Buyers still have an edge, but shouldn't be reckless

March 27, 1994|By Ellen James Martin | Ellen James Martin,Sun Staff Writer

It's still a buyer's market in most parts of the Baltimore area. But with more buyers out searching for property, sellers are coming to assert themselves more -- with fewer desperate sellers, buyers can expect homeowners to hold a firmer line on prices.

Real estate specialists offer these tips for springtime buyers:

* Forget about lowballing.

"In most cases, if you make too much of a lowball offer, sellers will not even respond. They don't want to play that kind of a game," said Chris Tsucalas, an agent for RE/MAX Columbia Real Estate Inc. in Howard County.

Assuming a home is fairly priced, a buyer should usually come within 4 percent to 5 percent of the asking price, Mr. Tsucalas said.

4 * Don't let higher mortgage rates keep you away.

No one likes higher mortgage rates. But by historical standards, rates remain very low and make home finance relatively affordable, said Inez Atchison, a loan officer for the Owings Mills office of NVR Mortgage Finance Inc. In addition, a wide array of new loan products now let you finance your home at rates slightly below prevailing rates for a 30-year fixed loan, she said.

* Don't let the absence of cash keep you out of the market.

Many buyers -- even second- or third-time buyers -- overestimate their need for cash to make a home purchase, realty analysts say. Of course, down payment and closing costs can be steep. But these days, there are a number of new ways to mitigate high cash costs on a home purchase, Ms. Atchison said.

New "premium pricing" loans allow cash-short buyers with strong incomes to pass many of their closing costs on to the mortgage lender in exchange for a slightly above-market interest rate, Ms. Atchison said. There are also new 3 percent down loans available for buyers in low- to middle-income groups, she said.

* Sit down with your mortgage lender before you embark on a shopping trip.

Granted, a real estate agent can help prequalify you financially for the purchase, but it's often better to work with a lender first, said Kay Deitz, an agent at the Bel Air office of Coldwell Banker Grempler Real Estate Inc. You'll save time if you know your borrowing limit and cash requirements from the start, she said.

* Ask your agent to enlighten you on the home-buying process before you shop.

You should sit down with an agent for at least one hour to learn about the major elements in the process, said Beverly Rosen, sales manager for Long & Foster's Pikesville office.

Even if you've purchased a house or two in previous years, you'll need a refresher course on everything from price negotiation to radon testing, Ms. Rosen said.

You should also read through a sample contract and learn more about its provisions.

* Research communities before houses.

Ms. Deitz recommends that you walk around the area on a sunny Saturday and chat with residents out in their yards.

"They'll tell you right away if they're happy with the neighborhood," she said. You can also strike up conversations with local shopkeepers, to see how friendly they are, or go to a Sunday church service in the community, Ms. Deitz said.

* Look for good public schools, even if your plans don't call for children.

"If the schools are perceived to be desirable, that will certainly help in the resale of your home," Ms. Deitz said.

Remember, however, that in quickly growing areas such as Harford County, boundary lines can shift rather quickly. To be sure you'll have a high-quality school as a selling point in the future, your best bet is to live so close to the school that you're not likely to redistricted out later, she said.

* Be sure to engage a professional home inspector to look over the home you've selected.

"A good inspector can find problems even the homeowner doesn't know about," Ms. Deitz said.

Tight on cash, some home purchasers decide to skip over the home inspection, which can run $200 to $500. Or they engage a friend, rather than a professional inspector, to look over the property.

But even if your friend has a solid background as an electrician, carpenter or general home improvement person, he or she may not be able to give you as thorough an inspection as a professional could offer.

The report of a good inspector can provide you an important tool for negotiation, Ms. Deitz said.

"The cost of an inspector can be paid for by finding just one problem," she said.

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