7 Home Purchasing Secrets
That will save you Thousands
Get a Pre-Approval Letter First
n today’s Real Estate world Sellers are increasingly more savvy. Having a Pre-Approval letter from a lender can be very beneficial in your purchasing negotiations. This relays confidence to the seller that you can purchase the home. It also means that much of the time consuming processes of the transaction have already been done. In some situations this can be used to your advantage in the negotiations.
t is a good idea to present a Pre-Approval letter for the EXACT amount of your offer. Giving a generic Pre-Approval letter with the Max amount you are qualified for can impugn your position in the negotiations.
ost good Mortgage Brokers will work side-by-side with you through this process. To find out more about obtaining a Pre-Approval letter
to Ask an Expert for
Ask for Closing Cost
ost Sellers are attached to their asking price. Although, more times than not Sellers will usually price a home higher than what they will actually accept. When purchasing a home there are additional cost incurred by the buyer in the form of Closing cost and escrow pre-paids. Requesting help with the closing cost from the seller can allow the buyer to present an offer closer to the asking price while lessening the overall out-of-pocket expense to the Buyer.
(FYI: The rule of thumb is to ask for 3% of the contract price for closing cost)
This is one of the best tools to use in purchase negotiations to save you thousands of dollars on the overall purchase cost. By adjusting the contract price higher to include some or all of the closing cost can go a long way in coming to a mutual agreement between the buyer and the seller. You can
Ask an Ekpert
in-depth guidance on this process.
Title Company Cost
losing cost can vary considerably from Title Company-to-Title Company. Established Mortgage Brokers deal with many Title Companies on a Regular basis. Many of these Title Companies offer special rates to Mortgage Companies who send them continuous business.
Reputable Mortgage brokers can request an estimate closing cost "Work Up" from different Title Companies in your area to help you evaluate total closing cost.Click here
Homeowners Insurance Cost
s explained in
Homeowners Insurance can vary from Insurance company-to Insurance company. A good mortgage Broker usually works with more than One Insurance company. And, again many Insurance companies may offer special rates for their Mortgage Broker clients.
Evaluating Insurance cost ahead of time can also help determine closing cost which will be beneficial in your negotiations. Click here
Work With the “Listing” Agent Directly
f a property you are interested in is listed with a Real Estate company it can be to your advantage to work
with the “Listing” Agent. Realtor commissions are normally split evenly into “Listing Commission” and “Selling Commission”. In many cases a realtor from another company presents a purchase offer to the “Listing” Company resulting in an
“Out of House”
sale splitting the commission between the two companies.
As a Purchaser if you deal directly with the “Listing” Agent the commissions are NOT split and the Listing company makes the FULL commission, resulting in an
How does this help you? In some cases when negotiating a purchase contract the difference between agreeing and disagreeing on monetary terms may only be a few hundred dollars. Working directly with the “Listing” Agent(Who is making both the selling and listing commissions) may be more receptive to adjusting their commission amount to get the deal closed.
For guidance on this process it is a good idea to speak with a Mortgage Broker
Give the Seller Options
n most real estate negotiations there is usually at least one counter offer. If you are going to ask the seller to change the terms, give them a few options. This way their decision is not based on a simple acceptance or rejection.
This doesn’t work every time but it’s an old and useful sales secret: getting the other party to choose among various options thatall benefit YOU
, vs. choosing accepting your offer and rejecting it.
Use a Closing Date 60 days out
ith today’s historically low Interest Rates funding companies are busier than ever. With extended underwriting times coupled with appraisals, inspections and Loan stipulations, the Mortgage process can run 45 days or longer. By locking your rate 45 days out and allowing up to 60 days to close will ensure you will not have to extend your rate lock which could cost you additional funds at closing.
On the other hand if you have presented your Mortgage Broker with all required documentation during the Pre-approval process (mentioned in Secret 1) the closing can possible take place sooner. If done correctly, this time frame can sometimes play an important role in your purchase negotiations. A good Mortgage Broker can give you additional tips on these time sensitive issues. For