5 Secrets To Buying The Best House For Your Money
By Madan "Raja" Ahluwalia, Fri Dec 9th

5 Secrets to Buying the Best House for Your Money

1. Get "Pre-Approved" - Not "Pre-Qualified!"

Do you want to get the best property you can for the leastamount of money? Then make sure you are in the strongestnegotiating position possible. Price is only one element in thenegotiations, and not necessarily the most important one. Oftenother terms, such as the strength of the buyer or the length ofescrow, are critical to a seller. In years past, I alwaysrecommended that buyers get "pre-qualified" by a lender. Thismeans that you spend a few minutes on the phone with a lenderwho asks you a few questions. Based on the answers, the lenderpronounces you "pre-qualified" and issues a certificate that youcan show to a seller. Sellers are aware that such certificatesare WORTHLESS, and here's why! None of the information has beenverified!

Many times unknown problems can come to the surface! Some of theproblems I've seen include recorded judgments, alimony paymentsdue, glitches on the credit report due to any number of reasonsboth accurately and inaccurately, down payments that have notbeen in the clients' bank account long enough, etc.

So the way to make the strongest offer today is to get"pre-approved". This happens AFTER all information has beenchecked and verified. You are actually APPROVED for the loan andthe only loose end is the appraisal on the property. Thisprocess takes anywhere from a few days to a few weeks dependingon your situation. It's VERY POWERFUL and a weapon I recommendall my clients have in their negotiating arsenal.

2. Sell Your Property First, Then Buy the House

If you have a house to sell, sell it before selecting a house tobuy! Contingency sales aren't nearly as strong as one that comesin with a ready, willing and able buyer. Consider this scenario:You've found the perfect house - now you have to go make anoffer to the seller. You want the seller to reduce the price andwait until you sell your house. The seller figures that this isa risky deal, since he might pass up a buyer who DOESN'T have tosell a house while he's waiting for you. So he says OK, he'll dothe contingency but it has to be a full price offer! You havenow paid more for the house than you could have because of thecontingency, and you have to sell your existing house in ahurry! Otherwise you lose the house! So to sell quickly youmight take an offer that's lower than if you had more time. Thebottom line is that buying before selling might cost youTHOUSANDS of dollars.

If you're concerned that there is not a house on the market foryou, then go on a window-shopping trip. You can identifypossible houses and locations without falling in love with aspecific house. If you feel confident after that then put yourhouse on the market.

Another tactic is to make the sale "subject to seller findingsuitable housing". Adding this phrase to the listing means thatWHEN YOU DO FIND A BUYER, you will have some time to find thenew place. If you don't find anything to your liking, you don'thave to sell your present home.

3. Play the Game of Nines

Before house hunting, make a list of things you want in the newplace.

Direct Deposit Problem Solved
Emailers send us messages all the time asking how to get direct deposit without good credit and without a banking account.
Prepaid Legal or Lexington Law to clean up credit?
The path of cleaning up disputes on your credit report can be along and windy one but Lexington Law services may be the answer.
CareOne may offer better debt help
Read our review of the CareOne credit counseling services which have been aired on various talk shows across America.
Are sub-prime lenders around in this market?
Find out more about subprime loans and what they mean for the security of your home. Including readers comments on the current crisis.
Bad Credit Card Game to Your Advantage
If you play the game right then credit cards can actually work to your "bad credit" advantage.

Then make a list of the things you don't want. You canuse this list as a guide to rate each property that you see. Theone with the biggest score wins! This helps avoid confusion andkeeps things in perspective when you're comparing dozens ofhomes. When house hunting, keep in mind the difference between"STYLE AND SUBSTANCE". The SUBSTANCE is the set of things thatcannot be changed such as the location, view, size of lot, noisein the area, school district, and floor plan. The STYLErepresents easily changed surface finishes like carpet,wallpaper, color, and window coverings. Buy the house with goodSUBSTANCE, because the STYLE can always be changed to match yourtastes. I always recommend that you imagine each house as if itwere vacant.

Consider each house on its underlying merits, not the seller'sdecorating skills.

4. Don't Be Pushed Into Any House

Your agent should show you everything available that meets yourrequirements. Don't make a decision on a house until you feelthat you've seen enough to pick the best one.

Don't forget to check into the SCHOOL DISTRICTS of the areayou're considering. Information is available on every school,such as class sizes, % of students that go on to college, SATscores, etc. You can get this information from this web site.

5. Stop Calling Ads!

Please note - ads are sometimes created to make the phone ring!Many of the homes have some drawback that's not mentioned in thead, such as traffic noise, power lines, or litigation in thecommunity. What's not mentioned in the ad is usually moreimportant than what is.

For this reason, I want you to be very careful when reading ads.Remember that the person writing the ad is representing theseller and not you! The most important thing you can do is havesomeone on your side looking out for your best interests. Yourown agent will critique the property with an eye towards howwell it meets your needs and will point out any drawbacks youshould know about. So whether you decide to work with me or not,pick an agent you feel comfortable with and enlist the servicesof that agent as a buyer's broker. Then you become a client withall the rights, benefits, and privileges created by this agencyrelationship, and you're no longer just a shopper. Did you knowthat many homes are sold WITHOUT A SIGN ever going up or an ADEVER BEING PUT IN THE PAPER? These "great deals" go to thosepeople who are committed to working with one agent. When anagent hears of a great buy, who do you think he's going to call?His client, who he has a legal obligation to work hard for you,or someone who just called on the phone and said "keep your eyesopen"? So to get the best buy on a property, I always recommendthat you hire your own agent and stick with him or her.

(c) Copyright 2005 Madan Ahluwalia. All rights reserved.

About the author:Madan “Raja” Ahluwalia is an Attorney at Law & Realtor. Rajaoffers his clients a counseling-based approach to home buying,where the client’s long-term goals are the most importantconsideration. He possesses a thorough understanding of themarket and trends, based on years of involvement in real estate.He provides expert insights and helps clients understand timing,pricing and financing issues. Contact Raja at raja@kw.com or650.430.4023.