Mar 29

Buying a house in this “Buyer’s Market”


Buying a house in this “Buyer’s Market”
Written by Bill Barksdale

As I’ve said before, a Buyer’s Market is the opportunity prepared buyers have been waiting for!  Listening to the corporate media blitz of bad news you might think no one is, or can, buy a house right now.  The truth is many people are out shopping and they’re finding some very pleasant surprises.  Not only are interest rates for many buyers well below 6% right now, many seller’s are welcoming offers they wouldn’t have looked at a few years ago and there are a lot of good quality choices for Buyer’s who have done their homework and are prepared to make an offer.  Here’s a little primer for getting yourself ready to make a purchase in this luscious garden of opportunity.

Step One for a buyer in any market is always to get preapproved with a reliable lender.  “Preapproved” means that your loan agent has taken a written loan application from you, and anyone else who will be borrowing with you on this purchase.  They have run a credit check on you and verified that your credit rating is high enough (in this market usually 660 or higher). They’ve made sure your income and employment fits the criteria of the lender and that you have any required downpayment and funds to cover closing costs.  Pretty much all we’re waiting for now is for you to find the right house and make sure it qualify’s under the lender’s standards.

The buyer who is preapproved is always in the strongest position when they make an offer.  It’s hard for a seller to play hardball in a buyer’s market with any reasonable offer from a preapproved buyer.  If your credit rating is below 660 there is still hope that you can get preapproved.  You will need a loan agent who is experienced and can find a lender that will work with you.  You will pay a higher interest rate since lenders determine your interest rate by the amount of risk they perceive they are taking.

Step Two, if you haven’t already done this, is to find a real estate agent who you feel a rapport with, someone you trust and is willing to take all the time necessary to explain the process to you and answer all of your questions.  The real estate business is really for full-time professionals now.  It’s pretty hard in the complex world of 21st century real estate to do it part-time.  There’s just too much a good agent needs to know now.  A big part of real estate practice involves consumer protection and that’s only part of it.  Even though real estate agents don’t practice law, they have to study Real Estate Law, Appraisal, Economics, Ethics, Agency and many other aspects of the practice.  Longtime agents who are diligent about keeping up on their profession have many long hours of study is areas such as easement law, property management – the list goes on and on.

Once you have found a good agent, stick with them.  Agent shopping just weakens your position.  If your agent feels your loyalty they will work very hard for you.  It’s important to keep in contact with your agent.  Don’t assume they can read your mind.  If you have concerns, call them and let them know.  Let that agent find the answers you need, help you locate reliable inspectors and insurance agents, advise on records that need to be inspected, help you with the preliminary report and all of the many details that must be covered in the very short inspection period once you put an offer in.

Step Three is to have your agent help you find properties that will work for you.  I’ve often found that what a buyer initially tells me they want, changes as we get further into the process of looking at houses.  I try to listen very carefully to my buyer clients throughout the process to make sure I am helping them find what they really want and need.  If I detect a change of course, I’ll bring it up and confirm with them.  Sometimes it’s a journey with many twists and turns until we find what the buyer is really looking for.  Careful listening is a necessary quality of a great agent.

If the home you choose is a probate, short-sale, exchange  or has some other added complication your agent will need to determine the correct way to write the offer to make sure you are properly protected.  On occasion an agent may even have to advise you to consult an attorney for very complicated situations.  Very often an experienced agent will be able to bring in a title officer, appropriate advisor or other appropriate professional that will cost little or nothing to get the right answers and get the transaction moving again.  Agent’s who have been around a while have many resources available to help them and their clients.

Step Four is the roller coaster ride of negotiating the offer and, when accepted, going through escrow.   I’ve seen buyers loose a house they really wanted because they got abusive with a seller during the offering process.  A “Buyer’s Market” doesn’t always mean the seller is desperate.  Even they are desperate, respect goes a long way.

There are well over a hundred things that can go wrong in the process once you have an accepted offer that threaten to derail the deal.  Much of what an agent does is to put out these fires as they come up to keep the transaction moving ahead to closing.  Information can be revealed that needs your immediate attention.  Your agent can advise you regarding what needs to be done next.  If the proper procedures are not followed you may loose your deposit or have some other mishap.  Help is available.   A good agent is your best shoulder to lean on for support and guidance here.

One new problem is having the lender go out of business during the escrow!  That’s like having the floor fall out from under you.  I was representing the seller in a recent transaction when that happened.  The buyer’s agent didn’t know what to do so they ordered a cancellation of the transaction.  I called one of my reliable loan agents who told me she could put the financing together.  I asked the buyer’s agent to have the buyer call this loan agent, they were happy to get this tip.  Within two weeks the transaction closed.  Agent’s working together and knowing who to call can put things back on track.

An important part of Step Four is conducting inspections (your agent can suggest inspectors) and examining the many pages of disclosure material.  If you have trouble keeping focused with paperwork, it’s important to have your agent help you in this process.  This is no time to fall asleep with important information to digest.   Do your own due diligence in the time frames of the Purchase Agreement or you may loose important rights.  Sometimes that can be costly.  Don’t expect your agent to decide what’s important to you.  Ask lots of questions.  Your agent will know who to consult or where to go for help.  Go over this information with your agent and let them help you decide how to deal with problems.  There’s almost always a solution.

This is a good place to bring up a very important aspect of a successful real estate transaction.  Good agents are always looking for ways to help buyers and sellers find common ground, what is called “a meeting of the minds”.   Sometimes one’s nerves get frayed in the course of going through the purchase period.  That’s normal.   It’s never a good idea to sustain a hostile tone or to act out of anger.  That only hardens positions and no one gets the best deal.  Diplomacy is worth dollars.  Look for the solution.

Step five is closing the transaction.  There are many details that have to be coordinated by the agent, escrow officer & lender representatives in the last few days leading up to closing.  Occasionally there are delays of a few days while everything is getting to the place where a loan processor is ready to “fund” the loan.  Once those details are in order, you will sign the closing documents & bring in your downpayment and closing funds, the signed papers will go back to the lender for review for up to 48 hours after you sign, the loan will be funded and the transaction will close.  You will be a home owner.

This is just a summary of a very complex process but I hope it helps you get ready for the satisfying experience of owning your own home.  It’s a cornerstone of building some financial security for your self.

ABOUT THE AUTHOR, Bill Barksdale: I have been selling real estate in the Willits/Mendocino Co. market for over 18 years. I can be reached at Coldwell Banker Mendo Realty Inc. PH: 707.459.8888 or Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . I hope you will find my site (Bill Barksdale's Real Estate Site) of use to your home buying or selling a home now or in the future.

E-mail Print PDF
Additional Information

Valid XHTML 1.0 and CSS 3    Up  Back to top!