Every home buyer doesn’t want to get ripped off when it comes to securing a home loan. It is thus important you know whether you are getting a fair deal or not. Here are a few tips on how you can know whether you are getting a good deal.
Know Exactly What a Good Deal Means
You need to determine what a good deal means. Is it acquiring the home you have always been dreaming of and at an affordable price? Is it about getting a discount for the price you have quoted? Once you know what constitutes a good deal, you can confidently enter into an agreement with the seller and financier without worrying about anybody shortchanging you.
Research Similar Properties Recently Sold
You need to look for properties similar in size, neighborhood, amenities and condition that were recently sold and compare their prices. A property with similar features should sell at the same price, especially if it is located in the same area. Even if the prices do not match, the difference should not be huge.
Compare Mortgage Rates
You need to compare the mortgage rates of different financiers. Just because your bank agent talks to you nicely and promises you a huge loan does not necessarily mean this is the right choice for you. You need to compare at least three mortgage loan offers from different lenders and compare their rates. Make sure you choose a lender who offers rates that you can comfortably pay every month.
Factor in Market Dynamics
You need to study the market dynamics. Sometimes the dynamic may indicate an upward trend in prices in your neighborhood. What seems like a fair deal based on past prices may be even better than what you think. If you are buying at a price meant for the previous two years, the house could be even more affordable than it may have been in a particular period of time.
Test the Seller
You can make an offer that is far much below the market list price to determine the seller’s reaction. Some sellers list with the lowest price to avoid price negotiations. Others list for higher prices than what they expect to allow for some negotiations. If a seller accepts your lower offer, then it means you have found a good deal.
When you are on the market for a new home, it is vital to gain a deeper understanding of how are priced so that you can know whether you are getting a good deal or not. In order to understand pricing, you must compare mortgage rates, test the seller and factor in market dynamics.
Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor's Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn't on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on Twitter and Facebook: @RachelleWilber; https://www.facebook.com/profile.php?id=100009221637700