Once your friends and family know you are looking for home to buy you may hear,” let me give you some advice.” They’ve been there, done that and watch copious amounts of House Hunters on HGTV. However, their well-meaning opinions and words of ‘wisdom’ may lead you down the wrong paths.
“You should remove contingencies to make your offer stronger.”
In a competitive market it’s tempting to write an offer with no contingencies. I beg you to reconsider. These safeguards are part of the contract for a reason. There is an inspection contingency: to save you from buying a mold-ridden, termite infested property. Appraisal contingency? Understand that if the lender’s appraisal comes back less than your offer price, you are obligated to buy the home and come up with the difference by closing. How much do you like to gamble? Lastly, the loan contingency protects you in case the lender cannot approve your loan. Remember, contingencies are designed to protect you from utter catastrophe.
“Make a low-ball offer and negotiate up from there.”
Again, it’s still a sellers’ market, and often they receive more than one contract to consider. This can start the negotiations off on the wrong foot, offending the seller, or worse, driving them to reject your offer outright. Not all seller’s counter the offers they receive, often taking the highest and the best one. Serious buyers and sellers know what a home is worth.
“Don’t bother with a home inspections.”
Sure, you can save a few bucks by not doing your due diligence, after all the house looks really clean and well cared for. Saving a few bucks upfront could cost you thousands down the road. Some folks only get a termite company to do a pest inspection. All they are looking for is termite and dry-rot. Consider getting a home, chimney, sewer lateral and possibly pool inspection. You will uncover issues and know if/how you wish to move forward.
“Just use the listing agent to represent you.”
Called dual-agency, it’s ethical, legal and often done. You think it will give you an edge and cuts down the number of cooks in the kitchen. You think your offer will rise to the top of the pile. Why? The listing agent represents the seller. They have a fiduciary duty to keep the sellers’ best interests at heart. It’s the seller who chooses which offer they want to accept, not the agent. Using the listing agent to write your offer and represent you is like having the same attorney representing both sides of the case.