|Seb Frey the Real Estate Guy||
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The Site for Santa Cruz Real Estate
Tips For Buying and Selling Residential Property
In the market to buy or sell property in Santa Cruz county? Here are some tips I think you will find useful.
There are two sections of this article:
Choose a Lender: Ask the people you know for a recommendation of a good mortgage broker or lender. Consider asking your co-workers, friends, people at your place of worship - people you trust. I am also able to put you in touch with several excellent lenders, and will be happy to provide you with their contact information.
Be Pre-Approved: the strongest offers from buyers are those that are all-cash or with pre-approved financing. The stronger the offer, the more likely it is that it will be accepted. Note that pre-approved is different from, and much superior than, being pre-qualified.
Family ties: ask your family for help. It has always been common for first-time buyers to receive some kind of financial help from family members. With today's high property prices, it happens all the time. Consider asking family members to provide a gift, which can be used for part or all of a down payment. Perhaps they might be a co-signer on the loan?
Minimize large transactions: starting as early as possible before you apply for a loan, watch your purchases. Do not make any large purchases until escrow has closed on the new property.
Educate yourself: become knowledgeable about the properties for sale on the market that meet your needs. One of the best ways to do this is to work with a Realtor®. Further, read local newspapers and real estate magazines. The World Wide Web also provides voluminous information on real estate. You can find links to many such sites from my links page.
Buy what you can afford: make sure you know how much the property is really going to cost you. One useful tool for figuring this out is the Buyer's Net Sheet. You can download a Buyer's Net Sheet Microsoft Excel® template from this web site.
Check your credit report: obtain your credit report from a lender. Check it for accuracy and have any disputed items cleaned up - as soon as possible.
Learn the Loan Options: a mortgage broker can present you with dozens of programs. It is a good idea to have a working knowledge of the various loan options (fixed, adjustable, negative amortization, points, first time buyer programs, VA loans) to make an informed decision.
Ask the Sellers for a help: with property prices what they are, buyers often have difficulty qualifying for these jumbo loans. Sellers know this, and many are in a position to carry a note on the property. Additionally, the Seller can often be prevailed upon to help pay the buyer's closing costs - provided the price is fair and reasonable.
Close Escrow at the end of the month: the Residential Purchase Agreement can specify the number of days until, or a specific day upon which, Escrow will close. Choose a date close to the end of the month. This will reduce or eliminate your "prepaid interest" amount, lowering your closing costs.
Set the price carefully: this is the most important thing you can to do ensure a rapid sale of your property. See my article on pricing it right.
Inspection and Home Warranty: it's a great idea to have a home inspection (and a termite inspection) done before the home is listed. Provide a Home Warranty policy, which offers a buyer some protection against unexpected repairs.
Put on the buyer's hat: what does a buyer want to see the first time he pulls up to the curb, or opens the front door? The buyer wants a sharp, clean looking property that is crying out to be seen. Remove excess clutter and bric-a-brac. Have the property look its best!
Offer Allowances: often times you can swing a deal by offering a carpet or painting allowance.
Offer financial help: you may be in a position (for example, if you have a lot of equity) to pay closing costs, or even offer a loan to the buyer. Offering cash back at closing, to provide money for several mortgage payments, is also an option.
Be flexible: about the selling price, terms, move-out date, etc.
Avoid Crowd Scenes: Potential buyers often feel like intruders when they enter a home filled with people. Rather than giving your house the attention it deserves, they're likely to hurry through. Keep the company present to a minimum.
Don't break the bank: Pricey items such as a new roof may be big hits with buyers, but rarely does the buying price end up covering the payout for such costly home improvements. When possible, stick with the simpler (and less expensive) options rather than major remodeling.
Read my Home Presentation Guide: Click here to view it.
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