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The Best Time to Buy Real Estate?
By RealEstateColorado.Net, Inc.

Are you a serious home buyer? If you are, get ready for the best time of the year to purchase.

Between November and New Year's Day, or even Super Bowl Sunday in many communities, you will have little or no competition from other home buyers. Sellers who have their houses and condos listed for sale during this season are usually highly motivated to sell and are willing to make good deals because most buyers are tied up with holiday events.

PLAN YOUR HOME PURCHASE. November, December and January are ideal times to purchase a home. Realty agents and home sellers will treat you like royalty because there are usually few other buyers around.

However, before shopping for a home, shop for a mortgage and get pre-approved in writing by an actual lender. The lender's mortgage pre-approval letter or certificate will help narrow down your home price range and finance alternatives.

A lender's statement you are "pre-qualified." means, We think you can probably get a home loan but it still needs to be approved by an underwriter.

A lender can help you check your credit report with all three major credit bureaus: Trans Union, Equifax and Experian. The easiest place to check your three credit reports and obtain your three credit scores is on the Internet at www.myfico.com. If all three of your credit scores are above 700, you should have no problem obtaining a mortgage pre-approval.

Below 700, be sure to study your three credit reports, especially if you have a low FICO score barely above 600, to check for errors.

Reportedly, about one-third of credit reports contain errors. Be sure to ask each credit bureau to "verify" any items you think are incorrect. If the disputed item cannot be verified within 30 days, by law, it must be removed from your credit report. Ask each credit bureau for a copy of your corrected credit report.



A REAL ESTATE BROKER CAN HELP AVOID YOU FROM OVERPAYING. After you have your written mortgage pre-approval from an actual lender, the next home buying step is to find an expereinced real estate broker.

Ask friends, relatives and business associates for names of trusted real estate brokers who work primarily with home buyers. Although any licensed agent can be your buyer's agent, not all brokers work with buyers; some specialize in only listing properties.

A USING A REAL ESTATE BROKER usually costs buyers nothing extra. The reason is your realtor will usually split the sales commission paid by the home seller to the listing agent.

However, an exception could occur if your buyer's agent shows you a "for sale by owner" house that you purchase but the seller refuses to pay your buyer's agent the customary 50 percent of a normal sales commission. Thankfully, that rarely happens. Be careful buying a home not listed by a realtor. The home owner is not required by law to disclose material defects, but a realtor's are. Usually For Sale by Owner properties are over priced too.

ASK YOUR REALTOR FOR A "CMA." When you narrow your search to one or two homes, before making a purchase offer, ask your realtor to prepare a written CMA (comparative market analysis). This valuable form will show recent sales prices of nearby similar homes.

After you have this CMA information, your buyer's agent can help you make a reasonable purchase offer for the house or condo you want to purchase. The CMA will help avoid offering too much for the home. Also, your realtor will use that CMA to show the home seller why your purchase offer is fair and should be accepted.

ATTACH A REASONABLE GOOD FAITH EARNEST MONEY DEPOSIT. After you decide on an offer price, as your buyer's agent guides you through the process of making a home purchase offer, a significant issue is the amount of your good faith deposit.

As a very general rule, a serious home buyer's deposit should be at least 1 percent of the offer price. A 5 or 10 percent deposit shows serious buyer motivation.

The reason savvy home buyers usually don't offer larger deposits is to avoid tying up a large amount of cash in case a sales dispute arises and the seller refuses to refund the buyer's deposit. The more you out down as a deposit does not mean your better well qualified to buy the home or that the offer is more secure. Most states write language in BUY/SELL contracts that allows buyers several opportunitys to bail and still get thier return of thier earnest deposit.

CONTINGENCY CLAUSES INCLUDED IN YOUR PURCHASE OFFER. As a long-time investor in rental houses, my best advice to home buyers is keep the purchase offer as simple as possible.

The PROFESSIONAL INSPECTION CONTINGENCY. Home sellers are supposed to disclose in writing all known defects in their property which materially affects the market value or desirability. Although it's hard to believe, some sellers "forget" to reveal significant home defects. Can you imagine that?

Well-meaning home sellers often obtain professional home inspections at the time of listing the home for sale and expect their buyers to accept such reports. While smart buyers read and consider such reports, it's best for home buyers to include a professional home inspection contingency clause in the purchase offer.

After the seller accepts the purchase offer, the buyer should hire his or her own professional inspector at the buyer's expense, typically around $ 300.

Buyers and their realty agents should always accompany their inspector for the two to three-hour inspection. The reason is the inspector will gladly discuss any defects discovered, whereas the inspector's report usually just reports the facts.

The toughest professional home inspectors are members of the American Society of Home Inspectors (ASHI). ASHI members must have completed at least 250 inspections, pass a tough exam, and meet continuing education requirements. Local ASHI inspectors can be located at www.ashi.com or phone (800) 743-2744.

If the home inspection reveals previously undisclosed defects, the home buyer can then (1) cancel the sale and ask for a full-deposit refund; (2) negotiate a repair credit from the home seller; or (3) if the seller refuses to renegotiate, go ahead with the home purchase anyway.

In addition to a professional home inspection, home buyers should ask their realtor about other customary local inspections. Examples include inspections for termites (pest control), energy efficiency, radon, building code compliance, well water quality, roof, plumbing, and electrical components. Often, the professional inspector's report will recommend further inspections, which are beyond the inspector's expertise.

SUMMARY: This is the best season to be a home buyer if you can tear yourself away from holiday events. However, savvy home buyers take advantage of the situation by protecting themselves to obtain the best purchase price and terms by safeguarding against paying too much or buying a home with undisclosed defects.

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