Ready to buy a home

If you’re in the market for a house, more than likely you’ve found some pretty good deals out there. But since real estate is local by definition, what may be a buyers’ market in Chicago or Detroit maybe just the opposite in Los Angeles or Miami. Finding a great deal will have a lot to do with what part of the country you’re in and where you want to live. But no matter what as Lady Gaga would say, you’ll still need your poker face and the ability to negotiate with some savvy buyers and sellers in order to create the best deal possible.

Bottom line is there’s no substitute for doing your home work. In order to walk away with a sweet deal you need to know some things about buying a home first. For example how much money can you afford to spend? What is the true value of the home and will major improvements be needed to repair it? How about the location, is it a desirable place to raise children if you have them? Is the municipal water well that feeds your neighborhood choke full of contaminants? What about the neighborhood, is there a local gang claiming the territory? These are some of the many considerations to think about and ponder before buying your castle.

Nevertheless there’s no denying that for buyers in Michigan for example “Now is the perfect time to purchase a home,” according to Stacie Miller, a young mom who did just that in the suburb of Highland, Michigan. “As buyers, my husband and I were in the driver’s seat because there’s more supply than demand here. In some areas we found sellers willing to wipe as much as 3% to 8% off the listing price. We used Zillow.com to help us search, it was helpful” says Stacie.

Founded in 2005, Zillow is a web site which features data on more than 92 million homes. It joins buyers and sellers by appraising property values and allowing sellers to post information such as recent home improvements and residential access to major roads and freeways. Buyers can then access and track such information online for free.

Do your homework

Web sites like Zillow, Redfin and Trulia can help you do the drudge work. These sites provide information such as how long a house has been on the market, previous sale prices, how much other houses have sold for in the area, even how many times the seller has lowered (or raised) the asking price.

Now after you’ve done your home work and found a place to call your own, check out the local school to make sure it’s safe for your children to attend if you have them. It’s ok to question neighbors about the area. It makes sense to know upfront if teenagers use the street for drag racing at night or if the community is active and noisy during the summer. You can also visit the local police department to obtain a criminal activity report. If there’ve been any break-ins lately or strange activity in the area the criminal activity report will inform you of it. 

After you’ve done your home work, found a place to call your own and the research is complete, it’s time to come up with the price you’re willing to pay. At this point you’re trying to negotiate the lowest price possible. Some key things to find out include how long the house has been on the market, the selling prices of similar houses in the neighborhood (commonly known as “comps”) and the reason the seller wants to move.

You can gain an edge in the negotiation by compiling a list of comparable houses that are selling for less than the one being offered. This is called trumping the sellers’ asking price. I recommend reading a book titled Negotiation Boot Camp written by Ed Brodow to learn some useful deal making tips.

Remember going into sales talks is a psychological war. Therefore you must arm yourself with information if you’re going to win. It helps to have an experienced realtor on your side that knows the market and has your best interest in heart. What you don’t want is someone whose only goal is a quick commission. Try finding a realtor through a personal reference like a friend or co-worker. Don’t hesitate to dump your realtor if he or she is too pushy or unhelpful.

Know when to walk away

Gone are the good ol’ days of being pre-qualified for a mortgage where any just about anyone with a pulse could get a high interest $700,000 loan to buy “la casa” on the hill. The subprime mortgage crisis forced lending institutions to rein in credit and heighten their loan standards so people with low credit scores would be denied a mortgage. Believe me that’s a good thing. Because for those who do qualify for a home loan, it’s not only a sign you’re a responsible borrower, but that home loan is a weapon in your arsenal when it comes time to negotiate.

In some areas homes have languished on the market for months, even years. A person waiting years to sell their home would love for you to hurry up and buy. A seller may be willing to cut the cost substantially if he believes you’re serious and can secure a loan. Show him/her that you can go “conventional” and put 20% maybe even 25% or more down, and the house could be yours by days end.

However don’t jump the gun too soon. The nitty gritty part where you throw out one price and the seller counters with another will soon come, however before it does, be sure you know what the house is worth. Know the amount you can afford to pay -- and hold firm to that price. Just like a stock, never fall in love with a home to the point where you’re willing to pay more than it’s worth. Be ready to walk away at the drop of a dime if the seller won’t budge. Remember in today’s’ housing market there are many great deals to be found.

“Me and my husband Rick were smart,” said Stacie. “Since we never tipped our hand to show how much we loved and wanted the house for sale, we were able to maintain an edge when it came time for negotiations. There were so many choices in Michigan.”

While it’s true many buyers can find wonderful deals on some beautiful homes, again it depends on the location. I know of someone from Los Angeles who saw a bidding war erupt on a San Fernando Valley home with 12 offers being in a single day. The home began its listing at $339,000 and closed around $420,000 a month later. That $81,000 mark-up was clearly a sellers dream.

Can't read my poker face

“I wanna hold em' like they do in Texas Plays. Fold 'em, let 'em hit me, raise it baby, stay with me...” In that marvelous song, our friend Lady Gaga doesn’t want to give away her hand at poker. Just like her and the person selling the home, you shouldn’t give away how much you can and are willing to spend on a home. If the seller thinks you’re loaded and can afford more than you’re offering, he or she may be less willing to give in on price.

Leave the bling and Armani suit in the closet – you’re not here to impress anyone. You want to enter the negotiation process in an inconspicuous manner. Curb your enthusiasm as part of your strategy. It’s better to come up with a list of 12 things about the house that give you reason to pause as opposed to 12 things you absolutely love about it. Now that list can be absolutely bogus. But the seller doesn’t know that.

To relocate, or not to relocate? That is the question

Here are a few more things that rank number one when considering your home. You need to know whether you and your family would enjoy a major metropolitan city or a medium-sized community. Is a smaller town a better fit? I know from my experiences living in Chicago and Detroit that long cold spells don’t work for me. Maybe you like when it rains frequently, or prefer a thick white blanket of snow in the winter.

I need to have lots of bright, sunny days where I can stroll along the beach while gazing at the magnificent Pacific Ocean. So California works perfectly for me. But for you maybe Anchorage, Alaska works best. There you’ll find more than 220 city parks, Almost 100 miles of paved bike trails and about 133 kilometers of ski trails all maintained by the Municipality of Anchorage. After a brisk day of dog-sledding or a refreshing round of golf you can dine at Sullivan's of Anchorage, one of the many four-star restaurants in the city. The next day you can set out for some cross-country skiing along the same trails used by the U.S. Olympic team.

If easy travel’s what you’re looking for consider moving to Chicago, Illinois. Chicago is a city with a beautiful and romantic skyline that sparkles at night. It has an elaborate system of expressways and public transportation that make getting around the Windy City a breeze. You can choose from taxis to buses, subways to elevated trains; all which make transportation convenient within the city and surrounding communities. Taking up residence in one of the trendy neighborhoods like Printers Row, South Loop, West Loop or New Millennium Park means being close to fine dining, theaters, nightclubs, sporting venues, galleries, museums, and… The Magnificent Mile.

If your idea of culture is being able to taste, touch, and experience things from all over the world, Boston, Massachusetts is where you want to be. Boston is a place where the cool and chic blends with old school charm. It’s a place where gleaming skyscrapers shadow manicured parks and vibrant, diverse neighborhoods are footsteps away from community centers, libraries and schools that rank number one in the country. With the city allowing visitors of the Museum of Fine Arts a free entry on Wednesday nights, it’s no surprise why Boston’s such a great place for children to experience the finer things in life.

Congratulations on closing the deal

Remember that despite many great opportunities in today’s housing market there’s no substitute for detailed research before acquiring a home. Make sure you know the history and true value of the property before buying it. Do research about the community and read the neighborhood criminal activity report to ensure it’s a safe area. And just like a great card player, know when to hold ‘em, know when to fold ‘em, and practice your poker face.