At Least One Bullseye: “Hire a Good Realtor”
Money Magazine is out with its 2016 Spring Real Estate Guide, subtitled “The 35 Best Moves for Buyers, Sellers, and Owners Now.”
Do the authors know what they’re talking about?
Here’s the magazine’s advice for first-time Buyers (“Starting Out”), followed by my running commentary in italics:
Money Magazine: “Get pre-approved. This means a mortgage lender has checked your credit and verified your income and assets; it gives you an edge with some Sellers looking for a quick, smooth deal.”
Ross Kaplan: “Agree. In fact, I’d go even further: no Buyer can expect to launch an offer without a Pre-Approval Letter — ideally, from a name-brand lender with a local contact. True, lenders give out Pre-Approval Letters promiscuously, and they’re non-binding. But, precisely because they’re so easy to obtain, not securing one suggests the Buyer is in dire financial straits.”
Money Magazine: “Make unsolicited offers. To avoid going head-to-head with more established Buyers, look for homes not yet on the market.”
Ross Kaplan: “Bad idea. Making such overtures invariably elicits a response from homeowners who aren’t particularly motivated; whose homes aren’t market-ready (or even close); and who’ll only consider parting with their home for a substantial premium over fair market value.
Buyers (and Buyers’ agents) should save themselves the aggravation. Instead, proprietary tools like Edina Realty’s “Network One” let motivated Buyers find Sellers before their homes are officially listed on MLS (note: such homes are already priced, and typically just awaiting the completion of last-minute projects).”
See, “Have a House/Need a House.”
Money Magazine: “The one edge you have over more well-heeled Buyers is your ability to delay move-in, so take full advantage. Have your agent get in touch with the Seller’s agent to find out exactly what they need, whether it’s a longer closing window or an option to rent back.”
Ross Kaplan: “Delayed closing (up to a point) . . . fine; rent-back agreement . . . big mistake.
As I tell my Buyer clients: “until closing, you have the money and the Seller has the house. After closing with a rent-back, the Seller has the money and the house.”
Further complicating matters: such agreements are time-consuming to negotiate, requiring the parties to address not just rent and security deposit but responsibility for utilities, insurance, and property taxes.
Most critical of all: the lease term — and consequences for overstaying same.
That’s key because the same circumstances that motivate Sellers to rent back, post-closing (building new construction, finding another home, etc.) have a funny way of running into delays.”
Money Magazine: “Find a true advocate. For a generation that uses apps for most transactions, the need for human help may be surprising, but a good Buyer’s agent can help you find listings and guide you through financing, inspections, and price negotiations.”
Ross Kaplan: “Hard to argue with that — the article’s very best advice!” 🙂
Remodeling Advice
Also in the Magazine: advice for would-be home remodelers, accompanied by a chart showing project “winners” and “losers.”
Example: insulating an attic more than pays for itself (117% return), while adding a wood deck is a mistake (75%).
Correct?
Ummm . . . it all depends.
I can easily imagine adding the right deck to the right house, with the right back yard returning 2x or even 3x (!) the investment.
Meanwhile, it’s hard to imagine frugal Midwesterners popping $57,411 for an “upscale Bathroom remodel” (Yikes!).
See also, ““Guaranteed’ Pre-Approval Letters“; “The 2nd Most Important Date in a Home Sale“; and “Pre-Approval Letters & Written Statements.”
