Thursday, June 25, 2009

Poor Choices Can Blow a Deal

Buying a home is a personal choice, but it’s also a significant business decision - and buyers are wise to remember this. That is why it is critical to make good choices when selecting the key service providers involved in the transaction – the lender/mortgage loan officer, real estate agent, and home inspector. A poor choice in any of these three service areas can actually blow a deal for the buyer.

Timeliness, organization, effective communication, knowledge, and accessibility are key traits to seek in each of these professionals. If you were responsible for the hiring decisions at your company, which candidates would you bring back for a second interview? Consider the fact that you are actually the CEO of your own life, and your hiring decisions could impact the quality of your life for many years to come.

No purchase can hope to take place without the necessary funds. Make sure you have chosen a reputable lender, and not some institution that no one has ever heard of. Sellers are very wary these days when it comes to lenders, and rightly so. There are simply too many devastating stories of buyers and sellers sitting across the closing table from one another for hours, waiting for the funds to arrive via wire. Countless transactions have been delayed by days or weeks when one lender cannot close the deal and a new lender must be found to eventually save the day. Imagine that scenario as a first-time buyer when your apartment has new tenants arriving, and you’re now without a place to live - with all of your belongings loaded on a rental truck.

In addition to selecting a credible lender, it’s vital to receive a pre-approval letter. A pre-qualification letter is meaningless to sellers. They want to know that a lender has actually pre-approved you for financing. Offers with pre-approvals will likely be given much stronger consideration, and some sellers won’t even look at an offer without a pre-approval letter.

Be sure to receive a GFE (Good Faith Estimate) from your lender for all fees associated with the lender, loan program, and closing costs. You will want to have this information handy as you negotiate an Offer to Purchase. You must be aware of the money you will need to bring with you to closing, in the event that a seller does not agree to pay your closing costs, and you still want to proceed with the offer.

Dates and deadlines in an Offer to Purchase are critical, where time is often of the essence. The professionals you choose must be accessible, organized, and timely in the delivery of their services. Missing deadlines or waiting until the last minute to satisfy contingencies can have dire consequences. Remember that an Offer to Purchase is a legally binding document, and not to be taken lightly.

It is not your job to know the ins and outs of loan programs and financing options. It is not your job to know the laws that govern real estate transactions in your state. Nor is it your job to know if the property you wish to purchase is safe, structurally sound, or worth its listing price. It is your job to select the professionals who do carry those responsibilities and the proper credentials. Take time to research your options. Ask friends, family members, and trusted colleagues for referrals. Attend open houses or research real estate companies and agents online (see my post, “All Agents are NOT Created Equal.”)

Do your best to make wise decisions, but don’t beat yourself up if you wind up making a poor choice. A worse choice is to sit back and do nothing once you recognize the problem. Always remember that if you made the hiring decision, then you can also make the firing decision. You can choose a different lender or loan officer. Due to complexities associated with real estate law, you may need to take an extra step with switching agents if:
1. You signed a Buyer Agency Agreement,
2. You’re in the middle of a transaction, or
3. You plan to write an offer on a property that was shown to you by that agent.
If any of these situations apply to you, contact the agent’s broker, who will reassign and oversee another agent who will better meet your needs.

Saturday, June 13, 2009

Relocating? Pack it Up!

With the economy being what it is today, competition for employment is fierce. More people are determining they’re willing to move wherever they can find a decent job and attempt to regain some stability.

If the new employer offers a relocation package, it’s typical that moving expenses are paid, but the movers only insure what they themselves pack. For homeowners who now need to sell their homes to relocate, they may be hesitant to box up anything themselves. This may be fine for décor and wardrobe minimalists, but few homeowners fall into that category.

So, if this scenario applies to you, congratulations on your new opportunity! Now go get some boxes.

It’s wonderful that someone else is going to do all of the packing and moving for you, but you likely still have some work to do to get your home photo-perfect and show-ready. If you don’t take the time to prepare your home for public viewing, you could be cheating yourself out of thousands of dollars of sale proceeds. It’s also unfair to expect your real estate agent to put all sorts of time and money into marketing efforts when you haven’t done your job as homeowner first.

Take a good look around your home, paying particular attention to areas that attract clutter – and that could be anywhere. Begin to edit furnishings, décor, collections, pantry items, and overstuffed cabinets and closets. Be careful not to over-edit – you don’t want to pack up items you’ll need to have accessible until you move, and you don’t want your home to seem cold or completely devoid of personality. You just want buyers to see the great space they’ll be buying, and that’s easier to see with fewer items to distract them.

Now, there’s no need to pay for boxes, since the movers will surely come with their own packing materials. Think back to your years of apartment dwelling – and moving. Call grocery stores and office supply stores to find out when they receive their shipments, and tell them you’d like to take some boxes off their hands. You just need to be timely in your pick-up, or else they’ll have broken down the boxes already.

Since the movers will need to properly pack the items you’re temporarily placing in mismatched boxes, you don’t need to be overly careful with your packing techniques. Begin with items that aren’t fragile – clothing, seasonal shoes/boots/coats, towels, blankets, linens, metal baking pans and cookware that aren’t often used, games, books, DVDs, CDs, toys, etc. Extra furniture might be shuffled to a less furnished room or storage space.

When it comes to breakables, consider moving them to another space that you’ve managed to empty of non-breakables – like a cabinet, closet, or even inside a piece of furniture that buyers won’t look in because it’s your personal property. You get the idea.

In this housing market, you can’t leave success to chance – and you can’t place all of the responsibility on the shoulders of your real estate agent. So, get crackin’ and get packin’!