I’m
sure by now many of you are aware of the “heating up” of our local Real Estate
market. Buyers are active, home
prices are climbing, cash investors are purchasing, rates are low – what a
perfect concoction for another bubble!
While we can’t do much of anything to control the market, what we can do
is prepare, and when the market starts to heat up again as it is now, there is
much that’s worth more to a buyer then true preparation, strategy and
knowledge. Without searching and
purchasing with a specific plan of action in place you may find yourself stuck
in an underwater home; as we know – history tends to repeat itself. If in the market for purchase, be sure
to take some points into consideration.
Know your limit!
Before
even searching for a home on-line or with an agent, it is imperative that you
are 100% aware of your true purchase power. Many buyers simply get a pre-approval letter from a lender
and hit the road. Unfortunately
these pre-approvals are often insufficient and simply not valid for each and
every scenario. Factors will arise
that can and will quickly affect your true purchase power. HOA fee’s, insurance, taxes,
assessments, etc., these are all current and realistic components which can
have a large effect on your true dollar limit. Be sure to work diligently with your loan officer and/or
Realtor® to fully understand not only your credit and income based approved
loan amount, but also all of the factors mentioned and how they will affect
your bottom line. You don’t want
to place offers on homes unless you are positive the home is within your true
spending limit after taking all factors into consideration.
Dare to compare
Comparables
or “comps” are a large driving factor of the Real Estate market, without them
we’d simply be shrugging our shoulders and guessing values. As pertinent information is so readily
available on-line and through your Real Estate agent, it’s simply prudent to
use all information at hand to get an idea of what True Fair Market value
actually is for any home you have interest in. We all know what it’s like to fall in love with a home, but
if you over pay the love quickly turns to disdain. Protect yourself and your stress level by properly “comping
out” any and all homes you have interest in prior to final negotiations on any
home. Moving to quickly based on
emotion while ignoring data, facts and trends will simply place you on the
wrong side of this slippery slope.
Protect yourself by having your agent fully educate you on current
values and be sure not to overpay.
You’ll be doing the future you a huge favor.
Be on the phone
regarding your loan
Due
to rapid appreciation, past bubble and banks precautions in the lending field
many loans are being denied at the last minute as of late. If a deal falls apart in the first few
weeks, it can be heartbreaking – but to fall apart a few days before or on the
actual day of closing can be life changing. I’ve seen moving trucks packed, rental units cleared out and
buyers and sellers at a closing table followed by a dead deal. If financing your purchase it is vital
to consistently stay on top of your lender, or mortgage rep regarding your loan
and it’s process. Ask for and
demand commitment letters, appraisal clearance, underwriting acceptance,
etc. These are issues you want
remedied before you pack. With
escrow at risk and inspection and appraisal fee’s that could go to waste, it’s
simply good business to stay abreast of this situation, if you can’t stay on it
be sure your agent does.
Keeping these factors in mind can and will save you time,
aggravation and most importantly – money.
For additional tips please feel free to reach out to me at rick@rickrapp.com or visit the TMR office
at 5923 W. Hillsboro Blvd, Parkland FL.
