Monday, June 11, 2018

Why Your Pre-Approval Should Not Determine Your Home Buying Budget

Just because you’re pre-approved for a certain amount doesn’t mean that you can afford it. Here’s what I mean.

Selling in the greater Houston area? Get a market analysis report
Purchasing in the greater Houston area? Get full MLS access

Today I wanted to talk to you about a very common question I am asked, “Why am I shopping for less than my pre-approval amount?”

When you are looking to purchase a home, there are a few different things you need to realize. The first one is that the amount that you are pre-approved for is not necessarily the amount that you want to spend on a monthly basis.

This little pointer will help make sure that you stay on budget and do not get overwhelmed by payments.

The max pre-approval amount is unimportant. The max monthly mortgage payment is what you really need to look at. You should be comfortable with the amount you are spending each month on your home. You may be able to get approved for $300,000, but you may not want to deal with the payment that goes along with that price. Find out what you are comfortable spending on your mortgage on a monthly basis, and ask your lender what home price that equates to.

This little pointer will help you stay on budget and make sure that you do not get overwhelmed by your payments. If you have any questions about this or have any other real estate needs that I can help you with, please feel free to give me a call or send me an email. I look forward to hearing from you soon.

Friday, April 6, 2018

Being a Seller in a Multiple Offer Situation

If you want to generate multiple offers for your home sale and pick the best one possible, listen to your Realtor when pricing your home and look at each offer carefully.

Selling in the greater Houston area? Get a market analysis report
Purchasing in the greater Houston area? Get full MLS access

As a seller, there is a way to be smart about handling a multiple offer situation. 

When you start the process of selling your home, you have to make a shift in your perception. This is business. You’re selling a product in a large market that will dictate many of your decisions. You can choose to ignore the market, but to do so is risky, and it’s a decision most people end up regretting. 

There are many risks in pricing your home too high—the most important being you will sell it for less than if you would’ve just priced it appropriately to begin with. 

Why don’t buyers make offers on overpriced listings? They don’t want to offend the seller. It goes against human nature to offer substantially less than asking price to the seller. It’s insulting to them and embarrassing for the buyer. Buyers erroneously believe that the seller knows the home is overpriced, and if they would be willing to sell the home for less, they would simply lower their price.

Buyers also assume the seller must have turned down lowball offers from other buyers because, surely, someone somewhere down the line offered a reasonable price to the seller. Oftentimes, though, there are no offers at all. As a seller, don’t put yourself in this position. 

How can you generate multiple offers for your home and choose the right one? Now we’re talking business. 

Don’t put yourself in a position where no offers are coming in.

If you’re dreaming of a quick sale, listen to your Realtor regarding your home’s market value and how to price it. You’re more likely to attract multiple offers for your home if you price it correctly than if you overprice it. Buyers may be willing to pay more than the asking price, but they want it to be their move and based on other buyers also placing bids. Most buyers will run away from a bidding war if they think you already overpriced the house. 

Next, look at each offer carefully—not all of them are created equal. Just because someone offers a few thousand dollars more doesn’t mean their offer is the one to pick. Factors like whether the buyer is pre-qualified or what type of loan they’re using can also affect how solid their offer is. Another factor to consider is whether the buyer has to sell their original home first before they can buy yours. 

There are many aspects of a contract that can be either pros or cons, and you have to dive through all of them to make sure you’re selecting the right offer. Let your real estate agent advise you on which offer is the best. 

If you have any other questions about multiple offers or you’re thinking of buying or selling a home in our market, don’t hesitate to reach out to me. I’d love to help you.

Tuesday, March 13, 2018

How to Deal With Multiple Offers as a Buyer

How can you compete in multiple offer situations? Here are a few of our top tips.

Selling in the greater Houston area? Get a market analysis report
Purchasing in the greater Houston area? Get full MLS access

Today we’re going to talk about being a buyer in a multiple offer situation. Unless you really play your cards right, this place could easily slip through your fingers. That’s why it’s critical to put the best offer forward from the start. Here are a few tips for how to win:

1. More money. It’s that simple. Money talks. The sale price isn’t the only place where you can make a strong financial stance. Consider increasing your escrow deposit or option fee. Committing more money up front will show sellers that you’re serious. If you’re hesitant at offering full price, how would you feel if you lost out on this home by $1?

2. Write a letter. Beyond the basic agreement of sales paperwork, include a letter explaining why you’re so passionate about buying the home. It can definitely help you stand out from the crowd. Telling the seller about you, your family, and why you love the home might help build empathy with the seller. Letters are especially effective when a seller has an emotional connection to the property.

Consider increasing your escrow deposit or option fee.

3. Keeping financing clean. Where financing is concerned, buying with cash is always attractive to sellers when you can afford it. You don’t have to deal with a lender, appraiser, or anything else. However, cash isn’t an option for everyone. If a mortgage is a must, make sure you can provide a pre-approval so that sellers know you’re vetted by a lender.

4. Buying a home as-is. Agreeing to buy a home “as-is” releases the sellers from the responsibility of making any repairs. That’s why it's a very attractive option for them. Keep in mind that buying a home as-is doesn’t mean you have to forgo inspections entirely, but you’ll only be able to use them for informational purposes.

5. Have your agent make a call. Their job is to make sure your interests are communicated to the seller throughout the negotiation process. When you’re competing against multiple offers, knowing what the seller wants to see can be a big advantage. 

That’s all I have for today. If you have any questions for me about multiple offers or anything else, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.