Understanding The Home Buying Process

Choosing An Agent

As a homebuyer, it’s very important that you know all the information you can about the home buying process. When a good deal comes up, you've got to be ready to jump on it as they’re going to go fast. You don’t have time to delay.

The very first thing that a buyer needs to do is to pick the agent that they're going to work with. Buyers are represented by a real estate agent over 88% of the time. This is for a good reason. First, there is usually no out-of-pocket expense for a buyer to work with an agent. Second, that agent’s job is to make sure that you don't make any mistakes.

There are a couple of questions that you should be asking yourself as a buyer. Is right now the best time to be purchasing a property? How long do you plan on holding onto the property? Will you be doing any improvements to the property? What do you do after you go into contract on a property? How do you even get inside the property? The reason people hire an agent is that they do all of that for you.

Any agent can take you to homes that are for sale. A good agent, though, is going to interpret all of the information that you're sharing to help you make the best investment for you. 

Securing Your Financing

Now that you've partnered with a great agent, the next step is to focus on confirming your financing options. You want to get partnered up with a good quality lender. And remember, don't start looking at houses until you have your financing lined up.

One of the most important parts of your real estate investment is not just finding the right property, but making sure you have the right financing for that property. Based on your investment goals, you will have financing options available to you that will influence the properties and the decisions you're going to make. You're going to have a good idea of your down payment as well as how much the house will cost you per month. This monthly cost will include taxes, insurance, mortgage insurance, and potentially an HOA.

The reason we want to have all this information upfront is that it will allow you to make an informed decision about your budget and spending that you're going to be comfortable with long term. I always recommend to all my clients that we never want to get into a situation where we're house-poor. You don’t want to work hard just to pay the mortgage without any money left over to live life, go on vacation, fix cars, or do other projects. 

Looking For Properties

Now that you have your financing lined up, now it's time to start looking for properties. You and your agent can come together, identify an area, and pick a set of homes that match your criteria and your preferences. Your agent is also going to be able to educate you on different areas and compare them against each other.

If you're like most buyers, you're going to have questions about the schools, shopping, restaurants, things to do in the area, and even commute times to and from work. Your agent is going to be your resource for that because when you're buying a house, you're buying into a community. It’s important that the community you choose works for you.

Sometimes the home search process happens in one day. For others, it might take a year or longer. It just depends on what your needs are and what your priorities are. 

Making An Offer

Eventually, you're going to find the right property and you're going to want to submit an offer. It's your agent’s job to help you draft that offer. They’ll handle all the negotiations on your behalf. And if your agent gets your offer accepted, congratulations: you've got your foot in the door. There are still a lot more steps ahead in the process to get the keys to that house.

You probably didn't know this, but typically a buyer will spend fewer than 15 to 20 minutes in a house before they actually write a contract on the home and potentially get that contract accepted. This means we didn't even have time to flush a toilet, check the electrical, look at the foundation, examine the plumbing system, look for leaks, or even see how old the roof is.

Due Diligence, Escrow, And Closing

The next step is to perform your due diligence on the property. It's your agent’s job to help represent you through that and facilitate those inspections. In addition to the inspections, unless you're paying all cash, you have to get your financing lined up for this transaction. This includes any applications and documents for your lender, the appraisal, and other details that are going to be required. Again, your agent is there to help you through that.

In a typical market, you will see a transaction in escrow for about 30 days, starting from the date the contract is accepted to when we close and get the keys. However, in this accelerated market, we're seeing 15 to 20-day escrow as being pretty common. This means we have to be organized and ready upfront to move quickly. 

Making A Smart Investment

The home buying process includes a lot of steps and details. There are many things we haven’t even covered. So let's make sure we block time to go through every line item a detail so that you're prepared when we get to this point.

My suggestion is, don't buy a house just to buy a house. Make a smart investment. Have a plan for an investment that's going to help you build wealth for your future, and make sure to ask questions. I'm here to help.

If you’d like any more information, feel free to reach out to me and I'm happy to help at any time. I look forward to being your resource for all of your real estate needs.