On the East Coast, we had bought one home and sold it 3.5 years later after we moved to the West Coast.
On the West Coast, we've bought two homes: one before the pandemic and one after the pandemic.
Each time, the process of buying a home was stressful
What to Prepare Before Picking a Realtor to Buy a New Home
From what I can see now and for the foreseeable future, there is no shortage in REALTORs so finding a REALTOR is the easy part. We like to find a one who has been active in the business for decades because they know more about the area and have a finesse about them. All of our REALTORS have not only been active and successfully selling and buying property for their clients for decades, but they were all also brokers who owned their own office with employees.
Typically, you'd need a pre-approval letter from a bank or mortgage broker to see how much money you are allowed to borrow in order to efficiently narrow down your price range and provide this information to your REALTOR.
Guessing how much you're allowed to borrow is a big no-no. Having that official pre-approved letter will save you and your REALTOR time now and when you're ready to put in a offer for the home you like. Once you're ready to ink that offer with your signature you'll need to be sure that you can fulfill your compelling offer. The seller won't want to waste their time with someone they're not sure can afford to buy their home and they'll usually want to sell it as soon as possible.
If you're a military veteran like my husband, make sure to check with USAA to see what kind of veteran or military special loans you can get or are eligible for. If you decide to use a different bank or mortgage broker, they'll usually ask you if you're a veteran as well, so that they can find the best loan rates for you.
Besides getting the proper pre-approved letter ready, I want to say that you'll also need to get emotionally and mentally ready because once you start searching for a home, finding one you like and then, putting in an offer, that's when the emotional roller coaster starts to take place. The waiting game of waiting for an answer, the negotiation that takes place before getting an acceptance, taking care of the legal stuff and all the other construction or home improvement projects that are going to line up will take over your life for an extended period of time!
Best Resources to Search a Home
With online technology nowadays, your search is no longer at the mercy of your REALTOR because now all active MLS listings are available on the internet for you to look at. Zillow, REALTOR, Redfin, Trulia are just some of many online websites you can use to search for homes on sale and see their pictures.
You can provide the range and information about homes that you're looking for. For two of the three homes we bought, we've found them ourselves and then brought it to the attention to our REALTOR so that they can unlock the lockbox and let us see it. The only time we didn't need someone to open the door for us was when we went to an Open House, which we found out through Zillow by ourselves anyway.
Even though you can search homes online yourselves, having a great REALTOR can be very beneficial. The importance of having a REALTOR, especially an experienced one, is their connection to the community, handy men, the city government and their negotiation skills. They can read between the lines and counteroffers very skillfully and help you make a smart decision and deal.
Making an Offer or Deal
During the pandemic, when the interest rates were low, many people were buying homes around our county and our friends struggled to find one where it wasn't snatched up so quickly. Even my son's teacher had expressed to me how frustrated she was when she made an offer on a home for over asking price and still not get it accepted, losing out to someone who offered over $100,000 above the asking price. It was pretty nuts! Now that the pandemic is over and the interest rates are very high, I don't see that issue anymore.
When you're ready to put in an offer, your REALTOR (buying agent) will draft up an agreement and then have you sign it, attaching a check (or wire directly) as earnest money. The typical amount of this earnest money varies from your geographic location/market and the general rule of thumb was different when I lived on the East Coast (considerably less) compared to the West Coast when the amount was more. Surprising, it's not a straight-up percentage calculation like many of the online articles would say from what I've done and seen in reality. Maybe this is different in your area. Your REALTOR will help you with what the appropriate general amount should be. After that has been discussed, she/he will meet or email the offer and earnest money information over to the other REALTOR, who is in charge of selling the home (listing agent) and usually, they'll get back to you within 24 hours. In your agreement, you can state the timeframe you'd like the seller to respond within so that you can focus on finding a different home and not be waiting around too long.
For two of the three homes we bought, we put in an offer that was less than their asking price. Both times, they counter-offered with something higher but still below their asking price. That's a good sign as that means, there are no competing offers at that very moment. That also means there can be some back and forth negotiating and for me, this process was quite stressful. It was like a game of ping pong with hours of waiting time in between hits.
Home Inspection and Termite Inspection After Accepting Your Offer
After they've accepted your buying offer on the house and it's in ink, your REALTOR will suggest a list of home inspection and termite inspection companies so that you can get professionals to look at your home and see if there are things under that surface that are broken or problem areas that need to be fixed before you officially buy the home. You don't want to move into a home to later find out that there is a huge rot issue or some other detrimental issues. Every area has a different list of to-dos that you'll need to be mindful of. Usually your REALTOR is the expert with these things and will guide you in the right direction.
Every time, we've gotten a home inspection, there's always something that needs fixing. It was never a perfect inspection for each time that we went through this process. We had to come back to the seller (through the REALTORS) to list those items from the home inspection to request them to fix it. There was only one time that the seller fixed the issues before our closing date. For the other two, they preferred to credit us the cost of fixing those items instead so that we'd be the one to fix it after the house closes. When this happens, this does add another layer of stress to you as a buyer because now you'll have an immediate list of home improvement projects to tackle right away before moving in.
Waiting for the House To Close
If the home inspection is looking good and/or you've worked out a credit deal to cover home issues from the home inspection, it's time to tell your bank/mortgage loan person that you're ready to move forward with buying the home so that it can go under escrow. This typically took us a month but it could be longer, depending on the company you went with. During this time, it's a good idea to get those home improvement projects a lot of thought to figure out the time and budget to focus on them.
This is also a good time to get those household items in boxes to prep for the move so that it's not so overwhelming last minute! In the past, I'd put a couple decent items I didn't need anymore for sale on Craigslist and Facebook Marketplace every day during the waiting period and made some extra cash. It was quite fun and I didn't have to dump them in the trash. With Venmo and PayPal, you don't even need to even see the buyers in person. Just have them send you the money online and leave the things out on the porch for them to pick up around that agreed time. Because of the pandemic, no-contact transactions have been becoming quite normal and expected.
Closing Day and Getting the Keys
Before Closing Day, there will be a lot of papers to read and fill out! It'll cover how you're going pay the seller, any credits towards fixing anything and a lot of legal information. You'll be talking to your REALTOR and mortgage person a lot for the weeks leading to closing day. On the East Coast, our state required us to have a lawyer present and facilitate closing day. Luckily, in California, only a notary person needed to be present and process the paperwork. It was much easier and less formative (and less scary) in California. Once all of that has been notarized and you've signed your signatures in dozens of spots, your REALTOR will let you know when the money part is all cleared and set up a time to hand you the keys to your home.
Every time, I get the keys, I feel so relieved! More relieved than happiness, really. For all that paperwork, money and time, we exchanged it for something; a small key that'll unlock the home and our future. And also, the garage opener! We get the garage openers to the garages of the home too.
Moving Day and Bulk Items
Finally being able to move your stuff into your new home is going to be an amazing and/or very hectic day, depending on how prepared you are! In the past, I've went on the U-Haul's website to find last minute movers to move my refrigerator and other large appliances. It was really easy to pick a moving company from there and they also show their availability without having to call them directly. You can also find local moving companies as well but I wouldn't be surprised if they are listed as one of the businesses under U-Haul for local moving services.
Usually by time it's moving day, I've already put most of my things in cardboard boxes. You can sometimes find used moving cardboard boxes on Craigslist or Facebook Marketplace, if you don't want to spend more money and buy brand new ones. I've also gone to stores and asked for cardboard boxes as well.
Home Improvement Projects
If your home that you've just bought is not a brand new construction, chances are, you'll have some home improvement projects to do like we did. It took us about a good month before we could make our home livable when we bought an older home.
If your home is a new construction, then you might have to buy new blinds like I did because it didn't come with blinds! Read my Lowe's and 3 Day Blinds Price Comparison blog entry.
Hopefully, you didn't plan any vacations close to your closing date because there is a chance that you're going to spend some money and time to personalize your new home and you'd want to take care of it quickly.
When you fill out a change of address form at the USPS, you should get a big packet of coupons mailed to your new home that you can use for your home improvement projects. USPS works with a lot of stores on this. This usually takes about a week to receive but it may take longer for you. In the past, I've received a coupon from Home Depot and Lowe's after I've filled out the change of address form and I was so grateful! If you're planning on making a big purchase at a home improvement store and it is not terribly urgent, it might be worth waiting for those coupons to arrive, especially for large appliances. It could save you hundred of dollars. Year round, Lowe's offer a 10% off discount for active military and veterans with proof of service, so we typically try to shop there instead of Home Depot because of the savings.
Celebration As Home Owners
After you've moved the very last item in to your new house, it's time to celebrate. You deserve it! All of that stress and time you've put into has resulted in a home that you now own. Pop the champagne!
Note from Blogger:
Rules and regulations on buying a new home differs from state to state, county to county and/or city to city so check with your professional REALTOR and local government to make sure you're following the proper steps you'd need to take to protect yourself and your investment. Buying a hope is a very big deal! I'm only sharing about my personal buying experience and not a professional investor. Good luck in your home buying adventure!Temporary Blinds:
In : Home Improvement
Tags: prepare to buy a house what to do after you send an offer buying a home how to pick a realtor