By Joseph Palumbo III
While talking with prospective home buyers, the general consensus is they believe they have an edge when it comes to making a real estate deal in this economic climate. But how do you create leverage with sellers?
As a prospective buyer, first get pre-approved for a mortgage. This means your lender has verified your income, checked your credit report and approved you for a mortgage for a certain amount for a fixed timeframe. When you have a pre-approval letter in your hand, you have become an attractive buyer and a serious one who has raised the bar in your favor regarding bargaining for the best deal.
You are realistically looking to buy. Based on your pre-approval letter, you can afford to purchase the property you are looking at. Ask why the seller is selling and if the seller has a timeline. The answers will give you leverage regarding how soon the seller wants or may need to sell. Perhaps the seller is already paying a mortgage on another property and cannot afford to hold notes on both properties.
Perhaps the seller is selling because the children have grown up and moved out. Now the house is too big and he or she is tired over the selling process and open houses and is looking to sell as soon as possible. This means a reasonable offer may land you the home at a fantastic price.
Do not overlook the extended home buyer tax credit. This will also give you more negotiating power than usual because it is extra monies on your side.
So How’s Business regarding maximizing leverage when buying a home? Buyers will find the best deals with the least competition in December and January. These are traditionally the slowest months in real estate and before a lot of buyers have made the decision to jump back in. Many will look to jump back in to the real estate market in 2010. I would not say the market has hit the bottom yet, but we are close. When real estate begins to make its comeback, it is going to take off quickly.
Contact Joe Palumbo at 516-297-4034 or jp@c21amhomes.com.
