Make Your Buyers Shop Smarter: 3 Tips

DAILY REAL ESTATE NEWS MONDAY, JANUARY 26, 2015 

With a strengthening employment market, many economists are predicting that home buyers will see a much more active housing market in the coming months. Bankrate.com in a recent article highlighted several tips to aid home shoppers in their house hunt, including:

1. Put the ego aside in negotiations, do the math. Your home shoppers need to factor in the low interest rates and how much they could be saving than waggling over a home price that may only be about a $5,000 difference. For example, Bankrate.com notes that at an interest rate of 4.5 percent, the difference between paying $200,000 and $195,000 – with 1.25 percent property tax and 15 percent down – only amounts to about $25 per month on a 30-year mortgage. Is $25 worth it for losing the home they want? Also, mortgage rates are near record lows right now, even below 4 percent. But borrowing costs are expected to move up; Moody’s Analytics predicts mortgage rates will rise to 6 percent by 2017.
2. Avoid big-capital purchases before closing.Real estate professionals say this can quickly delay a closing: Home buyers who go out and open new credit cards and buy up furniture or other items for their new home on debt prior to closing. However, this can raise their debt-to-income ratio. Lenders take that into account when examining the amount of mortgage they can afford. That’s why lenders should avoid moving large sums of money around, changing banks, or changing jobs or becoming self-employed when in the midst of buying a home.
3. Take lots of notes. Several tours of properties can be overwhelming and the homes can start blend together by the end of the day. Urge your buyers to keep a pro and con checklist for each home they view. You might encourage them to create a scale of 1 to 10 to give each home they see a specific rating too. Also, they might want to carry a checklist of the specific features that they desire in their new home to check which qualities each home has. Then, by the end of the day, they have a helpful checklist to remind them of all the homes they viewed. 

View Bankrate’s tips for home sellers in the new year at Bankrate.com.

Source: “10 Real Estate Tips for 2015,” Bankrate.com (January 2015)