Taking the stress out of home buying

house

A first-time homebuyer told me that signing the purchase agreement just about made her sick with stress. She asked if that is normal, I had to tell her it is normal to feel stress while signing a purchase agreement. Home purchases should not be taken lightly. Often the purchase of a home is the largest purchase we ever make.

Some real estate agents advertise that they can take the stress out of home buying. It isn’t even possible to know ahead of time what is going to cause the most stress or what the sellers might decide to do that will make the process extra stressful. There isn’t any way to take all of the stress out of the process. Some people are easily stressed out and others are not.

Here are some of the main sources of first time homebuyer stress:

  1. Doing something for the first time that involves a large sum of money.
  2. Never feeling in charge of the situation.
  3. knowing that owning a home will be a significant change that will affect most other aspects of life.
  4. The stress of having a mortgage and dealing with a lender.
  5. Issues uncovered during the inspection process or in dealing with the sellers.
  6. Moving.

Those are the main stressors but there are many more. Waiting is can be a huge stressor and there are times when we just have to wait. Competing with other buyers, the fear of paying too much and finding problems during an inspection are a few more.

I encourage people to listen to that inner voice and work through the issues. For most people owning a home is worth the effort.

Be prepared to deal with the ups and downs during the home search and buying process.

Buyers get ready to compete

Crocus
Crocus

The spring real estate market is competitive. It isn’t at all unusual for a home to get offers the day it comes on the market or even before. Buyers who must buy in April need to be able to compete with other home buyers and win.

Here are a few ways to beat the competition:

  1. Don’t wait for an open house, make an appointment and see the home as soon as it comes on the market.
  2. Be willing to look at houses before the weekend. look on your lunch hour or in the evening or leave work early. Get to the house first.
  3. Have an up-to-date pre-approval letter from a mortgage lender.
  4. work with a lender who is responsive.
  5. Work with a real estate agent who has experience and who is responsive.
  6. Decide ahead of time what your downpayment will be.
  7. Remember that if you are asking the seller to pay your closing costs that comes off of their bottom line. I have watched many buyers lose out by asking the seller to pay buyer closing costs.
  8. Be ready to move. An offer with a closing date months in the future might not be what the sellers are looking for.
  9. Be flexible on your closing date.
  10. Low ball offers on houses that were just listed today almost never work out.
  11. Always keep in mind that the current market is not fair or balanced but it is a seller’s market.

Loosing out on a house is not at all unusual. Learn from it and move on to the next opportunity.

One common mistake is to offer less as a starting point. In a multiple offer situation, the seller chooses the highest and best offer rather than negotiating with lower offers. Never assume that if you offer X then the seller will counter with Y.  Always be ready for the unexpected when dealing with people involved in buying or selling real estate.

Also, be aware of the fact that the special house you just found is probably going to be found by a zillion another home buyers. You won’t be the only interested buyer.

It is easier said than done but it is important to not get emotionally involved with the real estate that you are bidding on.

There is always another house for sale and who knows the one you end up with could be better than the one you lost out on.

Also, see:

 

Finding a bargain

Closing costs

Love letters from buyers and fair housing

I don’t make the rules but I follow them and occasionally I write about them too.

We have had a few listings that have gotten multiple offers. Some of the buyers making an offer send ‘love letters” along with the offer. The letters say how much the buyers loved the house and how they plan to fill it with children. Buyers include pictures of themselves and of their children.

They also include information about the buyers marital and familial status. Sometimes the letter will mention a local church or parish school that the family plans to attend.

There isn’t any rule against buyers writing letters to the seller but I always advise my sellers to ignore the letter until after they have chosen an offer. It is against the law to favor one offer over another based on the race, religion or familial status of the offerer.

If the seller accepts the offer because they like the buyers the best and it wasn’t the best offer that could lead to a fair housing complaint. Sometimes the offers are similar but one offer has a letter with it. It is tempting to use the letter as a tie breaker but I strongly advise my clients against that.

Sometimes home sellers will tell me they really want to sell their house to a family with children. I have to explain to them that it doesn’t work that way and I can not help them. I can not advertise to families with children or any other demographic.

It is important to look at selling a home as a business transaction and to look at the terms in the offers and what kind of financing the buyers are using.

Sellers view love letters with caution

Take advantage of lower interest rates

I didn’t want to publish this on April fools day because I was afraid that people would not take it seriously. Here is a look at mortgage interest rates:

By historical standards none of the rates on the chart below are high but rates were higher and have gone down making buying a home just a little more affordable.

Mortgage Rates

Supply of homes for sale snap shot

The snapshot is for St. Paul. Pending listings are the homes that are sold but not closed. Most of them will close. Compare that number with the number of new listings and it is easy to see why the number of homes on the market in St. Paul is small and currently shrinking.

Subtract the canceled and expired listings and the number of homes for sale gets smaller. There are around 335 homes for sale in St. Paul right now. This is a seller’s market. Homes are selling quickly. In a few days, I’ll have March home sale numbers for St. Paul.

 

MLS dash board
MLS dashboard

Home buyers looking for professional help. . . find my contact information to the right.

Staging in an era of minimalism

There are various ways to stage a house. Hiring someone to come in and furnish every square inch of the home isn’t the way to stage a home.  The goal of staging should be to make a room look more inviting or in some cases to show how the room could be enjoyed.

Often when I see professionally staged homes I see too much stuff. Too much furniture and too many objects, a cluttered look.

Having less in a room makes it look larger and can help the buyer imagine the potential of the room.

Personally, I think empty or nearly empty rooms can really show off living spaces. Once the stuff is gone I notice the lighting and the layout and I start to imagine the room with my belongings in it.

Some of my clients feel the same way. The idea of minimalism and of smaller houses with smaller rooms is more attractive than rooms filled with furniture.

Recently I have read a raft of articles about the advantages of living without furniture. The articles include pictures of rugs, mats, and pillows. There may even be some health benefits in sitting on the floor vs. in a chair. I’ll keep my furniture but I won’t ignore the trend.

Furniture is expensive, it takes up space and limits how a room can be used.

I am not ready to get rid of my furniture but I am open to the idea that houses are not about furniture.

Often removing items from a house make it more salable.

Sometimes removing some furniture and re-arranging what is left can make a big difference in how a room looks. Rooms with some rugs and a few pillows, a chair or rocker, end table or coffee table and some window treatments are enough, especially in some of our older smaller St. Paul homes.