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.

6 Tips for Buying a New Construction Home

How is buying a new construction home different than buying a resale home? I’ll go over six important points today.

Selling in the greater Houston area? Get a market analysis report

Purchasing in the greater Houston area? Get full MLS access

There are a few things that every homebuyer needs to know about new construction. I’ll go over six of them today.

1. New homes may not be listed in your local MLS. Unlike regular sellers who list their homes with local real estate agents, home builders often have their own sales employees working for them on the side. They do this to have more control and cut costs.

2. New homes are often sold before they’re built. The builder will generally get financing lined up, map out the construction and sales process, and try to sell you as many homes as possible before they even start building the one you decide on.

3. The first buyers may get the best discounts. Early in the sales process, there may be room to negotiate the sales price down. With that reward comes a potential risk; by being an early buyer, you are committed to the project.

4. Builders don’t have a personal connection with the home. It’s just a numbers game for them. They are not focused on what’s good for you. They are focused on the spreadsheet rather than sentiment. They want to make sure that you can qualify for the loan, and they set prices based on inventory.

You may be able to get some free upgrades instead of reducing the price.

5. Discounts may be available in the form of upgrades. If you're nearing the end of the sale cycle and the main homes have already been sold, the builder may be willing to negotiate on upgrades. If they reduce the price of your home and the sale closes, then the sale price becomes public record. If they offer you an upgrade package, such as swapping carpet for hardwood floors, there’s no way to track that in the public record.

6. Builders do like working with Realtors. Believe it or not, it’s in their best interest for a professional Realtor to be working with you. Remember, the salesperson represents the builder. They are looking out for the builder, whereas I will look out for you.

If you don’t already have a Realtor to help you when looking at new construction homes, or if you have any other questions, make sure to give me a call or send me an email. I would be happy to help you!

4 Costs Homebuyers Often Forget About

Today, I’d like to go over four costs you may have forgotten about when making your home buying budget.

Selling in the greater Houston area? Get a market analysis report

Purchasing in the greater Houston area? Get full MLS access

It isn’t cheap to buy a home these days, and I’m not just talking about the price of the home itself. Unexpected out-of-pocket costs can pop up during the process.

It isn’t cheap to buy a home.

Today, I’d like to go over four costs you may have forgotten about when making your home buying budget.

1. The inspection. After you’ve made an offer on a property, you’ll usually need to pay an inspector to take a look at the home. This can run you a few hundred dollars. But, if there are any structural or safety issues, you may have to pay another professional to look specifically at the problem area.

2. Extra costs at the closing table. Beyond the closing costs themselves, there are a few additional expenses that buyers sometimes forget about at the closing table. Many lenders require you to pay a year’s taxes and mortgage up front. If the seller prepaid any of the taxes or fees, you’ll pay a prorated amount for the next of the year.

3. The move. Unless you’ve got some family members who can take care of most of this work for you, moving can be an expensive process. Costs will vary greatly depending on how much you’re moving, how far away you’re moving, where you live, and more. In any case, expect to pay a few thousand dollars.

4. Immediate costs. You may be able to put off new furniture purchases and renovations, but there are a few different expenses to expect right away. For example, you’ll need to hire a locksmith to change the locks in your new home. There could also be deposits or fees associated with setting up or transferring your utilities. Also, remember to plan for both routine and unexpected maintenance costs. Most real estate professionals will tell you that something in your new home is going to break down within the first year. So, set up an emergency savings account with at least six months’ worth of living expenses.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Which Renovations Will Give You the Most Bang for Your Buck?

Today I want to share with you some home renovations you should consider and some you should avoid if you want a high return on your investment.

Selling in the greater Houston area? Get a market analysis report

Purchasing in the greater Houston area? Get full MLS access

If you’re thinking of making some renovations to your home, how do you know which ones will be a solid investment and which won’t?

It’s key to consider mass appeal for the sake of resale value.

Throughout any renovation process, it’s key to consider mass appeal for the sake of resale value. Whether you’re planning to remain in your home for a while or looking to freshen up the place to put it on the market, here are some renovations experts say will bring the greatest return on your investment:

• Entry door replacement, 96.6%
• Deck additions, 87.4%
• Attic bedroom, 84.3%
• Garage door replacement, 83.7%
• Minor kitchen remodeling, 82.7%

On the flip side, here are the renovations that yield the smallest return:

• Home office remodel, 48.9%
• Sunroom additions, 51.7%
• Bathroom additions, 60.1%
• Backup generators and master suite additions, 67.5%

These are definitely things to consider when thinking about making renovations to your home. If you have any questions about which renovations to make to your home or you’re thinking about buying or selling a home in our market, don’t hesitate to reach out to me. I’d be happy to help.

How to Figure Out How Much House You Can Buy

If you’re looking to buy a home but are unsure of how much house you can afford, here are five steps you can use to figure it out.

Selling in the greater Houston area? Get a market analysis report

Purchasing in the greater Houston area? Get full MLS access

One of the questions I get asked a lot as a Realtor is, “How much house can I buy?” In other words, how can you determine what your housing budget is when purchasing a house? There are five steps you must follow:

1. Figure out your household’s income after taxes. What do you and other income earners who will be contributing to the household bills bring home each month after taxes? Look at your last paycheck stub, ask your HR department, or use an online paycheck calculator to calculate this amount.

2. Make a list of your household’s recurring monthly expenses. This should include bills you pay every month and bills you only pay some months—like car insurance. If you don’t already have a way you’ve been tracking your budget, look at your checkbook, your bank statements, and your credit card statements to help figure out what you’ve been spending. Note which expenses are optional and which are necessary.

3. Make a list of expenses that you will add to when you become a homeowner. Expenses you’ll have that you didn’t have as a renter include water, trash, and home maintenance. You’ll also pay property taxes and hazard insurance. If you’re moving further from your job, your transportation costs may increase as well. If you’re going to make a downpayment of less than 20%, you’ll have to factor in the monthly cost of private mortgage insurance (PMI). Remember, it’s best to estimate high when planning your budget just to be on the safe side.

I can refer you to a local lender who can help you with these steps.

4. Determine how much you will have left after expenses to spend on housing. A lender can help you determine your maximum monthly payment by calculating what they call a debt-to-income ratio. Basically, this is what gets paid into the home versus what gets paid out on a monthly basis. Once you’ve determined your household budget, you should have an idea of what you’re comfortable paying on a monthly basis for a house. Don’t forget to leave room for emergencies, retirement, or whatever else you want to save for. In other words, count savings as a non-negotiable expense.

5. Figure out how much house you can buy. The No. 1 way to truly know what your budget will allow for on a house note is to sit with a mortgage lender and have them look at your credit score and finances. A great lender will be able to help you figure out what your ‘no-more-than’ amount should be, which will determine which price points you should shop in. As a Realtor, I can help guide you to a local lender who will be an expert in these areas.

If you have any other questions about this topic or you have a topic in mind you would like to see me discuss in a future video, please don’t hesitate to give me a call. I’d love to hear from you!

What Happens After You Get Approved for a Home Loan?

Getting approved for a home loan is just step one of the home buying process. Here’s what you’ll need to do next.

Selling in the greater Houston area? Get a market analysis report

Purchasing in the greater Houston area? Get full MLS access

What happens after you get approved for a home loan?

Now comes the fun part—looking for a house! Once you’re pre-approved, you know what your budget is, and you know what you’re looking for, it’s up to us Realtors to help you find a home. It’s your Realtor’s job to not only send you houses, but also research houses you might find on your own.

Looking for a house could involve one trip out where you see five different houses or five trips out where you see 10 different houses. The time frame depends on you and how long it takes you to find the right house.

These are the steps you must take before getting into your new home.

Once you find the right house, it’s time to submit an offer. First, you and your Realtor discuss how to write up the terms of the contract, then you submit the offer to the seller. I like to call this part ‘opening up the lines of communication.’ Basically, you’re letting the seller know what you want and what you would like to do. The seller will either accept the offer, decline the offer, or make a counteroffer explaining what changes they want and what they’re willing to do.

Various things can happen after this point. Once you’ve negotiated the terms and you’ve gone under contract, you’re ‘opening title,’ where you deposit your earnest money. This earnest money represents your commitment to move forward with the sale of the house. You also deposit an option fee. This gives you the unconditional right to terminate your contract for whatever reason. It also gives you the time you need to do your inspections and negotiate any repairs.

Once you’re past the option period, it generally takes 21 to 30 days to close a loan. In total, once you pick a house, submit an offer, and get that offer accepted, you’re looking at 30 to 40 days to close.

Once you’ve done all this, you’re well on your way to getting into your new home. If you have any questions about today’s topic, please feel free to reach out to me. I’m always happy to help!

What Is the First Step to Owning a Home?

The very first step you should take when buying a home is getting your financing in order. I’ll explain why today.

Selling in the greater Houston area? Get a market analysis report

Purchasing in the greater Houston area? Get full MLS access

The most common question I get asked when someone is looking to buy a home is “What is the first step?”  

When you’re getting ready to buy a house, the very first thing you’ll want to do is secure your financing. You’ll want to make sure that your budget is where it needs to be as well as make sure your debt-to-income ratio matches up with what you want your monthly payment to be.

Meet with a lender to figure out how much you can spend, how much you’ll need for closing costs, how much you’ll need for a down payment, and what your total monthly payment is going to look like.

As humans, we always compare everything to the one that got away.

The last thing you want to do is look at homes before you’ve got your financing in order. The pre-approval process can take up to 72 hours, so if you fall in love with a home and have to wait for a pre-approval letter, you might lose the home during the waiting period. As humans, we always compare everything to the one that got away, so make sure you’re ready to go with a pre-approval letter.

If you have any questions about this topic, buying or selling a home, or any other real estate questions, please feel free to give me a call or send me an email. I look forward to hearing from you!

We’ll Help You Get the Best Loan Possible

If you’re out there looking to buy a home and want to get approved for a mortgage, reach out to your local Realtor first. As a local expert, Realtors like myself have access to lenders who can help you with a home purchase much better than a big bank can. 

It’s not necessarily true that larger institutions can serve your needs better. The big banks are like general practitioners of financing. They will be able to tell you what you need, but might not know all the options you have. Our lenders are more like specialists. They are masters of the trade and when an issues come up, they are better equipped to handle them. 

"With the larger banks, you’re just another number."

Larger institutions are quick to issue pre-qualifications. They get your name, credit score, and basic info. They don’t get any official documentation. That’s ultimately not good for you. A mortgage lender will take this same first step as a big bank, but they will take that extra step to collect documents ahead of time so it’s much less likely that you’ll default or not be able to afford your mortgage.

An additional benefit to working with one of our lenders is our relationship with them. With the larger banks, we’re just another number. We don’t necessarily get the same person on the phone each time so we can ask specific questions. With my preferred lending partners, I can call and ask them about your specific situation, and give them specific properties to run the numbers so you know what you are bringing to closing. You can go in with your eyes wide open and know what you’re getting into financially.

If you have any questions, give us a call or send us an email. We would love to hear from you.