Tuesday, July 10, 2012

Homebuying secrets to steal from flippers - cont.

And in order to move quickly and land that prime piece of property, you must be preapproved for a loan and know what terms you can offer a seller.

With fewer homes on the market, buyers will often find themselves bidding against several other bidders. Without cash or the ability to offer a much higher price — for fear that a property won't appraise — buyers have to focus on terms that make life easier for the seller.
  • Can you get a home inspection and other due diligence done right away?
  • Can you close in two weeks?
  • Can you put a larger amount of earnest money down to show your commitment to closing the deal?
On one property the pair flipped recently, they accepted a bid that was $15,000 less than the highest offer because the buyer's agent convinced them they could close quickly.

You want to make sure you can offer the right terms and conditions and are ready to go. And you need to have an experienced agent who can communicate that to sellers. Don't just get your relative or your friend from high school [to represent you]; you want someone who really knows the industry. So many people sign a buyers agreement with the first agent they meet, rather than shopping around. Experienced agents who are working full time can get out to — and get you into — properties before other bidders.

Lastly, just as you don't want to settle when you're dating, you don't want to settle when buying a home. Here are a few of the things that could make a home less of a sound investment:
  • A "uniquely weird" layout or design.
  • A very busy street.
  • Safety issues or structural problems.
If there's anything safety-related [that's wrong with the house], you should walk away. Those safety issues will turn up on a home inspection, so never pass this step up when buying a home.

What do you lose by passing on a home inspection?
We've all heard that having a home inspection is a critical step for buyers before they close a deal. But occasionally a reader will ask what these inspections can turn up, and what you could miss by bypassing one to close quickly.

The three things you risk are your money, your safety and knowledge of that home's features — including its inefficiencies. It's one of the few services that will save you more money than you spend.

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