For most peoplethe biggest purchase is a bargain home and it is enticing while being extremely complex in nature. It is even more difficult to know whether it is a great bargain or not. Here are 10 steps to finding a bargain home, according to Fred Franks a Realtor with Local Realty Service
Step#1: Right Timing
Real estate is all about timingwhen the interest rates are lowor maybe a slack in the lending criteria.Pre-approved mortgage sets you on the right path as everything has been checked and verified like your income, debt, credit rating and score.
Oncethe mortgage is sorted out then it gets easy to concentrate on the loan terms and choose your “dream house” when you find onethat you can rightly afford even though there may be more options in terms of properties.
Step#2:Set the Dollar Limit
After your mortgage is approved, you can decide on the amount you ‘want’ to pay for the house, not the amount you ‘can’ pay. Surely, the amount for which you qualify will not be the amount you want to spend on just purchasing the house as you would want to spare some to allow for a changein the lifestyle.
Step#3:List, Check and Integrate
Narrow down your search in the market where there are many choices. Zero-in on the one with the exclusive features of your future home, items, appliancesand accessories you need.Your list must be very precise; make sure the house you are looking for is really the one you want.
Your spouse and children can help make a separate list of everything they need in a house and then integrate them. With a list, your approach is likely to get you a house that your family wants and makes it easier when you approach sellers and real estate agents.Thelist is a constant reminder of everything you really need and will not let you fall for something beyond the dollar limit.
Step#4: Do an In-depth Research
In case there are a few specific communities that you would like to live in, then this requires an in-depth research. If you do not research, you may get caught up ina lot of choices in finding the “perfect house”. Your research will enable you to take advantage of the varied choices in hand.
Research the sold prices of comparable properties and similar transaction types like short sales to short sales and regular equity sales to the same. Also, check the list price (LP) to a sale price (SP) ratio, ideally the LP: SP ratio should not be lower than the average, and if it is higher, then it is likely that you have indeed bargained well.
Step#5: Hire a knowledgeable Real Estate Agent
A trustworthy real estate agent will let you focus on your search according to the checklist you created and avoid the pricing pitfalls. The seller is paying the agent so it is best tohire a good real estate agent who will be your guide at every stage including negotiations.
Step#6: Listconcessions or Repairs in the First Offer
Let therebe space for flexibility right in the beginning during the first offerrather than dropping it at the end; when the both parties want to reach an agreement.
Step#7: Leave Room for a Negotiation
Many sellers simply assume that if you will reduce the asking price by a few thousands and then counteroffer, however, if you offer too little,you may not be considered a serious buyer and if it is too high then there is very little room to negotiate.
Step#8:Keep Other Houses as Options
With other options in hand, you will see things more objectively and will not get carried away. If you set your mind on just one house you may end up paying more than it is really worth. Your agent can convey the point that you are considering other homes; it is just more respectful and honest.
Step#9:Talk to your Insurance Agent
The neighborhoodyou are buying a house in will affect your home and auto premiums as many localities are seeing an increase in premiums and it adds up to the cost of living and usually ignored until the time you begin living there.
Step#10:Know the Market Trend
Knowledge about the real estate market and the way it trends with lower rates and affordablehousing price, it is a good opportunity.
The best ways to get a bargain house is to follow these 10 steps to finding a bargain home and most importantly haveclarity on the personal finances, said Katrina Barone of Houses for sale in Ocala FL,including the housing costs that can be borne like the down payment, premiums, monthly installments and closing costs before agreeing to thefinal price of the bargain home.