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East Bay Real Estate Focus

Providing Definitive Information for the East Bay Area

By Carl Medford | Agent in Fremont, CA

How NOT To Buy A House – 6 Important Rules For First-Time Buyers

I love watching first-time buyers as they go from house to house. Many of them don’t have to mouth a single word about whether or not they like a particular property – they’re usually telegraphing everything they’re thinking. And not just to me. Anyone with eyes to see can discern their thoughts. Especially sellers.

 

And that’s not good. 

 

I council first-time buyers to be aware of six fundamental rules. You won’t die if you violate any of these, but you may lose your ability to get the best price and terms for your new home. In addition to ending up with an abode to call your own, you want be confident you got the absolute best deal possible – especially in the current market.

 

1.   DO NOT Get Emotionally Attached To Any Specific Property.

 

Savvy sellers are trying to engage your emotions. The minute your emotions get involved, you’ve lost your neutral negotiating position. And neutral is where you have to stay to be objective. Remember: this is probably the largest investment you will be making this year. You wouldn’t dream of buying stocks or bonds because their prospectus comes in cute colors – don’t buy a house that way either.

 

Keep in mind another simple fact. You’ve managed to successfully live your life to this point without any specific house. If the seller of a particular home won’t work with you to negotiate a fair price, you WILL go on living. Believe me, there are LOTS of other houses out there right now.

2.   DO NOT Buy Based On Feelings.

 

When I have my preliminary meeting with first-time buyers, we compile a list of criteria that are important to them. Based on those criteria, I send them profiles that match. I don’t know how many times I’ve been given a set of criteria, only to have the buyers select a home that doesn’t even come close to the list. Later I hear them say things like, “What were we thinking?!” Good question. More often that not, you weren’t (thinking). You were feeling.

 

Write down your needs, wants and desires. Prioritize, and then stick to the plan. And read #1 above again.

 

3.   DO NOT Telegraph Any Emotions To A Seller Or A Listing Agent.

 

The moment the other side sees that you’re interested, or even worse, emotionally attached to the home, you’ve lost any edge you may have had. I’ve actually seen buyers walk into a home and, with the sellers or their agent present, start talking loudly about how they “love” the home. They’ve even told the homeowners that this is their “dream house” and they can’t live with it. At that point, the sellers can start packing. And counting their windfall.

 

Once you’ve given out your thoughts or feelings for a specific property, there is NO way to dig yourself out of the hole you’ve created. You WILL NOT be able to negotiate a bargain. You may get a decent price, but the moment a seller or their agent knows you’ll die without their house, poke yourself with a fork, cause you’re done.


4.   DO NOT Chose Only ONE Property That You’d Be Willing To Buy.

 

Remember what you are buying. A domicile. A pad. Digs. A place to park you and your stuff when you’re not out wrestling with dragons in the big, wide world. You are NOT buying the fulfillment of all your dreams and passions. That happens AFTER your kids are gone.

 

Figure out WHY you are buying (see #2 above). You may be buying a home that will be a good place for you to start investing in real estate. The property you are purchasing may end up housing one or two children a few years down the road. Commute distance or proximity to public transportation may be key. To be honest, there are usually a number of properties that will work. So don’t put all your eggs into one basket – pick three homes that will “work” and prioritize them. Write an offer on the one you like most. Instruct your realtor to tell the other side that this is your first option, but that you do have others waiting in the wings. This lets sellers know that you are negotiating from a neutral position.

 

5.   DO NOT Look Until You Have Been Pre-Approved.

 

Two reasons here. First, you’ll never know your financial parameters until you’ve met with your lender. So DON’T EVEN START LOOKING until you’ve done your homework. You’ll probably fall in love with homes outside your financial boundaries. This can lead to HUGE temptations and problems down the road.

 

Second, when you do find a home on which you wish to write an offer, you’ll need to include a pre-approval letter. If you’re buying an REO, banks often want to see a copy of your FICO scores as well. Have everything ready and in your Realtor’s hands so they can act quickly. Nice homes that are properly priced have a habit of disappearing quickly, even in a down market.

 

6.   DO NOT Let Your Realtor Push You Into Buying A Specific Home.

 

Smart buyer’s agents know that it’s not their job to sell you a home. Instead, their responsibility is to facilitate the sale of the property YOU choose. They shouldn’t pressure you to buy a home after you’ve only seen a few. After all, YOU will know when you’ve found a property that works for you. Your agent should also give you objective advice about the market based on real data. They shouldn’t be giving you selective factoids hoping to force you into a quick choice so they can move on to their next client. Feel like you’re getting pushed? You might need to choose another Realtor that’s a better fit for you.

 

If you’re following the rules above and you find a home you like, you won’t need to hesitate. Have your Realtor run a comprehensive CMA, discuss the offer strategy you want to utilize and then go for it!

 

If you get the property, congratulations! If not, go on to number two. If you’ve done your homework, it will be a place you can call …

 

Home.

Comments

By Meredith,  Thu Feb 12 2009, 15:35
But that's the one I want!!! Gimme gimmie gimmie!!!!!
...................yes, it leads to disapointment, and skews your ability to appreciate and evaluate other properties. Nothing seems to measure up to "the one that got away". In reality if the one you didn't get was out there, there are bound to be others just as good. So get over it and go find and be ready for the next opportunity!
By Carl Medford,  Thu Feb 12 2009, 15:49
And MAKE SURE you don't say, "Gimme, Gimme" when the seller can hear you!!
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