Ask Austin James Show – Episode 1 – blog
What’s up, everyone? This is Austin Frangoules your local real estate agent here in Hampton Roads. This is the Ask Austin James Show where you ask me real estate questions and I answer them, so, let’s get into it.
Hey Austin, my name is Hannah and I’m a first-time home buyer. We just left a property and we really like it but feel it’s a little overpriced. I’m just wondering if you have a recommended strategy on what to do when you’re placing your first offer on a home.
Great question Hannah and a lot of first-time homebuyers come across this problem. The best thing to do is talk to your real estate agent. They should be the expert in the area, they should know all the home values. If you feel like it’s overpriced ask your agent, be like do you think this is overpriced? What they should do is they should run a comp analysis to figure out what the home values are and from there you’ll be able to figure out if the home is actually overpriced. Let’s get into the next question.
Hey Austin, I’m in the process of purchasing my first home and was wondering at what point is it too late to back out? Thanks
Hey, Elizabeth, thank you for asking that question. So, a lot of people come across this as well, that’s what contingencies are made for in contracts. The biggest one that a lot of people can get out is the home inspection and then along with the termite inspection, if problems arise during an appraisal there’s always an exit point around there if the appraisal comes in too low because the lenders aren’t going to give you more than what the house is actually worth.
Now if you decide to go past those options, then that’s where it gets a little tricky. To actually put in an offer, you have to put down an earnest money deposit. It’s usually between just say somewhere around $1,000 or like 1% of the purchase price of the house. If you go past all those contingencies and then decide you want to walk away, then you’re going to lose that earnest money deposit and that’s a problem.
And then also you could come into problems later if it’s like a couple days before closing, then that’s where bigger problems arise. So, if you wanted to back out, really do it during that contingency period because then you’ll actually get that earnest money deposit back and that’s the best option there. Let’s get into the next question.
Hey Austin, so my wife and I have been renting our apartment for about 2 years now and we’re looking to buy our first home. We’ve been looking now for a month, month and a half, and we’re just having a hard time determining whether or not the property that we’re looking at is a good deal. So, if you have any tips to help us out, that’d be great. Thanks so much!
Hey man, thank you for calling. First, that is super awesome you guys are thinking about buying your first house. Renting, you’re basically just throwing your money out the door and buying your first home is a big step. So to find a house that is a good deal is really a relative question. It really depends on what you’re looking for. Are you looking for a “good house” in a “good neighborhoods?” Are you looking for a house that needs to be fixed up? Are you looking for a house that is foreclosed on? Or are you just looking for a house that seems like a good deal? Really the houses that look like good deals in good neighborhoods are houses that need to be fixed up and they are that price because they need to be fixed up. So, if it’s $30,000 less than normal prices, then it’s probably going to need $30,000 worth of work to actually get that house up to other houses values.
So, really in my experience, getting a good deal on a house is what you can negotiate in the contract. For example, the last house that I just put on a contract, we got the price down $2,500 which was great. We got included a fridge up to $2,500, a washer and a dryer set which is awesome, we‘re getting the seller to agree to fix all of the items in the house, we’re getting them to fix the drainage problem on the side of the house, then a 1 year home warranty and all the buyer’s closing costs covered. In my opinion, even though it was only $2,500 less, that is great a deal for what we got included! They got all these things included inside the house, which is amazing and not many realtors can do that. So, talking to your realtor and seeing what you can get included in the house rather than just knocking the price down is best option to go.