Well, buying a house for most people is the biggest purchase made in a lifetime. Without question you want to get that purchase right here today on prudent money is real estate professional carolee Gurney here to tell us how to do it the right way. carolee Welcome to prudent money. Thank you glad to be here, Bob. We'll start off by talking about some common mistakes that you see people make when buying and selling a home. Well, oftentimes people aren't considering what the value is going to be that home when they're ready to resell it.

So that's one really important thing is are you looking at things that are going to be important for the resale? Are you just looking at the things that you like, and they're going to be there a long time, it might not matter so much, but if you think you might sell in five to seven years, you might want to consider where you're where you're going to be locating? Well, depending on where you live at any given time, you could be facing a market where the buyers are in control or a seller's market where sellers are in control. I would assume that you have to approach to house buying process a lot different when you're in a hot market? What are some differences in preparing to buy and sell a home in a hot market versus a market where buyers are in control? Well, if you're the seller, you don't have to do quite as much.

And obviously, if you staged the house nicely and you have clean lines and have good curb appeal, you'll probably make a little bit more money on it than you would if you didn't do that. As a buyer. You don't get to be as choosy in a seller's market when it's, you know, this crazy market like we've been having. You have to subtle, a little bit a little bit more and maybe even subtle, more on the location than you would if you were out buying in a normal market. Well, obviously, no one should try to buy and sell a house without the help of a realtor. Talk about what you were looking for when you're selecting a realtor.

Well, ethically is one of the reasons One of the things I would look to choosing a realtor. You want to find someone that's going to be honest and upfront with you. I'm not afraid to To tell a buyer or seller what I think and whether or not they should be in a certain area. And I think that's important to have someone that has that honesty and integrity when working with you, because it's really all about the buyer or the seller. It's not about the agent and the kind of person that you need to find to work with you. And then also someone that has experience knows how to market in this type of market that we have going on these days.

Well, there are a lot of different ways that a realtor can market a house. They can do it as you know inexpensively as marketing through social media taking out a full color ad in a real estate magazine. What kind of marketing efforts could a person expect from the realtor? And are there costs associated with the these marketing efforts that will be charged back to the seller? That's a good question. And honestly when I'm working with buyers and sellers and I think most agents are this way, they they pay for that marketing, that's what you're getting with the commission that the seller is paying towards that realtor.

So and you can expect depending on the type of house the size of the house And the price of the home, different variations of marketing. But today's times we're seeing more and more online. buyers and sellers are online looking for that next dream home that they're going to move into. And so we've got to be right there online with them. Which, coincidentally, coincidentally happens to be a less expensive way to work. Well, obviously you want your home to be as marketable as possible.

At the same time, you don't want to sink a lot of money into your home while you're prepping for sale. What are some non negotiables when prepping your house things you definitely want to do and what are some of the things that you see people do there quite frankly, it's just a waste of money. Well, I'll be honest with you, the more you do the house the better but there are some things that are easy ways to stage your home and I'm actually a picky realtor. When it comes to my clients. I like houses clean, very clean line so very little clutter. None of us cost you any money to have your house clean your lights on your things put away and Even having your closets organized as are all really important things people do look in your drawers they do see you've left your night got night guard in the door without putting it in a case.

Unfortunately, they're going to look at the the space that you have the cabinetry, you have the closets that you have because they want to know if their things are going to fit in your home. And so you can't really bypass that. Those things need to be done. If you're going to put a little bit of money into that I do. I do suggest investing in the yard, your landscaping, your drive up appeal, making sure your front door looks clean and crisp. So waste of money would be overindulging on the type of counters that you're going to put in the home or spending money painting your cabinets when maybe they don't need it.

The most important thing is to have clean lines, have your house staged and have it have all the clutter put away and give you a good example. It's kind of a fun story about a house I drove by one time I was listing the house next door Bob and I decided you know i House poor doesn't look good. And the house next door is going to keep the house on I'm listing from selling. And I actually went over there knocked on the door and asked the next door neighbor if they'd be willing to let me paint the front door and I have my painter go over there and paint their front door and it didn't make a difference on the appeal of the neighborhood when people that's going the extra mile for sure. So you know, pricing a house is something that you have to get right.

Take us through the process of pricing a listing. This is one of the most important things there's three things to look at when you're trying to sell a home it's going to be your location which you can't change and it's going to be the condition of your home which you can or can't change depending on the layout. And then the third thing is the pricing that the pricing is most important because whatever you have, whether it's location or condition that you're going to be competing with, you've got to have the right price and when I price I price three different ways like I when I kind of have some fun with it. I run the neighborhood comparable pricings and I've been Bring them with me. And I actually go ahead and write a number on the back of those of what I think that house might might be listed out.

And I'll go through each of those with my clients. And then we'll talk about, okay, we could price it really high. And then let's just pray that a buyer comes in and buys your home. Or we could price it low and maybe create a frenzy because you know, buyers see value in a home that's priced below market, or we could price it just right. And usually when you price it just right, you seem to sell it in the right amount of time. That's reasonable and most efficient for the client and bring in the most amount of money.

So I usually talk about all three of those ways. And honestly, you can go with the latter to either one of those words. You know, in some of these real estate shows, you'll often see the realtor price the property like you're talking about below market value to start a bidding war. It would seem to me that that could be a risky move, given that you've listed below market value. And you know what if the seller the seller fails to get a bidding war started. I have to agree with you and doing this lower cost is a risk.

Now sometimes it works. Oftentimes it works. You might not get as much money as you'd hoped for if that multiple offers, but there's multiple buyers don't come in. So it is a bit of a risk I pretty much like doing the pricing the right amount unless you need to sell and get out of a home in a hurry. And that difference in price isn't going to necessarily make that much of a difference to you. Well, let's talk about a bidding war from the standpoint of a buyer in order to get the home How do you know how do you know how much to bid over the sales price?

That's always a guess to be honest with you because the more I've seen anything from 2000 over list price to 30,000 over list price. And you never know how many you're going to have. Now when I when I happen to ask an agent and they are willing to tell me how many offers I have I can kind of gauge going a little bit more when I know I've got 2425 offers to compete with If you've got that money to compete with, you're gonna have to definitely jump on the high end. And you're normally competing with cash offers and investors when you're getting to that point. Let's say that a seller receives a full price offer on a house and the seller is hoping to start that bidding war. How long does the seller have before they can give a yes or no on the offer?

You know, while waiting to create a bidding war, you know, there are a couple things you can do here. Sometimes people will say, all right, I've submitted an offer and, and in a normal market, and if you only have one offer, it's it's etiquette to do it within 24 hours with some kind of response. Now, if you're expecting multiple offers, and when you know you're probably going to have multiple offers, a lot of agents will go ahead and write an MLS they're accepting offers up until a certain amount of time so sometimes that might be okay. It's today we're putting it on the market Thursday, and we want all offers in by Sunday night. So you can put a time limit on it and let everybody know or you can respond to that first offer within 24 hours or views Get one offer and then you realize some others are coming in, you can extend the time a little.

Now you've got other offers coming in, and you're going to wait until whatever day and time that you want to. Now carolee, where does the market the mortgage approval process fall on the timeline of buying a house, that should be upfront Bob, I don't take any any buyers out that don't have a pre approval letter with them for me to take because they may fall in love with something and we want to make an offer and you can't make an offer. Without that pre approval. If you don't have it, then we have to wait on it to make the offer. And you may lose the house because of that. So it's best to have all of that done up front.

And there are a couple ways you can do it, you can actually get a pre approval that's just the fast and skinny. So I so I would say which is usually done without a credit check and take that with you and that gets you in the door. Or you can go ahead and go through the process of having a full approval, which is usually conditional because you got to wait until closing them to verify all those numbers but on that condition approval is further. And a lot of times, agents that are looking at offers will tend to lean towards those offers that are that have a further conditional approval as well, the timing in buying and selling a house can be dicey, you know, in a hot market, what advice would you give to someone who wants to sell their house and buy a house at the same time?

That's a great question. And we do have people that want to do that we have some people that aren't comfortable making an offer on another house until they've got their household. So there are lots of different ways that you can go about it. But if you want to do both at the same time, it's a good idea to go out and find the house you're interested in and see if someone would be willing to do a conditional, excuse me, not conditional a contingency on that property, meaning that they would have to sell their house in order to close on that house. And it's just dependent on whether or not an agent will accept that we're starting to see that they are accepting contingencies more these days than they have been in the past few years. But that was kind of a gamble.

The other thing you can do is sell your house, you know, get your contracts on it and then go out and find a house why you've got a contract on your house, and then that will usually tend to work out as well. Well, the Home Inspection can be stressful because as a seller, you never know what might come up, who actually now select Inspector? You know, that's an interesting question. And I've used the same inspector on most of my inspections for nearly six years now. And typically what I do is I have a list of preferred partners that we use, and I include my home inspector on there, but I always give them the option to use whoever they want. That should be the buyers choice on who they use.

They need to trust that person, but if they don't know someone, I always am happy to recommend one to them. Well, in the home inspection process, let's say that the inspector comes up with a list of issues that need to be addressed. Can the buyer expect to get all those issues fixed or should the buyer be reasonable and pick and choose Unfortunately, they can't expect to get everything that they want done. And typically when I'm talking with a buyer about a home inspection, and I actually contact them ahead of time and let them know that I had to do this yesterday, I'll call the buyers and say, Hey, we're going to do this inspection. And here's how it's gonna go. Client spectrum will be there.

And we'll meet him at the end of the inspection to go over his report. And I'm going to take notes on his report as he goes through it with you. And what I'm looking for are things that are either going to be dangerous, or expensive, because we really don't want to wear a seller out now. There's some things that we can throw in there, like maybe there was an electrical issue. And while the electricians there, he could go ahead and pick something else that's on the list. And then we'll go ahead and include that.

So really, I'm looking for things that are going to be expensive or dangerous. And when you're looking at a home inspection report, Now carefully Are there any cases at all when a buyer actually four goes the inspection process? I've only had this happen once, and I highly advised against it. And I'll tell you why I happen to be on vacation out of town traveling when my buyer wanted to go see a home. And so I sent another agent over there just to show him since I couldn't be there. And he was coming in from California and was want to have a home inspection because they do things differently in California and don't use a home inspector and his his neck of the woods, I guess I should say.

And But anyway, he didn't have that done. And so when I went back, and I was back in town, and we were going over there to do the walkthrough when he happened to be back from California, and it was not in good condition at all. We really had to fight for some things with the seller at the end when we had if we'd done the Home Inspection in the first place. Those things would have been noted and negotiated up front. Now foundation issues now that could be a real deal killer as a realtor, how do you advise your client if foundation issues are discovered? Well, this is Texas so we run across Quite often, and actually, you know, it's not necessarily a bad thing.

As I mentioned, it's it's really prominent in our area to see that happening. So if the works been done, and there's 100%, transferable warranty, I kind of like to say it's nice to know what you're getting. Otherwise, if you don't know there's any foundation issues and you move in and they show up, you're surprised. You're not surprised when they've already had the work done. And you know what to expect. And doesn't mean that you won't go further down the line and something will still kind of adjust with the house.

But you know, that the majority of the work has been done and quite frankly, foundation work is really expensive. So, if you know it's been done, it's really not that big a deal. If you go into a house and it's really messed up and the sellers not willing to work with you on it, then that's something I'd be more leery of. Well, carolee great information and I appreciate you taking the time to educate, educate us on the process. As you can tell the process of Buying and selling a home can be tricky. The key to being successful is hiring the right realtor, as well as the right mortgage consultant, and most importantly, follow their direction.

If you have a question for carolee you can always go to prudent money calm and use the instant messenger feature to ask your question. Cara Lee is a prudent money contributor for the site and the radio show. Well for more information about Cara Lee, you can also go to her website carolee gurney.com