5 QUESTIONS REAL ESTATE BUYERS USE TO THEIR ADVANTAGE

Get a "good deal" through curiosity, negotiation!

Thanks to abnormally low mortgage interest rates, home sellers had an extremely favorable "sellers market" for the last few years. That means there were more qualified home buyers in the market than there were homes available for sale.

Homes often sold in just a few days or weeks. Typical home sale prices have appreciated 20 percent or more annually for the last few years in the Orlando market. Since 2000, the average U.S. home has doubled in market value, according to the National Association of Realtors.

But the 2006 home sales market pace has rapidly slowed down in most communities, mostly due to rising mortgage interest rates, according to home industry economists. The volume of home sales is the same as last year, however there are 4 times as many homes available on the market today.

The result for this years home sales appears to be more of a "buyers market." That means there are more houses and condominiums available for sale than there are qualified home buyers.

As a result, home buyers can be more selective and negotiate harder even though mortgage interest rates remain remarkably affordable in the 6 percent range. To help home buyers negotiate their best possible sales price and terms, here are the 5 key questions home sellers and their real estate agents hope buyers don't ask:

 1.) WHY ARE YOU SELLING THIS LOVELY HOME?

Even if the home is run-down and shabby, I always try to use that word "lovely" to see if the seller and/or the listing agent have a sense of humor.

The primary reasons the home buyer needs to know why the seller is selling are to (1) tailor a purchase offer that will meet the sellers needs, and (2) determiine if the seller is highly motivated to sell.

To illustrate, if you learn the sellers are moving to a retirement residence, perhaps they will carry back a first or second mortgage, thus creating superb secured income earing arouns 6 percent for them and easy financing for as the buyer. Or, maybe you learn the sellers are in foreclosure so the buyer needs to act fast to close the purchase before the foreclosure action.

Unless the buyer asks, the listing agent is unlikely to volunteer the reason for selling. Occasionally, the buyer will be rebuffed.

2.) HOW MUCH DID THE SELLER PAY FOR THIS HOME?

In most communities, this inforation is a public record, which the buyer's agent can easily obtain. The reason smart home buyers insist on knowing this vital information is it shows how much negotiation room the seller has.

A key follow-up question is, "What is the current mortgage balance and are there any other liens against the home, such as a second mortgage or home home equity loan, judgement liens, and mechanics' liens?

The answer from the seller or the listing agent shows how much cash the seller absolutely must receive. If you learn the home is free and clear with no encumbrances, you just struck gold because the seller can then be flexible as to price and terms.

As a seller, when a home buyer asks me what I paid for the property, I politely reply, "I got a bargain purchase price when this was a run-down shack before I renovated it so my purchase price is ireelevant to today's market value."

If a smart home buyer, and his or her buyer's agent, discover the seller paid a low purchase price many years ago, that means the seller has lots of room to negotiate. However, if you find out the seller bought the house in the last year or two with a large mortgage or two, the seller might not have much negotiation flexibility.

3.) WHAT DEFECTS DOES THE HOME HAVE AND HAVE THERE BEEN ANY RECENT PROFESSIONAL HOME INSPECTIONS?

Home sellers must provide buyers with written home sale disclosures revealing any material facts that affect the home's market value or desirability.

Listing agents obtainn the seller's written disclosures at the time of listing and have it easily available to prospective buyers. Then buyers won't be surprised later by discovering the home has major problems that were already disclosed by the seller.

After the seller accepts the buyer's purchase offer in writing, the buyer should always hire his or her own professional inspector just to ensure that there are no surprises that weren't on the sellers disclosure. If the buyer's inspector discovers any undisclosed defects, then negotiations can be reopened if the buyer included a professional inspection contingency clause in the sales contract.

4.) WHAT PROBLEMS HAVE YOU HAD WITH THIS HOME?

 An open-end question like this will remind the home seller of any problems that, hopefully, have been corrected.

In Floridda, court decisions and statutes do not require home sellers to reveal past problems that have been corrected. But it is still important for buyers to know if those past problems might again become future problems.

5.) WHAT IS THE QUALITY OF THE PUBLIC SCHOOLS?

If you don't have school-age children, it is easy to forget this important question. But top quality schools contribute to home values and future market appreciation. Families prefer to buy in communities with superb public schools and are willing to pay extra for the privilege.

Because most home sellers do not have accurate information on public school quality, the buyer's agent should provide their home buyer with the latest school quality statistics, usually based on the standard test scores and high school garduation rates.

 By clicking on "Area Schools" on this web sites you can also get information on schools in the surrounding counties.

SUMMARY: Home buyers should always ask the five key questions sellers and their listing agents hope you don't ask. The answers help eliminate undesirable homes and maximize the home buyer's negotiation information.

I hope this may help guide you in your buying decision and/or selecting an agent that is right for you. I am here to help you through this process and I would be happy to work with you.