FAQ's for BUYERS

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HOW, WHERE, AND WHAT DO I BUY?

Great question! Contact us, SD Realty Pros, we’ll take you step by step through the process of purchasing your home. We will collect information from you regarding what you are looking for in a home. Based on your savings and income, we will be able to easily identify an area that will be just right for you. We suggest purchasing no more than 30 – 35% of your gross income for a payment.

Of course financing is not the only parameter. You’ll want a home that provides all or MOST of the features and amenities that are important to you and your family such as location/commute, schools, community activities and styles, and so much more. Don’t worry – we’re looking out for you – that means success.

How do I determine "market value"?

First, consult a Realtor like us. We will do a comparative market analysis for the home that has your interest, also known as a CMA. We look at all kinds of data to determine the price. A few items we look for are the homes that have sold recently in the neighborhood and the prices at which the homes closed escrow. We also look for similar homes, how many days the house was on the market, and price per square foot at which the homes were sold. Because we want you to get the best price for your dollar we employee strategies when you are buying to make your offer the most attractive to the seller.

Something to keep in mind: There are three prices people look at:

First, "Active", which can be anything even if it does not make sense for the neighborhood. Many sellers trying to sell their own home look at this price. It is an asking price -- and that is all it is. It is "fantasyland" because a seller can ask whatever they choose. This is another important reason to get an objective opinion from us.

The second price is "Pending". All this price reflects is an asking price that brought an accepted offer. The "Sold" price, the actual selling price, is kept secret in case the deal falls apart. Knowing the accepted offer price could put the seller at a disadvantage. And, this secret is part of the fiduciary responsibility of the agent to be kept secret.

The real price, "SOLD" is the reality of real estate market. This is what the market will bear at that point in time.

How do I make an offer that will be accepted?

Keep in mind that PRICE is not the only determinate in Acceptance of an offer. Sellers are also concerned with TIME. They most likely have a timeline they are working with, and will compromise price for time in many instances. Sellers will also scrutinize offers for any holes such as contingencies to sell other property in order to buy, demands for credits to buyers for repairs, and other case-by-case terms for the property.

In addition, a careful study of the market trends, both generally and specifically, is made regarding the properties that have actually SOLD. Typically in today’s market, a buyer’s first offer is a realistic offer that may be lower than the asking price, which will more than likely get a counter offer. From this point it is a matter of communicating each parties’ needs, be it time or money and bring together a win-win situation.

How do I know I’m getting a "good deal"?

We’ll tell you! Seriously, we know a good deal when we see it. However, you will have to make the decision whether to purchase or not purchase based on the information we provide. And, you can count on us supplying you with more than enough information to make that decision confidently.

If I need to take out a mortgage, how do I compete with investors paying all cash?

You don't! The good news is we have listings and you are our client. We may have exactly the home you’ve been looking to buy, and it may not even be on the market yet. We always scour our database of buyers with every new listing we take. We will not necessarily recommend a cash offer to the seller, especially when we have a buyer such as yourself making a reasonable offer. Your job will be to keep your credit in pristine condition, having met with a reliable loan officer, and remain committed to act according to the terms of the offer you submit.

As an investor with cash, how do I make an attractive offer to banks?

An attractive offer is cash! The answer to this question also depends on what type of property on which you are interested. Are you buying a short sale, an REO, or a traditional “listing” that does not require bank approval? We are in a position to talk with the decision makers. We will point out all the reasons they will benefit by taking your cash offer. Some of these reasons include saving money on attorneys fees, asset managers, and quickly removing bad loans from their books. Banks are not in the business of owning property; their business is lending and earning a return on their investment from solid borrowers. They do not want to carry an inventory of distressed, vacant homes and we know how to leverage that pain.

Why do I need a real estate agent?

You require an objective opinion to purchase your home. We know what to look for when purchasing. Examples can be as simple as nearby power lines, which can affect the value of a home on the market. There are many more examples of how to assess the value of a purchase, and it is automatic for us as professionals. Buying a home can be a very emotional experience. When you have a professional real estate agent, a Realtor, assisting in selling or buying, you can rely on our expertise to get you the very best price, whether selling or purchasing. You can also count on the contract being air tight, all necessary disclosures being issued on your behalf, a professional transaction coordinator to keep track of timelines in the contract, and to coordinate all the contractors, repairs, and orderly flow of paperwork until you receive the keys in hand. You know what the problem is? We make it look so easy. You’re safe with us.

Won’t I get a better deal if I work with the listing agent on a property?

This is a popular misperception. Most times we can negotiate a better price for a buyer than a listing agent can, even if he’s "worked a deal" with the seller on dual agency. Quite frankly, it is most difficult for an agent to get the best possible price for both the seller and the buyer at the same time. You’ll want an agent to represent you and only you. It makes sense!

How are closing costs calculated, and will the seller pay for my closing costs?

Closing costs are calculated on a variety of fees including commissions to the agents, loan origination fees, inspections, credits back from buyer or seller, title reports, and other sundry fees. The best way to calculate closing costs is to ask our agent for a good faith estimate when you find a home you would like to purchase. We work day in and day out with industry professionals such as an escrow team, and we’ll provide the information to you.

Closing costs are negotiable and you can ask the seller to pay for all or some of them. This would be more the case in a market that is rising. Many sellers are very close to the end of their money in a downward market so they may ask for closing fees from the buyer.

What’s a lease option?

In a nutshell, a "lease option" refers to a buyer who wants to lease a home with an "option" to later purchase the property. The seller acts as a landlord during the lease, just as any other landlord. Both the seller and the buyer agree on a price for the property, to be purchased at a later date. The buyer pays the seller an "option" fee for the right to exercise that option. This doesn’t mean the buyer must buy the property according to the price and timeline set forth in the option agreement. This means the buyer MAY purchase the property; hence the fee for the "option". The seller collects the option fee whether the buyer exercises the option or not. All terms of this agreement are negotiable; for instance, it is common that the option fee may go toward the purchase price of the home.

Market conditions drive this favorite purchasing strategy for several reasons: it is a buyer’s market and sellers don’t necessarily want the property to remain vacant. Typically a buyer who is considering a lease option will take better care of the property because they see themselves owning it. Buyers may not have a downpayment in place, but want to take advantage of the low prices of housing. They will negotiate today’s price in exchange for time to get their financing in order to qualify for a mortgage. This is why they are willing to pay an option fee.

This is just one of many creative financing opportunities in today’s market. Don’t you deserve to know all your "options" ... okay so the pun IS intended. Call now if you'd like to know more.

Do I need to have an appraisal performed before purchasing a property?

It is not necessary to purchase an appraisal if you are paying all cash. However, it is recommended to substantiate value. If you are purchasing with a loan, the bank will require an appraisal.

How involved must I be with inspecting the property?

That’s up to you. We recommend you get involved so you know exactly what you are purchasing. Being at the inspection is not mandatory. The professional inspector will list all findings from the thorough inspection, and point out repairs that need to be made as well as maintenance items that may be deferred. You will be well advised to read through the report carefully and also read the seller’s disclosures and the agent’s visual inspection. That way we can answer any concerns and questions you may have about the property’s condition. It truly is your “due diligence” to inspect the property thoroughly.

Won’t the seller fix all the repair items?

No, all repairs are negotiable with the exception of "statutory" or government-required items, i.e. smoke detectors, water heater bracing, etc.

How can I get a foreclosed property?

A.K.A. REO, (real estate owned by the bank) Call us!

Can I purchase more than one property at a time?

Money talks; you can buy a whole subdivision if you have the resources. We’re ready to help.

What’s the best way to hold title to a property?

The manner of holding title is a personal preference. Because each person’s needs are different, we provide you with all the ways of holding title and their associated consequences.

How do I find out how much I can afford?

Call or email us and we’ll put you in touch with a seasoned lender you can trust. We’ll work together to give you an accurate number that will not leave you house rich and cash poor.

When can I go look for my next home?

There’s no time like the present. Let’s go.