Fact vs Fiction: Buying a Home

Buying a home in Louisville, KY is currently one of the most difficult things you can do without proper planning. The inventory of homes for sale in Louisville is very low, which means that multiple home buyers are often competing to buy the same home. It makes finding a home difficult, and then when you actually do find a home, you’re not the only one who wants it. Everyone is trying to buy it. You need market knowledge and a complete understanding of the Greater Louisville Association of Realtors purchase contract, among many other skills, in order to successfully purchase a home and protect yourself from any problems in the future. If you’ve ever bought and sold a home, then you most likely have an idea of what the process involves. That idea needs to be completely wiped from your memory. The housing market is constantly changing, and what you experienced before is nothing like what you will experience in today’s market. Here are some common misconceptions about the home buying process.

If you buy a home through the listing agent you can save money.

It sounds good, and you can even make a good case for why this makes sense, but it’s simply not true. Here are the facts:

  • The listing agent and the seller of the home are bound under a contractual agreement.
  • The listing agreement states that the seller is going to pay a certain amount of commission upon closing.
  • It stipulates that part of the commission will be paid to the agent who represents the buyer, and part will be paid to the listing agent.
  • The commission doesn’t necessarily change when the buyer isn’t represented by an agent.
  • When you don’t hire an agent to represent you, the listing agent now has to do a lot of the work that the buyer’s agent would typically do, but they’re ok with it because they will receive both sides of the commission as a result.
  • Saving money on a home purchase is all about negotiating the twenty-five different aspects of a 7-page real estate contract. Who’s negotiating for you? The listing agent works for the seller of the home, and their job is to get someone to pay the most money possible for the home. Who’s protecting you from overpaying? Who’s working for you?
  • Calling the number on the yard sign in a hot market like this one will get you nowhere. By the time you drive by the home and see the sign and make the call, 5-10 agents have already shown that property to prospective buyers, and if it’s priced right there are already offers on the table.
  • If you have a good agent looking out for you, they will alert you when the home hits the market and schedule the showing for you before it’s too late.
  • Most listing agents will not consider you a serious buyer if you don’t have an agent.
  • Did you know that Zillow is NOT connected directly to the local MLS? That means that it sometimes takes Zillow a few days to even recognize a newly listed property, which means you will never get to see it because it will be sold before you get a chance.

You need to hire a Realtor to help you through the process. A great agent knows that their job is not to sell you a home. Their job is to find you the home that you want in a timely manner, and negotiate on your behalf to get you the best deal possible. Their job is to know the market, navigate and protect you during the purchase, and keep you informed about your home’s value long after you close. These are important things that you simply will not get if you don’t hire an agent. By the way, as a buyer, you won’t pay for the agent’s services. The seller of the home pays both agents. Meet with a few different agents. Interview people and land on who you feel most comfortable with. It’s only the largest single investment you will make in your life. Treat it as such and hire a professional.

You don’t need to apply for a mortgage until you find a house you like.

Untitled designBuyers that are pre-approved for a mortgage present stronger offers. Put yourself in the seller’s shoes for a second. You list your home for sale and after a few days you receive two offers on your home. One of the offers doesn’t have a mortgage pre-approval and the other one does. The dollar amount on the offer doesn’t matter if the home never closes. The only way that the seller of a home knows you are able to buy a home and that it will actually close is if you are pre-approved for a mortgage BEFORE you ever walk into the home. Plus, how do you know what you can afford? How do you know which homes you should be viewing? You will never know the answer to these questions unless you pick a mortgage lender to run the numbers and look at your income. Then you can make an educated decision.

Start your offer low and negotiate from there. You never know unless you ask.

Well, it’s true that you don’t know what someone is willing to take until you ask, but in this current market you won’t ever find out what most people are willing to take because no one is desperate for an offer. Sure there are people right now who simply started their home at too high of a price, hoping for an offer. But if the listing agent has done their homework and knows the market, the home should be priced correctly. If it’s priced correctly then someone is going to offer full price, or even higher. This is another reason you need your own agent working for you. You need to know how much the home is worth before you offer on it. Your agent will run some comparable sales and tell you what a fair price would be. You may have to go above asking price in some situations. If you start too low, the seller may automatically kick your offer out, especially if they have a few others to choose from. If you like the home, pay for it.

There are so many different pieces to a real estate transaction that it’s impossible to list them all here. The bottom line is that you need someone who knows what’s happening, and how to get you to your goal of owning a home. I speak with people all the time who don’t think they could ever qualify for a home, and are surprised when they find out they actually do qualify after I point them in the right direction. If you have ever thought about home ownership, I would love to sit down with you and see if it makes sense for you to buy a home. Please call or email me with any questions at all – 502.509.9278 – justin@metrolouisvillemls.net

You can view ALL Louisville homes for sale at www.louisvillehomeplace.com

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