Sannhet Realty

1. When buying a new home, what upgrades are important?

The answer really depends on why you are buying the home. Is it purely a home or is it to be an investment?

Upgrades typically are high-profit items for builders. They are not intended to enhance the value of the home, but make the home more appealing to you.

If you are looking at your home as an investment, then you should not go overboard on the upgrades because the upgrades may deter a potential home buyer. If you are looking at your purchase as a home, then you select upgrades that will enhance your quality of living.

One thing to consider is to always upgrade the carpet and padding.

2. How do I determine if my home will increase in value so that we can upgrade?

As with any investment, there are risks.

Location is the most important factor. Take into consideration that the home does not back to busy streets and is close to the interior of the tract as possible. Avoid corners and intersections. Choose the middle of the block or a cul de sac. You'll want to be sure it has at least two bathrooms (if you are buying in an older area).

Sometimes it is just timing that works out best for you. For example, if you buy a home before a major surge in local prices.

3. We were set to close and the seller now wants to set up a new closing date. Can I get them to come down off the price of the home?

The seller may have had legitimate reasons or perhaps not. It is possible to renegotiate the price if you choose to, and this can be looked at several ways. Once you make your offer to purchase the house at a lower price, this can be looked at as a new offer, which can nullify your original offer.

This could prolong the transaction, so most likely, you are going to just have to decide whether you like the home enough to go ahead with the purchase.

4. The seller is unable to find a replacement property by the time escrow closes. They have requested an extension. If we do not agree to that extension, will we lose the appraisal fee, the home inspection fee, and our deposit?

You will usually get your deposit back, minus a small cancellation fee. However, the appraisal and home inspection have been completed and that work was not for free, so that money is gone. Since both the appraisal and home inspection were done for the specific property, if you choose not to extend and buy a different property you will have to pay those fees again.

5. How can I find out how much my home is worth? There are no comparable homes in my area.

Homes maintain their value better if the neighboring properties are fairly similar.

In this situation, you may actually have to consult with a Realtor and come up with some sort of consensus.. If your lot or home is over-improved for the area, that means the value will not likely be what you think it is. If your home is much larger, you might not get the same cost per square foot as other homes in the area.

An Appraiser may help in this situation, but Appraisers are better at "justifying" a price than in determining market value. The best bet is to talk with a Realtor who knows the area.

6. How do you know if the price of a home per square foot is reasonable?

Much more goes into the market value of a home than it’s square footage. For example, two homes next door to each other can have the same square footage, but if one has two bathrooms and the other has only one, the one with two has a higher value. It will also cost more per square foot.

However, if you compare recent sales of similar homes, the cost per square foot should be similar to those properties. You can ask your agent to provide you with comparable sales data.

7. Is there a percentage a seller will mark up the price of a home? For example, if the asking price is $154,000 is an initial offer of $135,000 too low?

Although you can always offer whatever you want, $135,000 is generally too low too offer for a home priced at $154,000.

Sellers usually mark up the price a little because they realize most buyers aren't going to make a full price offer (though in different markets you can get offers ABOVE the listing price). Although, In this scenario offering almost 15% below the listing price is a little excessive do to the fact sellers typically only mark up a few percent.

Before you make an offer, get your Realtor to go over the comparable sales of other similar homes in the same neighborhood. Make certain allowance for whether homes are selling briskly or slowly, and make an offer based on that data.

8. If you make an offer on a home and the owner comes back with a counter offer and you agree to it can the owner still change his mind and sell to someone else?

A seller is free to withdraw the counter-offer any time prior to your acceptance of it. The communication method for acceptance is usually described in the contract. If your acceptance was communicated to the seller in the method required by the contract (prior to the seller withdrawing the offer), the seller should honor the contract with you and not entertain other offers.

If the seller does not follow the contract, the problem then becomes whether you try to enforce your contract or not, which requires legal advice and expenses. For that, you have to consult an attorney.

9. Can you negotiate when making an offer on a new home?

Making an offer on new construction is not the same as making an offer on a resale. Most of the time, the margin for profit is so small on new construction (per unit)that there is basically little or no negotiating. You can try, of course, because "everything in real estate is negotiable," but do not expect too much.

10. Can you negotiate the price of a bank owned home?

The thing to remember is everything in real estate is negotiable. However, banks are more sophisticated about pricing than they were years ago. So those "Get a great deal on a foreclosure!" days are not what they used to be. Low ball offers generally don't go very far.