Secrets to Making a Lowball Offer

As the property market cools down, it becomes a good time for property buyers. If you don't have that much money to spend on a house, but you're absolutely convinced that it's the right time for you to move (or if you've found an intriguing investment property) then you need to learn how to make a lowball offer - and get it accepted. Generally, a lowball offer is 10% or more below list price.

First and foremost, learn what types of properties you're looking for in terms of both the house and the seller.

The House

The properties you're interested in have been on the market more than a month. There's not necessarily anything seriously wrong with them, but they're just not generating much attention. Maybe they're unattractive, in a busy street, or in disrepair. The key is to find properties that maybe need a little repair work, but nothing major. Your lowball offer isn't worth much if you have to spend all the money you saved on structural or wiring work.

The Seller

The seller you're looking for needs to move ASAP. Perhaps they're relocating to a job in another city, or they've already bought another house but want to sell the old one before leaving town. Maybe they're selling the home of a recently-deceased relative, and they just want to get the whole thing over with. Maybe they've defaulted on their mortgage payments and the house is foreclosing. These are motivated sellers and they're more willing to accept a low offer on their property.

The Secrets

Call Merribeth Today!

  317-287-0565

Email: dollarsandsense@tds.net 

• Mortgage Mistakes to Avoid

  Whether you're a first-time homebuyer or need to refinance, it's imperative that you do some research before obtaining a mortgage. Many consumers take the first loan offered to them and end up paying thousands more than they should have. Consider the following tips which will help you to avoid costly mistakes when obtaining a mortgage on your home.

  Shop Around for a Mortgage

  As with any major purchase, it makes sense to shop around. Many lenders often push the loans for individuals with lower credit as there is often more of a payout for them. If you don't know what the common interest rates are for your credit score, you may find yourself cheated out of several thousand dollars during the life of your mortgage loan. By shopping around and interviewing several lenders, you can potentially save thousands of dollars.

  When considering a mortgage loan, you'll also want to ask for a GFE or Good Faith Estimate from the lender. The GFE resulted from the Real Estate Settlement Procedures Act (RESPA) and was developed by HUD to help borrowers determine the cost of the loan. By asking to see a GFE, you'll be able to be locked into an interest rate for a certain period of time should you decide to go with that particular lender.

  Set a Budget to Include Taxes, Insurance and HOA Fees

  Another major mistake that borrowers often make is not budgeting before they take out their mortgage. In addition to the mortgage payment, a homeowner will also have to pay taxes, homeowner's insurance, and possible HOA (Homeowner's Association fees) if one buys a home that's in a development. When these fees are added on top of the mortgage payment, it can really add up. It's often beneficial to have the taxes and insurance on the home included as part of the mortgage payment.

  Don't Spend All of Your Savings on the Down Payment

  A huge mistake that many borrowers make is spending all of their cash on the down payment. Doing this may cause them to not have enough money at closing for the various fees that may be charges and may cause them to not have money for any type of an emergency. Always be aware of all fees associated with your loan before deciding how much to put down. In addition, have at least three months income in the bank for emergencies such as a layoff.

  Don't Borrow More Than You Can Reasonably Afford

  You'll often find that lenders will over-approve individuals for loans. The borrower then takes out a loan more than they can afford. Many first-time home buyers find that owning a home is more expensive then they had planned on. In order to make the mortgage payment, they give up on things like retirement savings and vacations so they do not default on their loan. The lender doesn't care what a homeowner has to give up; they only care that the loan is paid.

  These, of course, are only a few of the potential mistakes you can make when obtaining a mortgage. To get the best terms, try to repair any issues with your credit to help you qualify for a lower-interest loan. You also want to make sure you're in complete understanding on all of the terms of the loan. Do the required research, and you'll find the ideal loan for you.