As a buyer you will have control over important decisions that will have to be made during the buying process. But first you’ll need to know what’s important, and why.

We’ll be addressing those issues shortly. Then it will be your job (and it won’t always be easy) is to exercise disciplined decision making based on what we will discuss here along with the guidance of your real estate professional.

Let’s address five key aspects of the buying process that can help insure the best possible outcome for you.

1. Raise credit - lower monthly mortgage payments
   
2. Get mortgage pre-approval
   
3. Choose a real estate agent or broker
4. Sell before you buy
5. Negotiate the home purchase price
   

1) “Save” on mortgage payments by improving your credit score

The best way to make sure you’re monthly mortgage payments are as low as they can be is to check your credit scores as far in advance of buying as possible – whether that’s months or years.

Any errors you can correct in your report, or negative issues you can address (i.e. how much credit debt you have) can help raise your credit scores and decrease the amount of interest lenders will demand to finance your purchase.

Even a small decrease in the interest you pay on your loan can add up to significant savings. For example, by qualifying to pay one-eighth of one per cent less to finance $300,000 you can save about $30 a month, $300 a year, and thousands over the life of the loan.

Websites like MyFico.com can provide your credit scores, tell you specifically how to improve your scores, and provide regular updates on your progress.

2) Establish your buying power by securing pre-approval

It’s important to know exactly how much financing you can qualify for before you begin your home search in earnest. And the way to do that is to ask a local mortgage broker or banker obtain a letter stating that your finances have been examined and that you are pre-approved for a certain amount of financing. Here’s why this is an important step that works to your advantage:

First, confirming your buying power enables you target what you can spend before you start looking.

And second, you will be asked to provide evidence of your ability to finance a home when you make your offer to purchase. Having the letter ready signals the seller that you are a ready, willing, and able buyer.

Finally, the process of pre-approval accelerates the amount of time it will take to process a formal loan application once your offer has been accepted which, in turn, provides additional confidence to the seller.  back to top

3) Choose a professional real estate agent or broker - let us help!

The first, and most important, decision you will make is the real estate professionals you choose to help you.

Real estate transactions are like heat-seeking missiles in their uncanny ability to target a weakness in the experience of an agent/attorney support team.

That’s why working with the  best real estate professionals is like taking out an insurance policy on having the most satisfying buying experience possible (with the least amount of stress).

Unfortunately, poor decisions regarding choices people make about real estate professionals are one of the most common, and damaging, mistakes consumers make. That’s because the reason you hire these people in the first place is to help you make good decisions!

So take a business-like approach to choosing your service professionals. Otherwise, you’re asking trouble in today’s unforgiving market place. Resist the urge to cut corners and simply hire a friend, family member, or someone you’ve been referred to without comparing their capabilities against others you can find with a little time and effort.

One way to get a leg up on the process is take advantage of free referrals from Tough Love to top-tier real estate professionals throughout Fairfield County who have been pre-screened and meet our standards of service.

Your real estate agent is your primary contact, advisor, and service provider in your home buying process. So source your agent first on the premise that “birds of feather flock together” because the best agents almost always work with the best attorneys and mortgage brokers.

Keep the following subjects in mind when meet with your agent candidates:

Without trust all other considerations are irrelevant. By virtue of their licensing and mandatory adherence to a code of ethics, realtors have fiduciary responsibilities protect confidential client information and to act in their clients' best interests.

Ask your agent candidates to discuss their ethical responsibilities to you. And make it clear that their adherence to this code is important to you.

Good questions for agent/broker candidates include:

• Is real estate a full-time or part-time profession for them?

• What is that your candidate likes most about the real estate business?

• Does he/she work mostly with buyers or sellers?

• How many years of experience do they have and how many transactions have they handled.

• Has additional training or special designations has your candidate received that adds to their service capabilities?

• What’s market activity like in the community(s) in which you are interested in buying?

• Pay attention to your candidate’s listening skills, and how well they communicate with you.

• Find out what they feel is their most important duty to you and their philosophy of service. This will help you decide if value systems correspond with your own  back to top

4) Sell before you buy

As a general rule, you are considered a “weak” buyer if you have to sell a home in order to buy one. For every seller in today’s market motivated enough to accept a Hubbard Clause (a contract contingency stating the buyer must sell his or her home before purchasing the sellers’) most sellers won’t tie up the sale of their property waiting a buyer to sell theirs.

Sellers who will consider a Hubbard Clause will often be advised by their realtors to require that the buyer has a limited period of time to sell and, for example, that the sellers home remains on the market for sale with the buyer having the right of first refusal if another offer to buy is tendered.

Another option for buyers who have enough equity in their current homes is to use a home equity line of credit as a “bridge loan” that enables them to purchase one home while owning another. Your mortgage broker can work with you to see if that is a sensible option, or not.  back to top

5) Negotiating the purchase - how much are you willing to pay?

2009 may be the best buyers’ market for years to come. Interest rates will probably be lower than anytime in coming years. And, there are motivated sellers willing to negotiate purchase prices that make handsome appreciations in value possible over the next few years.

Fairfield county real estate prices have not suffered the large double-digit decreases that are prevalent throughout much of the rest of the country. All but three of the twenty-three Fairfield county communities saw only single digit declines in median selling prices in 2008 compared to the previous year.

For you, the buyer, it means that your expectations about negotiating deeply discounted purchase price are not a foregone conclusion.

Keep in mind that any homes that catch your attention based on location, condition, asking price, etc., will also catch the attention of other buyers.

Which means that you and your agent/broker will want to be careful not to overplay your “buyers’ hand” when it comes to considering low-ball offers that may open the door for another buyer to beat you to the prize.

Once you’ve found the right house, decide at the outset of your negotiation how much you will be willing to pay when push comes to shove before you’ll walk away from the house. Do you like it enough, for example, to pay full price, or 95% of asking price, etc? Listen carefully to the advice of your local realtor and you’ll be prepared to make a good decision.

One of the ways to secure you best deal is to make the terms of your offer as appealing as possible to the seller. For example, your willingness to take possession in 30 days may be an irresistible “carrot” to a seller who wants to cut overhead expenses as quickly as possible and move on.

The amount of cash involved in the purchase can make a difference too, especially in those circumstances where more than one buyer is bidding on the home (yes, it still happens).

If you were the seller, would you feel more comfortable about the buyer’s odds of “performing” if thirty per cent of the purchase price was paid for in cash versus another buyer looking to obtain financing with only ten per cent cash down?  back to top