the guidance of your agent and you will succeed in acquiring your property. If your concern is overpaying for the property because your emotions ran away with you, don’t worry—an appraisal will be performed and your lender won’t provide the mortgage if the appraisal comes in below the sales price.

Finally, if you have any concerns, your agreement can be made subject to resolving them. For example, property conditions can be made subject to an inspection, or if you have another house to sell before buying, you can make your purchase subject to the sale of that home. You can actually make your offer subject to nearly anything that you and the seller agree upon, and then resolve the issue after the property is under agreement.

In any event, with appropriate representation you will succeed, so happy hunting!

Gary Straub has been a real estate professional since 1970 and is a member of the Northwood Realty management team.