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5 Ways to Get The Most Out of an Open House

5 Ways to Get The Most Out of an Open House
5 Ways to Get The Most Out of an Open House

5 Ways to Get The Most Out of an Open House

Open houses are a great source of information about the property, neighborhood and local markets. Nearly half of real-estate buyers go to one. Here are some tips regarding how to get the best data from an open house:

1. Look Past Window-Dressing. A full 94 percent of sellers do some “staging,” such as repainting or bringing in new furniture, says Coldwell Banker. “You can be so wowed by staging that you overlook important things,” says San Jose Realtor Carl San Miguel. To focus on what matters, lift rugs to look at floors, ask the agent to turn off music so you can listen for nearby noise, and beware of any smells masked by candles. Also request a disclosure sheet, which lists known structural issues.

2. You Can Learn a Lot From the Crowd. Nearly half of buyers visit open houses, says the National Association of Realtors, so pay attention to your fellow shoppers’ comments; they may have insight into how this home stacks up. Locals often pop in, too, so if someone sounds like a neighbor, ask about the area. To get a feel for demand, visit in the last hour and peek at the sign-in sheet. A full sheet could mean the home will sell quickly, says Paul Reid, a California-based agent.

3. It’s Your Chance to Test-Drive the Place. Visiting a home in person allows you to pick up on details you won’t see in the listing, such as the strength of the water pressure and how much you could actually cram in the closets. What buyers often forget, though, is to explore the neighborhood as well, says Dallas agent Mary Beth Harrison. Get a sense of the area by checking out surrounding streets and driving home using a different route.

4. The Agent May Be Scouting You. Listing agents will often tap a colleague to run an open house, so your host may be fishing for buyers to represent. If you’re in the market for an agent, this can be a chance to meet pros and see what they’re like on the job. Not interested? Say so upfront to fend off any confusion, says Harrison. Shoppers who already have a buyer’s agent should write his contact information on the sign-in sheet so he can handle any follow-up calls or emails on their behalf.

5. Gathering Info for the Seller. When a listing agent is hosting, pepper her with questions. Ask whether there have been any upgrades to the property, if she’s gotten any offers, and when and why the sellers are moving. (You may get a vague reply on that last one). Keep mum on your budget, feelings about the home, and anything else that might give the seller a leg up in negotiations. “Don’t assume the agent is there to help you out,” says Chicago agent Fran Bailey.

Source: CNN/Money

7 Steps to Being the Most Attractive Homebuyer

7 Steps to Being the Most Attractive Homebuyer
7 Steps to Being the Most Attractive Homebuyer

7 Steps to Being the Most Attractive Homebuyer

When you know what you can afford and are preapproved, you won’t be shopping outside of your price range, says Corbett. “It makes you a much stronger buyer when you can turn in that preapproval letter with your offer.”

As home prices continue to recover and interest rates remain low, some houses are receiving multiple offers and to win the bid, buyers need to stand out from the crowd. According to the National Association of Realtors, houses sold in 71 days in January, down from 99 days a year ago.

Since markets are moving fast, experts recommend sellers have their loan pre-approved and down payment ready before starting their search. “The market is changing,” says Cara Ameer, broker associate and Realtor at Coldwell Banker Vanguard Realty based in Ponte Vedra Beach, Fla. “Inventory is low and demand is high—a buyer needs to know exactly what their parameters are.”

Multiple bids are becoming the norm, so be ready to compete and do your homework to seal the deal. The longer the negotiations, the more chance you could lose out to someone else who made a better offer, says Ameer. Be reasonable without being difficult because until an offer is signed, sealed and delivered, other buyers can bid on the property.

While you have to compete in the current market, maintain your budget. “You don’t want to end up paying more for the house than it’s worth,” says Daren Blomquist, vice president at RealtyTrac.

Experts warn against cutting corners like skipping the inspection or engaging in a bidding war. You don’t want to unduly stretch yourself just to get into a property,” says Blomquist.

To help you become a homeowner in this competitive market, experts recommend the following tips for being the most attractive:

Plan Ahead “You have to plan four months before you’re going to buy,” says Michael Corbett, Trulia’s real estate expert. Check your credit for accuracy and avoid making any big purchases or taking on any big debt during this time.

“[Debt] brings down your credit score and increases your debt-to-income [ratio] which are two critical things banks look at when qualifying and preapproving you for a loan,” says Corbett.

If your debt-to-income ratio is too high, experts recommend paying down as much debt as you can to lower this ratio.

Set Your Home Price “Don’t look at a $300,000 home if all you can afford is $250,000,” says Ameer. Less supply on the market increases the likelihood for multiple offers, and you won’t be able to compete. “If properties are selling at 95% of asking price, don’t think you’ll get a deal at 85% of asking price,” she says.

If you do spot a great deal on a house, don’t wait days to make an offer, warns Corbett. Since time isn’t on your side, learn how to spot a great deal by researching an area’s home prices.

“Do a little due diligence and go to open houses—do your homework,” says Corbett. Being educated will help you negotiate and could prevent you from paying more for a house than it’s actually worth because you’re emotionally involved.

Know That Cash Is King The more cash you have, the more appealing you are as a buyer. Putting 20% or more down makes you look more financially stable and gives sellers comfort that you’ll qualify for a mortgage, says Corbett.

Cash can cover a multitude of problems when you make an offer, whether it’s difficulty with the mortgage process or a lower-than-expected appraisal. “A buyer can contribute more cash to cover the difference between the appraisal and offer price,” says Blomquist.

If your appraisal is low, don’t expect the appraiser to come up in value, says Ameer. “Appraisers are under scrutiny with the banks and they have to justify everything they do.” They’re required to follow Uniform Standards of Professional Appraisal Practice (USPAP) guidelines, as well as lender guidelines.

Appraisers use surrounding properties for comps, says Ameer, and if there are only foreclosures, that’s a bad hand to be dealt. You can always review the appraisal for discrepancies and suggest different comps but don’t expect the value to change.

Get Preapproved Before Your Search Getting prequalified for a mortgage gives a ballpark for what you can afford to buy and will streamline your search process.

If you’re financing your house with a mortgage, have a pre-approval letter with you and if you’re paying cash, have proof of funds that shows you’re good for it.

Getting preapproved will also help you to compete with an all cash buyer, says Walter Molony, spokesperson for the National Association of Realtors.

Limit Your Contingencies Experts suggest having as few contingencies as possible to be an alluring buyer. “Don’t overcomplicate your offer to the seller,” says Ameer. Certain contingencies based on your ability to get a mortgage, the appraisal and home inspection are standard, but piling on more could make the seller less inclined to work with your offer.

Experts advise making an offer based on a satisfactory home inspection. “It gives you the opportunity to walk away if you find in an inspection that there are too many problems with the house,” says Corbett.

Making your offer contingent on you selling your house first will make you a less appealing buyer. If you need to sell your house before buying a new one, then sell your home first and rent or move in with family or friends while you look for your new home, says Blomquist. “As a seller, you’ll sell that home quickly. Then as a buyer, you’re much more appealing than a buyer contingent on a sale.”

Add A Personal Touch Corbett suggests sending a letter to explain why you want to buy that house. “You become a person who really loves and appreciates the home instead of just a number,” says Corbett. Sending a letter is just one extra little thing that will help level the playing field.

Be Flexible With Closing Dates “Let the seller know that you would be flexible on the closing timeline,” says Corbett. Find out when the seller would ideally like to close on the house and see if you can match it.

Source: Fox Business