Real Estate Buying Tips

• TIPS ON GETTING PRE-APPROVED WITH AN ALBUQUERQUE MORTGAGE LENDER
• TIPS ON FINDING YOUR ALBUQUERQUE REALTOR
• TIPS ON SHOPPING THE ALBUQUERQUE HOME MARKET
• TIPS ON NEGOTIATING THE DEAL
• TIPS ON PLANNING FOR THE MOVE
• TIPS THE HOME INSPECTION PROCESS
• TIPS ON CLOSING & FUNDING IN NEW MEXICO

TIPS ON GETTING PRE-APPROVED WITH AN ALBUQUERQUE MORTGAGE LENDER

• Get Pre-approved before you start shopping for your Home!
  This helps you to make sure that you are shopping in the right price range. Also, most New Mexico Sellers require a mortgage approval letter before they consider an offer. Even if it's not a requirement, it still makes the offer much stronger.
• Tell your Mortgage Lender your goals of how and when to set up the deal!
  - Do you want to buy a new home before or while in the process of selling your old one? Believe it or not, many people can qualify with 2 house payments.
  - What's your deadline
  - How many years do you plan to own the home that you are buying? This is important in selecting a mortgage program because some programs are better for shorter time periods.
• Prioritize your goals to determine your loan program!
  What are the most important factors to you in your home loan? Most people say that the want the lowest rate, lowest payment and a 30 year fixed loan term. In loans, you can't have it all. Some programs have great low payments, but worse rates and without fixed terms. While other programs have incredible rates with a fixed term, but the payments are higher.
• Loan programs aren't rocket science!
  Don't worry, selecting the right loan program isn't too complicated. Although there are thousands of different loan programs, there are probably only a few that apply to your goals and your borrowing capacity. An experienced loan officer should be able to recommend a simple, small number of options after interviewing you for 45 minutes and pulling your credit report.
• There are no magic wands!
  Most Lenders have access to the same types of loan programs for average or better than average Borrowers. However, some Lenders are better than others at the more difficult loans (called B or Subprime Loans). If you know that you've had credit problems or other adverse qualifying factors, you might want to make sure that you find someone who specializes in the tough stuff. If you're denied by one Lender, try a couple more of these types of Lenders.
• Don't withhold information!
  Hiding information won't help. If you try to hide information it might make it more difficult for your Lender to get you approved.

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TIPS ON FINDING YOUR ALBUQUERQUE REALTOR

• Get the Henson and Preston Team!
  OK, you got us, this is a shameless plug. Call us at 505-822-TEAM to give us a hard time about it!
• Get someone who's honest!
  The honest ones will put your interests before their own and they will be straight with you no matter how much money is on the line.
• Get someone who's hungry!
  The hungry ones are likely to dedicate themselves to finding you a home.
• Get someone who's experienced in the Area!
  It's probably a bad sign if you know the area better than your Realtor.
• Get someone who's full time!
  Nothing against part-time Realtors, but the home-buying process requires a lot of time and attention.
• Get someone who's there for you!
  If you have to leave voice mails every time you call and then it takes a long time for returned calls, you might want to start calling someone else. Pick a Realtor that has good relationships with other Albuquerque Realtors! This will help when negotiating and going through the inspection process.

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TIPS ON SHOPPING THE ALBUQUERQUE HOME MARKET

• Make sure that you are pre-approved before you start your search! Know what you want!
  The more that you can narrow your search, the better. It's tough trying to search multiple areas. So, try to figure out what area you'd like before viewing homes.
• Look for great homes instead of "good deals"!
  Look for good homes that are priced reasonably for the market instead of "good deals". It's currently a Seller's market in Albuquerque, so there aren't many discount purchases to be found in popular areas. If you are interested in achieving a healthy profit when you sell your home down the road, buy in an area that you think will continue to be desirable and appreciate. The old saying is usually right - If it sounds too good to be true, then it probably is.
• Think about resale now because you are likely to have to think about it later!
  If you want a home that is easy to sell in the future, buy something with the fewest "buyer objections" possible. Every home has some "common buyer objections", but some homes have more than others.
• Jump quickly when you find a good one!
  The Albuquerque Home market is still hot. So, many people still lose good homes by waiting to make an offer.

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TIPS ON NEGOTIATING THE DEAL

• Make it a win, win.
  When someone tries to beat the Seller in a negotiation, they almost always end up losing. They pay a higher price than the Seller would have accepted in the first place or they lose out on a great home. Professional negotiators work to set up a "win, win" scenario where both parties are satisfied. Winning in a home negotiation should be defined as Buyer getting a great home at "fair market value" and Seller receiving "fair market price" for their investment. A good Albuquerque Realtor can help you to review the market in an area to determine the ballpark "fair market value". Our definition of negotiation is two parties making a strong effort to try to come together to make a deal.
• Make a strong offer and don't play games!
  Give them something they can sign - If you offer is strong, the Seller might simply accept it instead of feeling the urge to counter-offer.
  On some homes you might have to offer full price or higher. Remember that Albuquerque is currently a "Seller's Market". On many high demand homes and areas, you might have to offer full price or more to get the home. This is especially true when homes are new on the market.
• Keep it "clean"!
  Keep the offer simple. Don't negotiate something "out of the norm" unless absolutely necessary. Sellers (and humans in general) tend to shift their focus to negative items. If you request something in the offer that is out of the ordinary, the Seller might start to focus on these insignificant negative items and this will make the entire offer look worse (Call us if you have questions on which fees are often paid by the Seller and other common Albuquerque Purchase agreement terms).
• Don't justify your offer!
  Your offer should be strong enough on its own and not need justification. This is a very common mistake in negotiating. The Seller is not interested in your reasons that you have for offering less on the home. As a matter of fact, Sellers are proud of their homes and usually take it personally when someone starts taking shots at their pride and joy. Simply make your offer and wait for a response.
• Don't talk to strangers!
  Avoid talking with the Seller or the Seller's Agent about negotiation items. It's nice to have the Real Estate Agents working as a buffer for negotiations. When Buyers talk directly with Sellers or their Agents, someone might get offended and blow up the deal.
• Trust the power of the pen!
  Always put negotiations in writing. Verbal negotiations have a strange way of falling apart quickly. Even worse, you might think you have a deal, but neither side understands the terms of the deal. We have seen many people have convenient memory lapses.
• Be reasonable man!
  Try to keep your emotions out of it. Many deals are lost over silly things and small amounts.
• The million dollar question;
  "So, how much $$$ do people usually negotiate" in the Albuquerque Real Estate Market?
  This is a tough question and we get it a lot. We can't give a straight answer because it varies on every home. However, we can give you the averages of what we see in our market. In the current Albuquerque home market we see Buyers and Sellers negotiating an average of around 2% or less off of the purchase price (this is a VERY ROUGH average based on homes that have been on the market for around 30-45 days. This is not a scientific calculation. It's simply our best guess.)
• Respond quickly to counter-offers!
  Keep in mind that when an offer or counter offer is made, it can be withdrawn while awaiting a response. Even though the standard New Mexico real estate forms provide a deadline for offers, the party awaiting a response can still withdraw their offer before the deadline (if they have not yet "received" and "accepted" your response).

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TIPS ON PLANNING FOR THE MOVE

• Always have a backup plan!
  In New Mexico Real Estate, all trains don't always arrive on time. Closing delays can be caused for many reasons (just to name a few - Mortgage Companies, Title Companies, Realtors, Appraiser's, Home Inspectors, Home Repair Contractors). So, don't kill yourself to meet a rigid moving schedule. We've seen many Buyers make poor decisions on home inspections and repair items because they're not willing to change their moving plans to get problems solved correctly before closing. The best way to avoid problems is to give yourself plenty of time to make the move.
• The Devil's in the Details!
  Try to get the small details like setting up phone, electricity services, & cable install appointments before moving into the home. These service providers usually take a week or more to get into the home for install.

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TIPS THE HOME INSPECTION PROCESS

• Get at least the basic inspections!
  There are many choices of inspections in New Mexico Real Estate. We recommend that you get the following two inspections at a minimum:
  - Get the home inspection and warranty for piece of mind. In Albuquerque Real Estate transactions it's common for the Seller to pay for a "Full Home Inspection"& one year Home Warranty. Pick a Company that you think will do a thorough inspection and stand behind their Warranty.
  - Get the "pest inspection" (also called "wood destroying insect inspection") and dry rot inspection to ensure that the home is clear of these problems. Don't panic if problems are found. They are usually easy to cure.
• Don't put too much faith into the home inspections and home warranty!
  Home inspections are good, but they don't cover everything. Don't assume that the home inspection and home warranty means that you won't have any problems after moving into the home. The home warranty Companies can usually give a sample home warranty. Read your sample home warranty contract carefully to see what it covers.
• Be reasonable if you have to negotiate repairs!
  - Try to set up a solid repair budget in your offer on the home. This will help to prevent problems later in the deal. There is a place in the standard New Mexico Real Estate forms to include a "cost of repair" allowance. This is where the Seller agrees in advance to complete any needed repairs that are brought to light by the inspections. The average amount recommended by most New Mexico Realtors is around $500. Our team usually recommends a higher amount depending on the condition of the home.
  - If the necessary repairs exceed the "cost of repair" allowance, then Buyer and Seller usually go back to negotiating.
• Beat Deadlines!
  That's right, the Buyer and Seller actually have deadlines in the standard New Mexico Real Estate forms. If you don't meet deadlines, you might be giving the Seller an excuse to leave one of their obligations unfulfilled or to cancel the contract without penalty. You might also lose your earnest money as a result of missing a deadline (We are talking worst case scenarios here. There aren't always penalties for missing a deadline. Sometimes, nobody notices that a deadline has been missed at all, but better safe then sorry). Make sure that you and your Realtor are on top of the process!

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TIPS ON CLOSING & FUNDING IN NEW MEXICO

• If you're a reader, go early!
  The Title Company usually does a good job of explaining the high points of the paperwork. However, some tough consumers still want to read everything in the closing docs. If you are a reader, you might want to ask the title company if you can show up an hour early to closing to read the package (you should still keep your original appt with the Title Company for them to explain the paperwork and to complete signatures).
• Make yourself available!
  It's tough to set up closing appointments because the title company is usually very busy. So, try to make sure that you keep your schedule as flexible as possible. If closing is delayed, then you might have to change your appointment.
• Compare the estimate to actual costs!
  Take your "Good Faith Estimate" to closing. This is a good way to compare your actual loan fees to those that were quoted to you by your Lender. Make sure that your total loan fees don't exceed your most recent fee quote from your Lender.
• Show me the money early!
  - Hopefully, your Lender can provide you with your required funds to close amount at least a couple of days before closing. If you are getting a cashier's check, this will give you time to get to the bank early. Take the cashiers check with you to closing.
  - If you are wiring funds for closing, you should wire the funds to the title Company before closing. It might take up to 24 hours for the wire to go through.
  - If you are selling another home before buying in Albuquerque, you can ask the first Title Company to wire your closing funds to the second Title Company. This is a convenient way to get the funds over quickly for the purchase.
• Take your personal checkbook to closing!
  If there are any small accounting changes at the last minute you might have to come up with some extra funds. The New Mexico title companies will usually accept personal checks for amounts under $500.
• Two key documents to review more carefully at closing!
  Obviously all of the documents you sign at closing are important. Many people key in on the following two because they contain a lot of the meat of the deal.
  1. The HUD1 Settlement Statement - This usually the first form that is explained at closing. It contains your closing costs and your escrow deposit and prepaid items.
  2. The Note - This describes your loan terms (ie. Fixed rate or adjustable, amortization period, whether or not you have pre-payment penalties etc.)
• The end of month myth!
  No matter what you've heard, it IS NOT advantageous to close toward the end of the month. You're going to start paying interest on your home immediately, regardless of when you close (Most loans are set up to have the Buyers prepay interest through the end of their closing month. Then the Buyer's first mortgage payment is due 30 days after the end of the closing month).
  Closing at the end of the month can be stressful and increase the chance of mistakes because the Albuquerque Title Companies are overwhelmed with business at the end of the month. So, it's actually better to close at the beginning or toward the middle of the month.
• Don't rush closing!
  In your initial offer, try to give enough time for the inspections and loan process to occur. Even if you are paying cash, you still should give about three weeks to complete inspections and any needed repairs. You should give about 4 weeks to close if you are getting mortgage financing. Everyone wants quick gratification, but it pays to give yourself enough time to go through the pre-closing process. It means less stress and a better chance of getting all the inspections, repairs, & mortgage loan done correctly.