First Time Home Buying Secrets - Searching and Negotiating
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Transcript:
The question I always ask is, “does this house feel like home?” And that usually comes at the point where the heads are nodding and the husband and wife are looking at it and they’re visibly ready to make that decision. And I ask, “but does this feel like home?” Because a lot of the time, it fits all the parameters, but it just doesn’t feel like home. I always ask that question and more importantly, I asked the wife that question if it’s a husband and wife. Because doing this for over 25 years and selling over 1000 homes, we know who makes the buying decision. The wife does. The guy goes to the garage, goes to the backyard, and looks at the media room. The wife goes to the kitchen, the master bath, and the master bedroom, and she’s usually 95 times out of 100 the one who makes the final decision as far as whether she’s going to live there or not. If you’re single then you don’t have to worry about answering that question.
Something else I want you to know about is the Search Properties button on my website. All the homes that are on there is the same information that is on the MLS. Every realtor has that information. It used to be that realtors would keep private that information about which homes are for sale. Well, with the Internet, all those homes are right there on the front of most realtors’ websites. You can see all the homes that are for sale in the MLS (Multiple Listings Service). You can even set up your own custom searches. In the interviews that we’ve done with buyers, they all want to have more control over their searches. They don’t want to have to depend on a realtor to help find their house for them. The can run the Internet, they know how to do it. But the one thing that you don’t get information on is the sold information. And that’s important because you might go out there and find a home that really works and fits with your needs, but you need to find out what the comparable sales are. What is the rest of the neighborhood doing? Alright, so does it feel like home?
Alright, we talk a lot about theory, but I wanted to throw this house at you to see what you think. It’s 2,200 square feet and it’s a listing I have in Leander. I just wanted to show you an example of what you can get USDA which means zero down if you want zero total move-in. It’s in Leander, right off of Crystal Falls Parkway, less than a mile from 183-A. It’s less than a mile from the new train station and less than a mile from the new HEB. This is a home that if you said, “I want to live in Leander” that I would take you to. Now check this out, it’s got Brazilian hardwood floors. They put $30,000 in upgrades and they only want $179,000 for it. Look at that granite countertop. Stainless steel appliances. These guys really did it up. There’s the kitchen. They did close to everything that you’d find in a million dollar house. Look at the tile flooring that they have in the eating area. You can go to my website and see more of this house, but it’s just an example of what you can get for under $180,000. There’s the family room, he works for Samsung, by the way, and that TV might just get thrown into the deal because he gets a really good deal on HDTVs from Samsung. Hardwood floors through out the entire downstairs. Even up the stairs. As you’re going up the stairs, here’s the game room that he uses as an office. Here’s the master bedroom and master bathroom. Granite countertops and sinks that you’d find in million dollar houses. He redid the shower and it’s amazing what he did. This closet impressed me when I went in there because everything was so neat and organized. There’s hardwood in the upstairs rooms too, even in this extra bedroom that he’s using as a home gym. Here’s the backyard with a nice tree. Oh, and by the way, thanks to Mother Nature, he’s got a new roof going on it this week because of our little storms we had out in Leander. And then finally a storage shed. So I just really wanted to take you through the homes and ask you the same questions as if you were really looking at it. Does it feel like home by the time you got through looking at it? So far it’s been on the market for a few months, but it’s a really nice property and you can find that on my website.
So if that was “home,” you’d get with me and I’d ask, “what do we want to offer for it?” A lot of times what I’ll do is call the other agent and find out what the situation is with the seller. By the way, broker-to-broker, we get more information than you calling the broker or the agent. There’s an unwritten telepathy that says we’re allowed to talk to the other agent and get certain information that a broker wouldn’t normally tell a homebuyer calling off a sign. I usually get more information. Some agents are really closed mouthed, but good agents that want to sell that property will give me information that I need. For instance, what’s the seller’s situation? What’s their timing? What else do I need to know? They’ll come from anywhere as far as “we haven’t had an offer on this house at all, bring me anything” to “we’ve had three offers go in and you better get your offer in now.” We weed through all that. And usually, brokers are more honest to other brokers than they are to somebody calling off a sign. So you’ll negotiate the agreement. You will never actually talk to the seller, or you shouldn’t. The brokers do all the talking. They’ll determine your terms and your agreement, which is a 13-page contract right now. You don’t want the seller’s agent or the builder’s agent filling out a 13-page agreement. Everything in there is going to cost you money, time, or terms. Usually timing and terms means 30 to 45 days on a normal resale purchase. It could be several months for a new home construction. It’s a little bit of a different process if you’re building. You’re going to put up a deposit called earnest money, which usually ranges from 0.5% to 1% of the sales price of the house. So for a $170,000 house, plan on somewhere between $700 and $1800. Earnest money is your deposit that goes towards your down payment that says you’re really interested in buying this house and you’re not just taking it off the market for fun. You’ll also have a deposit called option money which is a very small amount of money, like $150 and that’s your unrestricted right to back out of the contract, usually in the first 10 days of the contract. Your agreement will also determine who pays closing costs. And as Kenton and I have discussed for so many years, why not have the seller pay buyer’s closing costs? And we do that all the time. We love to see buyer’s come in with their down payment or no down payment and nothing more. Because if you finance your closing costs, it’s only $8 per $1000 that you borrow. So a lot of people think that they need $150,000, I need $5,000 and then another $5,000 in closing costs, which is a total of $10,000. No. We go to the seller and tell them we’ll give them $150,000 for it, but that they’re going to pay $5,000 in closing costs. And that basically cuts the amount of money that it takes to get into a house in half.