Posts made by author 'John Loveless'
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Thoughts and Questions to Have During Your Home Inspection
From my experience here in Athens, Tennessee, most buyers show up to the inspection, nod along, and leave without asking a single question. That's where I come in with my questions during and after the process. I don't want them closing on a home with $30,000 in problems they didn't know they had.
Folks, ask questions before the inspector packs up. Don't be afraid, it's your purchase, not mine or the inspector's. Yours!
What is the remaining life of the roof? Not just condition. The years left. A roof with three years of life left is a $15,000- $ 25,000 expense right around the corner. You need to know that before negotiating, not after you move in.
Did you see anything that a general inspector cannot assess that I should have a specialist look at? Inspectors are generalists. They pretty much flag items that may need more thorough inspection. They are not structural engineers, not electricians, not HVAC technicians. If they saw something that gave them pause,...
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What is More Beneficial? A Price Reduction or Seller Credit?
I believe most buyers, in their negotiations, actually negotiate the wrong thing when making an offer to purchase a home. I'll explain...
If you ask for $12,000 off the purchase price of a $600,000 home, you will only reduce your monthly payment by about $72. That's it! Seventy-two dollars.
If you ask for a $12,000 seller credit and use it to buy down the interest rate, you can reduce your monthly payment by $195. Same $12,000. Almost three times the impact.
Here is why the math works out this way.
A $12,000 price reduction on a $600,000 home only drops your loan amount from $570,000 to about $558,600. Spread that over 30 years at 6.5%, and the monthly amount is barely noticeable.
But putting that same $12,000 applied as a seller credit towards buying down your rate drops you from 6.5% to roughly 6%. On a $570,000 loan, that small rate difference saves you almost $200 every month. Over the life of the loan, that's over $70,000 in total interes...
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