TEN WAYS TO SAVE THOUSANDS WHEN BUYING OR SELLING REAL ESTATE

#8 BUYERS
OFFER THE SELLER EVERYTHING YOU CAN (as long as it doesn't cost you anything)
Many buyers "shoot themselves in the foot" by to let the seller know how tough a negotiator they are. Needless to say, in most instances this has the opposite of the desired effect. The listing agent and seller thing the buyer is going to be a pain and tend to be dismissive of the offer.

Compare this with a buyer who puts up a large deposit (costs him nothing since it is refundable if the offer isn't accepted), has short inspection periods (contractor already lined up), has been pre-approved for the loan (has to do it anyway) and offers to close escrow at a time convenient to seller (costs don't accrue until escrow closes). Now, even though the seller might not like the buyer's price, they know if they can get some movement on price, they have a deal that is very appealing. This of course gives the buyer much greater leverage in the negotiation of price.

#9
NEGOTIATING BASED UPON INSPECTIONS
Here again, novice buyers often make mistakes. When a buyer believes the inspection period is an opportunity to further negotiate the price down, or get some other freebies, and combines this by being "real cleaver" and having his brother-in-law the handyman do the inspection, things do not usually end well.

First, and perhaps most importantly, the buyer doesn't get someone very experienced to look over the home in detail. If there is something serious going on with the foundation or roof rafters, will the brother-in-law catch it? If not, it's the buyer that will have to deal with the consequences.

Secondly, whatever is "found" will need a bid from a professional to be seriously considered. That will require an independent third party. (The seller may already have bids as well, which will make the buyer's goal even more difficult.)

Buyers, please remember, serious and expensive issues arise with some homes. Make sure you have the inspections you need from competent professionals. If there is an issue, you will be in good responsible hands when it comes to negotiating, knowing how much it will cost to resolve. And your claim will be considered valid.

#10
A Short List of Money Saving Suggestions

* When escrow closes and work, if any is completed, re-key the locks. You don't know who has keys and though this will cost you some money it could save you a great deal.
* If escrow is supposed to close on a Monday, see if it can be postponed until Tuesday. (In order for a Monday close, your lender will need to fund your loan on Fri. That's when you begin to accrue interest charges. By waiting until the next business day, you save those per diem charges, which only benefit the lender.)
* If you are going to be in your home less then 5 years, it is possible to get 90% of your title insurance back by securing a "binder" on the property. (Please see your title company for details....it's really easy.)
* Shop for insurance early on in the transaction. Many buyers get so caught up in the day to day issues during the transaction that they forget and then rush at the end without giving appropriate time to shopping for the best rate and terms. Please educate yourself! As someone who lost his home in the Oakland Fire, I know what it's like dealing with insurance companies. You might want to check out the following site: http://www.fool.com/personal-finance/home/foolish-advice-on-homeowners-insurance.aspx

TEN WAYS TO SAVE -continued

#3 - GET REPORTS AND BIDS UPFRONT
This will pay multiple dividends.
Have a home inspection. If the contractor calls for a roof bid or a heating contractor inspection, get it. (Your agent can give you recommendations.) By doing these simple, inexpensive items you will accomplish two things.
First, the buyer will make his offer with confidence that he knows what he is buying. He will see the reports and know what to expect regarding the physical condition of the property. This frequently will generate an offer that might not otherwise be there.
Secondly, by getting bids from reliable contractors on work that a buyer may expect, you will have a basis for negotiating these items.
If you rely on the buyer to obtain these bids, they could very well be used for negotiating the price or obtaining other concessions. Without your bids you wouldn't know whether those obtained by the buyer were inflated or legitimate.
#4 - Make Your Home Available
While we all love our privacy, especially at home, when your home is on the market, it is a good time to be social.
With larger inventories in our current market, permitting your home to be shown easily can reap rewards. Whether it is a lockbox, appointments or a combination of both, the more easily a buyer's agent can get their buyers into your home, the more likely you will receive an offer, maybe two.
Having your home in "showing condition" as well as being available, has become so important and valuable, that many Realtors encourage their sellers to move out of the family home during the time the property is being marketed. This may very well bring you a better offer more quickly.

#5 - STAGE YOUR HOME
The studies have been done and the results are in. Having your home professionally staged will bring you a higher sales price then if you don't. It will also sell faster!

BUYERS

#6 - GET PRE-APPROVED
It has become much harder to obtain financing since the '08 crash. The benefit of having your offer taken seriously, even if lower then the seller hoped for, will be enhanced by having a letter indicating that you are fully approved for the loan you need to purchase the home.
The letter I'm referring to is one that comes as a result of the lender having a credit report done for you as well as verifying emplymenet and savings.

Real estate agents know how many transactions fall apart because the buyer can't qualify under present lending guidelines. To know that there is a buyer capable of closing will gain you an ally when the negotiations get tough.

#7 - LATE BREAKING NEWS - BUY NOW!
The federal government has just modified and passed a tax credit bill for not only first time home buyers but repeat buyers as well. Here is what the California Association of Realtors released today:

Dear C.A.R. Members:

More good news for consumers, our members, and the housing market recovery. Following the Senate’s favorable vote yesterday, the U.S. House of Representatives just voted 403 to 12 to extend the home buyer tax credit, expanding the parameters to include existing homeowners and not just first-time buyers. As you may know, C.A.R. and our partners at NAR have worked for months urging Congress and the Senate to extend and expand this crucial piece of legislation. We expect President Obama to sign the legislation in short order.

As it now stands, the federal tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to be eligible for a tax credit of up to $8,000, while existing homeowners will be eligible for a reduced credit of up to $6,500. To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years. The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.

Under additional provisions included in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The legislation maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

Nationwide, more than 1.4 million first-time home buyers were given the opportunity to become homeowners as a result of the Federal Tax Credit for First-time Home Buyers. We expect that number to increase dramatically in the months ahead with this new legislation in place. Thank you to our members who called, wrote, and e-mailed their congressional representatives and voiced their support for the home buyer tax credit. Your voices were heard – today’s vote is a direct result of your actions and involvement.

Sincerely,

James Liptak
2009 President

CALIFORNIA ASSOCIATION OF REALTORS®