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Step #5 of the Home Buying Process - Analysis

Friday, July 19, 2019   /   by Barry Owen

Step #5 of the Home Buying Process - Analysis

Some folks hear this word "ANALYSIS" and say: "YUCK!!" while others respond with an enthusiastic: "YIPPEE!!"
We believe that there is a minimum amount of analysis that absolutely should be done prior to purchasing a house.
For sure, we (your Pareto Realty REALTORs) recommend that you allow us to do a
Comparative Market Analysis (CMA). The CMA is a matter of us going to the Multiple Listing Service and researching sales and market activity of other homes similar in size, condition, amenities, and location to the one you have chosen. We look for homes that have sold no longer than 6 months prior. These sales will help us determine our opinion of the "Fair Market value" of the house, and will give you a good jumping off point for knowing how much to offer. 


Another essential piece involves human to human communication with the agent representing the Sellers. Often, this is a call to the Listing agent of the property to ask some general questions. Our favorite approach is to let the agent know that our Buyer Client has interest in the house . . . "What is the Seller's Scenario?" We usually learn more information than we should because the other agents tend to tell all. Often this conversation results in a conversation with some level of "Prenegotiation." The more information we know of the Seller's situation, the better we can craft an "appropriate" offer. Sometimes, we can get a better (lower) price and/or other concessions when we are willing to meet the Seller's preferred time-line for moving. Is the Seller planning to take all of the appliances? Why and where is the Seller moving? 


Other analysis might be researching nearby construction developments to discover how they might affect the neighborhood property values. We might want to get a copy of any existing neighborhood association rules. We will DEFINITELY want to see a copy of the Tennessee Residential Property Condition Disclosure form filled out by the Seller to tell us of any known defects in the house.  Prior to writing the offer, we like for you (buyer) to review the "Disclaimer Notice" form which offers a comprehensive list of things that may be of concern to a buyer.


And finally, we have access to tax and plat information. In most cases, we will be able to tell you when a Seller purchased the property and how much they paid. Additionally, we can see a plat of the entire area which let's us see what's happening on adjoining properties or other concerns (Flood Plain, Easements, Proximity to commercial operations, schools etc.) 


All of this analysis is essential for negotiating the most favorable terms and conditions for you. Our goal is to be as thorough as possible so as to avoid any unwelcome surprises later in the transaction. When you are comfortable with the neighborhood and sure this is the "RIGHT" house, we will proceed towards making an offer to the Seller. 

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