Buyers Guide to finding a home
There is a tremendous amount of effort to get yourself set for probably the biggest purchase of your life time. You have been diligently reading all of the articles, watching all of the youtube videos and maybe a ton of HGTV. Uncle Joe probably gave you all of the buying advise that his dad gave him, you have probably paid down a huge chunk of debt and managed to get that credit score up, it’s safe to say that you have done your homework.
Many new buyers enjoy the convenience of shopping from their couch, letting the internet do the walking, most buyers begin their search online with many of the major online sites, and yes you are like many Americans that shop this way, from sneakers to new homes. This energy is nothing less than tenancies. I would describe it as fierce determination.
These are worthwhile steps of traveling this journey, however you have decided to call 300 different listings and spoke to 300 different agents. The trouble in this is that one agent can fulfill all of the tour request. 300 requests for 1 agent, not 1 agent for every listing. Realtors do not earn a dime until your deal is done, whether its day 30 or day 500. Realtors earn commission based on the agreement that the seller makes with the seller agent.
You guessed it, that Realtor that has been driving around town for 2 weeks, battling for tour dates and politicking with the listing agent does not get paid for the gas or time. Most Realtors like to be efficient, most Realtors want to show as few homes as possible. Realtors commission can vary, typically 3% or less. Realtors then pay 30-40% of their commission to their sponsoring broker, desk fees, transaction coordinator, taxes, photos, marketing etc, so as you can see each deal is worth considerably less than what you may think.
After learning this, buyers needs to complete the most fundamental task of Home shopping, and that is to get a pre-approval letter, not a pre qualify letter. You and your Realtor need this document to determine what parameters to search for. Realtors need to know the terms if any and contingencies noted. Realtors need to know if your deal is VA, FHA or Conventional. NOT ALL HOME SELLERS ACCEPT ALL LENDING. It is critical to know this before spending countless hours of research and tours. You will have wasted a lot of your time.
Your pre-approval indicates your readiness and your willingness to be a part of something spectacular. Your approval needs to be ready at any moment to make an offer. You can bet that many of the same people that you are competing against have got theirs and are willing to offer within 2 minutes after seeing the property. 90% of most agents won’t show you a property without an approval, the 10% that do are probably showing you the property because they believe in something that you have said to them . Others may just have an agreement with the Ad company to show you at least 1 property as a condition of your partnership.
1. Find a Realtor
Realtor has Lenders that they know/Find a Lender
2. Prepare your finances:
Lender will provide you with closing cost and down payment required LOAN ESTIMATE
1% of the offer must be applied to the purchase amount 700 home = 7 Deposit (EMD) REFUNDABLE.
$450-600 for Home inspection NON REFUnDABLE
$500-700 for the Home Appraisal NO REFUNDABLE
Entire amount due within 25-30 days.
3. Understand that you should buy the house that you can afford, if the budget says 450K, then it’s definitely a good idea to stay within your range. If you can afford a 7 bedroom, its ok, get what you can and build equity for the next go around…you will thank me later.
4. Be flexible and reasonable, don’t expect some stranger out the goodness of his heart sell you a home with 100 K of equity. Why would anyone give you something worth a lot more for less.
5. COMMUNICATE EFFECTIVELY should have been number 1. You have to let your Realtor know if things have changed, maybe you have decided to drop out the market, or switch areas. Your professional Realtor truly wants to close a deal for you and in the interest of fairness, Buyers should let them know their purchasing decisions.
6. Send Referrals, call the agent back in 4 years when you’re ready to sell, most often they will give you a great deal on the listing price because of the kinship.