When a new buyer first approaches their initial Indiana home buying effort, chances are they have only a general idea of what the process involves. Although they are successful people who have arrived at a juncture in their lives and careers where it’s now possible to buy a home of their own, most of the details—and even the terminology—is specific to this single kind of transaction. More than in most other purchases, there are a number of junctures where negotiations determine the outcome.
It’s pretty common to assume that their Indiana home buying venture can be wrapped up with a single offer—one that will either be accepted or not. But along the way, from the home loan provider to the title insurer to the seller, other bargaining points frequently appear.
A first Indiana home buying venture is sure to run more smoothly if these basics don’t come as a bolt from the blue. Most of these five fundamental bargaining point basics might be guessed at, but anticipating them all will put any first-time buyer in a much better prepared position:
• Down payment. It’s not true that buyers must put 20% down to buy a house. Or 10%. The amount of the down payment is a bargaining point with the lender, who usually offers trade-off choices.
• Pre-qualification/Pre-approval. The difference between the two terms can make a difference in how eager some sellers are to talk turkey. Pre-qualified means the lender has received a potential borrower’s information; Pre-approved means the bank has verified it, which presents the buyer in a stronger light.
• Closing costs. The down payment isn’t the only “up front” cost: there are a variety of other home-buying fees and charges that must be paid before the deal is financed. It’s a myth that the seller is obligated to pay closing costs—it can be a bargaining point, though.
• Home inspection. The inspection report informs the buyer what might need to be fixed now or at some future time. If the buyer has made an offer contingent on a flawless report, if problems are identified the seller can offer to correct them, pay a named amount for a cash-back credit—or refuse (a “take it or leave it” stance). In any case, it’s another bargaining point.
• Asking Price/Offering Price. This is the bargaining point that is fundamental in every Indiana home buying venture. The seller can accept, reject, or compromise with a counter-offer. Then again, if more than one buyer is interested in a property, stand back: a bidding war could erupt!
With all these (and there can be more) bargaining points to deal with, a first-time buyer might feel intimidated. That’s where being able to rely on the experience of a veteran Indiana real estate agent is such an advantage. It’s not just that you won’t be surprised by steps in the process—you will have access to the approaches and tactics that have led to success in the post. It’s another good reason why a strategic first call will be to my office!