Wednesday, May 6, 2009

Response to How Not to Buy a House

How to Buy A House, For Real

A Companion Piece to yesterday's How Not To Buy A House


Step 1. Use a local Realtor’s website to do your property searching. You won’t be distracted by listings in other cities, states or even other countries. Plus you'll get real-time data updates. No more looking at homes that say "For Sale" but really sold 3 weeks ago.

Step 2. Ask your friends and colleagues for names of Realtors they trust. (That's important. Don't just say "Who'd you use?" Say "Who would you use again?" 

Step 3. Collect 2 or 3 Realtor's names and contact each one. Let them know you’re interviewing Realtors. Trade phone calls and emails over a few days or weeks to see who you "click" with.

Step 4. Ignore tall tales of real estate bargains. That 5,000 square foot house for $73,000 that was “somewhere near Gilbert” which your co-worker's brother's in-laws bought? It was in the town of Maricopa, which is 90 minutes from your workplace. Plus it was 3,207 square feet with no pool and a dirt backyard. They don't call 'em Tall Tales for nothing.

Step 5. Realize that most homes are selling for about 90% to 98% of their list price. Ask the Realtors you’re interviewing for list-price to sold-price stats on the neighborhoods you’re focused on.

Step 6. Pick one Realtor and plan to work with him/her exclusively. Tell him/her this. Give him/her a very detailed list of what makes The Perfect House for you.

Step 7. Talk with a lender and get a loan pre-approval that’s current. My cat was pre-approved for a home loan in 2007. Times have changed. Send that lender your tax returns, paystubs and bank account statements now, to make sure there are no surprises when your application reaches the underwriting team.

Step 8. Skip steps 8 through 10 on my previous list. Instead, revise your short list of homes to include about 10 or 15 properties. Ask your Realtor to preview these properties for you, then pick about 3 to 6 "finalists".  Ask your Realtor to pull list-price to sold-price ratios on the neighborhoods in which The Finalists are located.

Step 9. Tour The Finalists with your Realtor. Pick one. Discuss the comps with your Realtor. Make an offer that's in line with the list-to-sold price ratios in that neighborhood.

Step 10. Congratulations! You got The Perfect House. Order address change note cards and call the movers.