Buying a House Can Be Daunting

Buying a house is not for the faint of heart. It can be a very complicated and daunting.

It can involve a fair chunk of cash, a bunch of time, and lots of ego and willingness to negotiate.

It can involve a lot of people involved, agents, brokers, lawyers, accountants, investment people, title searchers, appraisers, contractors, roofers, insurance agents, lenders, foundation people.

It can involve lots of back and forth. Nasty things can be said and the police can even become involved. And special problems might

It can involve shady dealings, minky deals, and outright fraud and intimidation.

It can involve weaks of looking, soul searching, trips back and forth, deals falling through, or you can find your dream home on the first try.

Or, it can be simple and straight-forward. Aunt Eller might sell you her home for $1 on the condition that you allow her to keep it as is until she dies. She may trust you and not even get a lawyer to make it legal.

Or, an investor may come in with a bunch of cash willing to purchase the property without even going inside. If he's scoped out the neighborhood, determined rightly or wrongly that there's a lot of potential and he's going to just tear it down anyway so he doesn't care.

Or, you might be sitting at your dining room table on Sunday afternoon saying to your significant other, "You know if somebody came in here and right now offered us $250,000 for his house, I think we might just take it."

This happened to my first in-laws, John and Kathryn. They had a very big, beautiful, ranch house on a huge lot in a new development just outside Harrodsburg, Kentucky, overlooking a golf course with a great view of some of the state's finest blue grass. They were having dinner, and John said words to that very effect to Kathryn.

That afternoon, somebody knocked on the front door and said something like, "You have a lovely home. Would you consider selling it?" John invited them in, Kathryn fixed some coffee, pulled out one of very best Sarah Lee cakes from the freezer, and away they went. The rest is history. Which shows you can never tell.

A normal settlement involves a buyer, a seller, an agent for each one, a lender, and a title clerk. But there can be a lot to it and the more buyers are aware of what can be involved, how things work together, and what they have to do, the easier it will be. Not simple, but not as daunting.

So let's go to the beginning.

I'm trying to create a more knowledgeable buyer. How am I doing?

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Real Estate Appraisals for Buyers

Buyers who are buying a house should have the home appraised. If Buyer is using a mortgage to fund the purchase, Lender will require that one be done. If Buyer is paying cash, Buyer should have the home appraised to increase his confidence that the asking price for the house is consistent with the value of other homes in the neighborhood.

Appraisals are not perfect. The rules of appraising sometimes make appraisals look iffy. But for Lender, the appraised value sets the amount above which Lender cannot lend on the home.

For example, if Seller is asking $150,000 for the home, and the appraisal sets the value at at lest that amount, fine. But if the appraisal comes back saying the home is worth only $125,000, the bank cannot lend more than some percentage based on $125,000. That percentage depends upon the loan program under which Buyer qualifies.

If Buyer is using a mortgage, and Lender won't loan on more than $125,000, there would be some discussion about lowering the purchase price of the home. Buyer may say, "Look, Mr. Seller, you're asking $150,000 and this appraisal says a bank won't lend on more than $125,000. Let's talk about reducing the price."

Buyer may say that. Let's see what Seller will say next time.

I'm trying to create a more knowledgeable buyer. How am I doing?

I have some other blogs, too. For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.

Go to www.byandforwriters.blogspot.com if you would like to get a short story published.

For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.

For a proper connection strategy, go to www.referralbasedbranding.blogspot.com

One Last Word on Seller Home Inspections

If you have your home inspected, which I recommend. Be aware that the inspection becomes part of the record of the house. You don't have to disclose that you had one, but if the buyer's agent asks, you have to tell them yes and give them a copy of the report if they want it. The buyer's agent will probably go ahead and order an inspection as well, but with two inspections, the confidence is even greater that both the buyer and seller know what the house is.

Be a better citizen of the community and a better partner in the transaction. Get a home inspection.

For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com. I have some other blogs though.

Go to www.byandforwriters.blogspot.com if you would like to get a short story published.

For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.

For a proper connection strategy, go to www.referralbasedbranding.blogspot.com

Reason Why Seller Should Get a Home Inspection #3

The third reason a seller should get a home appraisal: Seller has ammunition to use in discussion with Buyer. If the buyer says the roof needs a recoating, and your inspector recommended a roofer look at it and you had a roofer look at it and he said it's fine, you have some rational basis to use for opposing their inspector's judgement that your roof needs work.

I'm right about this, but in 5 years of practicing real estate I haven't known a Seller of mine yet that got a home inspection. Instead, they sat back and played victim and complained about buyers just wanting to have another reason to beat back the price.

Sigh.

Don't be one of those. Get a home inspection.

For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com. I have some other blogs though.

Go to www.byandforwriters.blogspot.com if you would like to get a short story published.

For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.

For a proper connection strategy, go to www.referralbasedbranding.blogspot.com

Reason Why Seller Should Get a Home Inspection #2.

The second reason a seller should get a home appraisal: Seller knows what needs fixing to make the house show better and more likely to pass inspection.

Too many sellers are passive. They wait for a buyer to make an offer on their home, then wait for the home inspection, then try to have to do as little as possible to the home once the inspector gets through inspecting it.

Intelligent sellers will want to know what needs fixing. They're less likely to get a buyer trying to argue for money at settlement due to repairs. So they have their home inspected, then spend their money to get what needs fixing, fixed.

Then there's the moral question of do you want to sell a defective product. Once that home goes on the market.

People don't want to spend the money on an inspection because they think it's a cost to them. It's an expense, but it's also an investment in the sale. I'm not an accountant, but I believe that it's deductible if it's part of the sale.

I'm trying to educate buyers and sellers about real estate. Is this helping?

For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com. I have some other blogs though.

Go to www.byandforwriters.blogspot.com if you would like to get a short story published.

For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.

For a proper connection strategy, go to www.referralbasedbranding.blogspot.com