The Home Buying Process

A guide to help demystify the home-buying process!

Get your financial situation together

Get a pre-approval and/or talk to your banker about writing a letter for proof of funds. (necessary for a cash offer, though sometimes on hi-end purchases you will need to provide both a pre-approval and a proof of funds)

Organize as much cash as is possible—gifts, savings, etc. The more money you can show at the offer, the better chance you’ll have of your offer being accepted. Just because your offer involves financing that will almost certainly be obtained without issue, doesn’t mean that it’s competitive with what other buyers are willing to do.

All things equal, sellers will take more cash every time.

Know what you're looking for

Determine your housing wants and needs. With 2 buyers, you must balance and prioritize the needs of each individual buyer. Make sure you’re on the same page.

Keep in mind that the pursuit of a “dream” property can be paralyzing—if a property meets 80% of your wants, then you should probably consider making an offer.

Is your criteria realistic?

Analyze market/sales data for similar properties. This helps determine a price range. Are your goals achievable? Are you willing to compete in this range? Will there be enough options to make the search feasible or a good use of your time?

If there are only a few options sold every year that meet your criteria (and all of those are competitive multiple-offer situations), you may want to consider revising your search (or you could be looking for a very long time...)

Visit properties

Visit some open houses and get a feel for the market. Pay attention to how quickly or slowly things go under-agreement. Is there a typical schedule for when properties are listed?

For example, in my market (which is a competitive market), properties are usually listed on Wednesdays, have weekend open houses, receive and reviews offers on Monday or Tuesday, and will often go under-agreement by Wednesday—1 week after being listed. Knowing this typical schedule can be useful.

Get an attorney

Make sure it’s a real estate attorney—not a litigator, not the family attorney. Find an attorney who specializes in the area where you’re looking to buy.

Don’t use a city attorney to buy land in country, and vice-versa. If you’re not using a buyer’s agent, then having an attorney is even more important.

Make an offer

Include whatever contingencies you deem necessary for your protection, while recognizing that in a competitive market the highest offer with the least contingencies will be most appealing to a seller.

Consider qualifying your contingencies. I recommend trying to find the “offer-price of least regret”—the offer amount that you would not regret if it were accepted immediately and also wouldn’t regret if you didn’t get a chance to improve the offer (buyers often assume there will always be a call for “best and final offers”, but this isn’t always the case, so it can be better to put your strongest offer forth [you don’t necessarily need to improve your offer in a round of “best and final” anyway!])

Negotiate the price and terms

Keep in mind that the terms and dates are also important features of your offer (in addition to price)—use them to your advantage!

Don't do anything rash

If you’re financing the purchase, lenders may check your credit a few times during the loan application process (including immediately before closing).

Don’t make any huge purchases or open any new lines of credit prior to the closing as this can adversely affect your credit.

Obtain homeowner insurance

Some condo master-insurance policies will cover the fixtures of your unit and some won’t. In either case you’ll probably want a policy that will cover your possessions.

If you’re financing, most lenders will require you to have some sort of insurance policy in place. Often, buyers will simply use the company that the seller was using as they are already familiar with the unit/building/association.

Final walk through/closing

Usually the final walk-through will happen the day of (or the day before) the closing. Hopefully it goes smoothly and there are no surprises! (though when there are surprises such as things left in the basement, unexpected damage, etc), it can usually be dealt with by some small price adjustment or withholding from the proceeds of a sale.

For the closing, don’t forget to bring an id and a checkbook for any last-minute adjustments. And stretch your hands first! You’ll be signing a lot of documents!

Contact me about buying or selling your home

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