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What to do before making an offer

Published: Oct 14, 2009

You've found a home you like, and you're ready to put in an offer to make it yours. But before you take that step, there are lots of things to cross off your to-do list. To avoid running into problems with your purchase and getting buyer's remorse, complete these tasks before signing that purchase contract:

  1. Research the market

    In a hot market -- where homes sell rapidly and buyers clamor to purchase homes (a "seller's market") -- you have less pull as a buyer than you have in a cool housing market, where there's a large inventory of homes for sale (a "buyer's market).

    So, you'll want to know whether the local market you're looking to buy in is a cool or a hot one.

    You can research your target market's temperature by looking up the ZIP code's market stats and trends on Trulia. This information will show if prices are headed up or down, if the number of home sales are increasing or decreasing and what the average listing price and median sales prices are. The more information you have, the better you'll be at putting together an offer and the more leverage you'll have at the bargaining table.

  2. Cruise comparables

    Use Trulia to pull up data on nearby recently sold homes that are most like the one you're considering. (The homes should have about the same number of bedrooms and baths as your target house, and be in relatively the same condition.) These homes -- called comparables -- will give you an idea of what buyers may be willing to pay for the home you like -- and how much you may want to offer, depending on how recently these homes were sold and whether there have been significant market changes since then.

    You should also take a look at the asking prices of local houses for sale that are most like your target home and compare how those prices stack up against the listing price of your target house.

  3. Hit the pavement

    Trulia has made the job of finding comparables easy, but be sure to check out comparable homes in person to get a true comparison of how these homes rate against yours. Stats and figures tell a lot about a home, but they can't fully express how a home looks and feels.

  4. Get the 411

    Pull up the property on Trulia and look up when the seller purchased it and for how much. A seller who purchased a home many years ago at a comparably low price may be more willing to negotiate on price than one who bought the house recently at a relatively high price.

  5. Check the clock

    In real-estate lingo, the amount of time a home has been for sale is called "days on market" (or DOM). You can get a feel for this by looking up how long the home's listing has been on Trulia or work with a real estate agent to find out how long the property has been for sale.

    The longer a home has been on the market, the more anxious a seller may be to sell. Also, a homeowner who's just listed his house for sale is less likely to accept a bid below asking price than an owner who's been waiting months for a buyer.

  6. Inspect

    Look beyond the home's recently painted interior and nicely landscaped yard to determine the true condition of the property. If you're not handy yourself, bring along a friend or family member who could easily spot expensive and troublesome problems like leaky roofs, cracking foundations and major termite damage.

  7. Test out the commute

    Even if the home turns out to be a gem on further inspection, it may not seem like one if the drive to and from your job to your new home is a bear. Test out the morning and evening commutes to see just how bad -- or good -- the drive is.

  8. Explore the neighborhood

    A house doesn't exist in a vacuum -- it sits in a neighborhood full of neighbors, noises, even smells. Get to know the home's surroundings to determine whether it's a good fit for you. It's best to visit the neighborhood at different hours and different days, because a neighborhood that's quiet by day might be hopping at night (or vice versa).

  9. Get a second (or a third) opinion

    Sometimes love is blind, and a house that has you at first sight could turn out to be everything you've wished for (or everything you'd never wish for). Have a trusted friend or family member look at the home to get an objective opinion.

  10. Secure financing

    Take a serious look at your finances and determine how much you can afford to spend on a home. Also calculate how much you have for closing costs and a down payment. If you'll need a home loan, investigate your options both online and in person with a lender and get pre-approved (with a pre-approval letter from the lender) for a loan. A pre-approval means that the lender thinks you'll qualify for a given loan amount.

    Having that pre-approval (which points to your ability to purchase the home) will put you in better position with the seller should you decide you do want to buy that home.

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