10 Steps in Buying a Home: Part 6-Negotiating Towards Ratification
10 Steps in Buying a Home: Part 6-Negotiating Towards Ratification This is the point in the 10 Steps in Buying a Home where you really find out what your true commitment is to buying this house! Do you want this house more then the other buyers who have submitted offers? There are several terms and conditions written into your offer in addition to price. The seller and their agent consider the terms of all offers and weighs them with the price to find the very best offer. Often in a multiple offer situation they might decide to either accept the best offer with the most desirable terms or counter one or more of the offers to work towards getting the best price with the best terms in one ideal offer. This means you may be working with your agent to negotiate the best possible terms and price you can offer. Hopefully your offer is at the top of the heap and in consideration. What Should I expect in the next Phase Of Buying a Home? Here are the options: Your offer is accepted without a counter offer – YAH!!! Your offer is the best but sellers counter you to change the terms or price- Still YAH!!! Seller offers counters to 1 or more other buyers – Still in the Game! Your offer is not in the running – All hope is not lost. Other buyers could back out #1 is, of course, the best option. The sellers will sign your offer and return to your agent and BOOM – you’re in contract! #2 If the next best option. If the sellers are asking you to raise your price you must consider what you are willing to pay for the house. Will your loan and down payment cover the additional funds? Is there a possibility that the house will not appraise at the new price? This is when you are really tested on how much you want this house and if you will be devastated if you can’t move forward. #3. There are many ways the sellers can counter your offer. Your agent can review all the options and help you determine the best route to take. You can either reject, accept or counter their counter offer. Negotiating towards the best terms for buyer and seller is an art and takes careful consideration. Hope is Not Completely Lost if your Offer […]
10 Steps to Buying a Home – Step 5 The Offer
10 Steps to Buying a Home – Step 5 The Offer When do you know you are ready to make an offer on a home? Pre-approval from lender – Check! Private home tour with agent – Check! You may look at 3 homes or 20+ homes before finding one that speaks to you, matches your needs/wants and is within your budget. Remember that finding the perfect home for you is a process and each buyers’ process is as unique as they are. We are currently experiencing a strong sellers market. What does that mean for you as a buyer? High demand, low inventory. Typically, less then 3 or 4 months’ worth of inventory makes for a sellers market which means you may be competing for the same property with other buyers. Bottom line is you might have to submit offers on more then one house. How Do I Make My Offer Stand Out? There are steps you and your agent can take to make you and your offer stand out to the sellers and their agent. See the house more then one time if possible. Go to the open house and introduce yourself to the listing agent. Ask questions. Show interest. Spend time in the house and really consider all the features, finishes, floor plan and location in the city and on the street. Let your agent know immediately if your interested so she can request the disclosure packet and get specific seller needs/wants and offer details. Listing agents appreciate knowing which buyers are considering submitting an offer. Only Make Offers on Homes You Have Full Intention of Buying Keep in mind that a lot of time and effort on you and your agents part goes in to preparing, writing and submitting an offer. If you decide to make offers on homes do so with the intention of buying it and being the winning offer. After previewing the home, thoughtful consideration, review of disclosures and comparable sales you decide you want to write an offer the fun begins. Offer Packet includes: Your Agents cover letter Personal letter from buyer Lenders pre-approval letter and confirmation of funds for closing/down payment Agency disclosures Sign receipt of seller disclosures Your agent will review the purchase contract with you and fill in the details of your offer. She will complete the necessary agency disclosures and write a cover letter that shows the highlights of […]
10 Steps in Buying a Home – STEP 4: Preview Homes
10 Steps in Buying a Home – STEP 4: Preview Homes Congratulations! You are now ready to get in your Realtors car and start down that path of finding your next perfect home! You’ve made it through the pre-approval process which is a difficult step and now you will be rewarded with a customized tour of homes that match your budget and hearts desires. Buying a home is a process and that process is as unique as you are so first step is to disregard any pre-conceived ideas about the home previewing process will go down. I have worked with clients who searched for two years to define and refine their criteria and others who looked at 3 homes and purchased one. There is no one way to go about finding the home that is right for you. It’s beneficial to know what you want, don’t want and need. What cities you will consider, type of neighborhood you want, view vs. no view, schools, community, etc. With that said, it’s also helpful if you can remain somewhat flexible. Did I just contradict myself? Be open to finding the right house for you and don’t focus too much on the things you can change. Remaining flexible could shorten your timeframe quite a bit. What Features Are Truly Important in Buying A Home The saying, Location, Location, Location could not be more true. There are two things you cannot change when Buying a home. The location and size of the lot. You find the perfect home but you hate the kitchen cabinets. Or maybe they have carpet but you really wanted hardwood. These details should not sway you from a home that is exactly the perfect distance from your kid’s school or has that coveted southern exposure and large flat yard. Exercise: List the top 5 things you want in your first home. Keep in mind you will likely get 3 of them, especially if you are buying with a spouse or significant other and their top 5 are different. Some buyers know exactly what they want and are aligned with their partner and others aren’t quite there. There is a reason it’s called, “First Time Home Buyer”. Anything you do for the first time has a learning curve and this process is no different. You may not realize you want an eat-in-kitchen or laundry room inside your house until you experience […]
10 Step Home Buying Guide-Step1: ESTABLISH A BUDGET
10 Step Home Buying Guide – 1. ESTABLISH A BUDGET Buying property is a HUGE deal! It’s likely the single biggest purchase you will make in your lifetime. The first step is to establish a budget and to do that you have to step back and look at your big picture. What does owning a home mean to you? How do you see yourself and your family living in the home? Is this your 5-year home or your forever home? What other activities and hobbies do you want to also continue or cultivate after you buy your home? These are all really important questions to ask yourself and the answers will help you decide how much or your monthly income you are willing to contribute to a mortgage and household expenses regardless of what a lender eventually approves you for. Expect your PITI (principle, interest, taxes and insurance or total house payment) to be at least 30% of your monthly income or more. Find more details about the actual cost of owning a home from this great SF Gate article. Renting vs. Buying Replacing rent with a mortgage has tax benefits and in the end will save you money and allow you to put that money towards paying your mortgage and building equity instead of someone else’s. Your PITI is a set monthly amount while your rent is subject to annual increases and if your not protected by rent control could spike suddenly and dramatically. Make sure that your PITI (principle, interest, tax & insurance) fits in with the rest of your lifestyle. Once you are comfortable with an amount contact a lender to find out what your buying potential is. The lender will request financial information, taxes and pull credit reports to help establish a budget and provide you with a pre-approval. Reminder of the 10 Steps: Establish A Budget Engage Your Marin Modern/San Francisco Modern Realtor Obtain Loan Pre-Approval Preview Homes Make an Offer Negotiate towards ratification Inspection Contingency Appraisal/Loan Contingency Sign/Fund/Close or Record Collect the Keys and Enjoy! note: this is part 2 of an 11 step series on buying a home. If you missed the intro check it out: 10 Step Home Buying Guide Now you are ready for Step 2 – Engage your Marin Modern/San Francisco Modern Realtor. Coming soon…
10 Steps in Buying a Home – Step 3: Obtain Lender Pre-Approval
10 Steps in Buying a Home – STEP 3: Obtain a lender Pre-approval You have met with and committed to your Realtor and you are ready and anxious to move forward and find your perfect home. Before you get in your Realtors car to look at homes you need to talk with a lender and obtain a pre-approval. Why is this so crucial? Knowing your buying power is well, powerful. The online calculators will give you a rough idea of your monthly PITI (principle, interest, taxes, insurance =monthly payment) but your whole financial picture is unique to you. You want to know how much house you can afford and the amount of monthly payments you are comfortable with before falling in love with a house that you wont’ be able to submit an offer. The lender may have an initial phone conversation with you or just give you a checklist of items they need from you. Your experience with the lender will depend on your individual financials and how quickly you return information they request. The key to success with your mortgage broker is to give them whatever they ask for, in the exact form they ask for it, it as soon as you can produce it. Ex: if they ask for a bank statement. Don’t just send them two pages because the 3rd page it blank or just a disclaimer. Send THE ENTIRE STATEMENT! How Do I Find a Good Mortgage Broker? Some buyers have lenders/bankers or brokers they have past experiences with but most first time home buyers do not. Your Realtor will have one or more mortgage brokers they have worked with many times. They trust them. They like them. They know the broker will take good care of their clients, go above and beyond to keep the process moving and communicate through every step. It’s beneficial for you and your agent to work with a mortgage broker they have experience with. Obtaining a loan is a tricky process with many opportunities for things to go terribly wrong. Working with a mortgage broker that takes a personal approach, knows your Realtor and has both your backs is golden. Buyers can choose any mortgage broker or institutional banker. I have found that working with mortgage brokers is more beneficial then working directly with a big bank (unless you have an established relationship with a banker, know and trust […]
10 Steps in Home Buying – STEP 2: Commit to a Realtor
10 Steps in Home Buying – STEP 2: Commit to a Marin Modern/San Francisco Modern Realtor The home buying process is unique and should be customized to your specific and personal needs and wants. Engaging a Realtor early on will get you started down the right path for your home buying journey. 97% of home buyers today start their search online and spend anywhere from a few weeks to several years researching and planning before contacting a Realtor. This is totally normal but when your ready to move from looking at pretty kitchens and dreaming about your next home to putting together a solid game plan and timeline your ready to engage a Realtor. Every single home buyer has a unique set of circumstances driving their home buying process. There isn’t one perfect way to start your home search but engaging a Realtor early on in the process will save you a lot of time, frustration and guesswork. HOW DO I KNOW WHEN A REALTOR IS THE RIGHT ONE TO HELP ME WITH THE HOME BUYING PROCESS? There is no single perfect Realtor. There are literally 100’s of excellent Realtors that work in Marin and San Francisco. The key to finding the perfect Realtor for you is finding someone you trust and like. When considering a Realtor to work with and help you find your next home google them, read reviews, bios, check out past sales, read their blog, etc to get a better idea of who they are and how they work. If what they have to say resonates with you and it’s supported by excellent client reviews then you will likely enjoy working with them on your home buying process. WHEN HOME BUYING WHY IS IT SO IMPORTANT TO FIND A REALTOR YOU LIKE AND TRUST? Why is it so important to find a Realtor you like and trust? Because you want someone who will be honest and straightforward with you. You want a Realtor that puts you and your needs first and never tries to push you or talk you into purchasing a home that is not the perfect home for you. Also, it can take anywhere from 1 -2 months to find the perfect home or up to 2 years. You want a Realtor that will guide you through the process, coaching you along the way to avoid frustration and burn out. I find starting a […]