If you’re getting ready to buy or sell any significant product or service, it’s best to know as much as you can before you make a decision with serious financial implications. After all, An Informed Decision is the Best Decision!
Buying or selling a home may be the biggest financial decision you make in a lifetime, so knowing as much as you can about the buying and selling process will make for a smoother and, likely a more financially satisfying transaction.
But how do you become an educated home buyer or seller? We went to our own real-estate expert, Realtor Terry Lehman of Bosshardt Realty Services, for the scoop on how to prepare to be an educated buyer or seller.
First, we reviewed what a seller needs to know.
“The first step is to know your own home,” he said. “We want no surprises during the sale. That’s why I recommend a pre-inspection before you put the home on the market.”
Performing an inspection before you put the home on the market, gives you vital information about the health of your home. With this information, you can decide what repairs you may want to make, and which ones you may want to leave for the buyer. But be aware, Lehman says, leaving repairs for the buyer will impact the price of the home.
When making these decisions, you need to consider substantial repairs as well as cosmetic changes to make the house more attractive to a buyer.
To make the best choices, you need to know the true value of your home.
“You don’t want to take Zillow estimates too seriously,” he said. “You want to get the price right from the beginning. There’s a period of what we call free publicity when you first put the home on the market. You don’t want to lose the benefit of that period having to adjust the price of the home.”
Even as a seller, you probably need to talk to a lender, he said. You want to make sure that whatever you get for the home clears the mortgage. And depending on your plans for a new place to live, you need to know your own financial capabilities.
On the buying side, the first step is to talk to a lender.
“You have to know what you can afford,” Lehman said. “And the seller will want to see a pre-approved letter (meaning you are approved in advance for financing). I’ve seen situations where one buyer offered less but got the home because they had a pre-approved letter.”
You need to go into the process knowing what you want and what you don’t want. Do you want a pool? Do you want to be in a good school zone? Do you want to avoid streets with high traffic?
“There’s a lot to consider,” he said. ”Just as an example, even if you don’t have children or they are grown, you still want to consider a home in a good school zone for when you later sell the home yourself.”
A buyer needs to be educated on all the additional expenses beyond the cost of the home. Are there issues with the roof, A/C, plumbing? An inspection as part of the sale is critical, even if the seller did their own inspection before putting the home up for sale. Without that you could be facing serious insurance implications, Lehman said.
Whether you are the buyer or seller, it’s good to go into the process with a Realtor. The Realtor is always paid by the seller.
These ideas are only the tip of the iceberg when buying or selling a home. As we said up front, the better educated you are on either side, the smoother the sale will go. To that end, maybe you should consider going to school. Lehman teaches two classes at Santa Fe College multiple times during the year – one on home buying, the other on home selling. The classes are only one evening and not expensive – definitely a good investment. You can check for your next opportunity to take one of the classed by going to the Santa Fe College Community Education registration page and clicking on the Money and Finance category.
Next time in Mr. Rick’s blog, we’re going to look at the importance of having a qualified, licensed electrician take care of your home.