Home Buying, 12 Steps and the Serenity Prayer
Did you ever find yourself in the middle of a mess and wonder, how did I get here? Have you ever been given directions to go somewhere, you try to follow but still end up lost? Have you ever had this experience with hundreds of thousands of dollars on the line?
Can you spell S-T-R-E-S-S?
Stress is a killer both literally and figuratively. Trying to make a home buying decision is stressful enough, but trying to do so when you don't understand the process, terminology or your qualifications is at least doubly stressful. I'm writing a series of posts on how to successfully go through the process with the least amount of stress and the greatest clarity possible. Notice, I did not say stress free. A 30 year commitment involving this much money will involve stress. Each of us handles stress differently, so I make this promise; follow these steps and ask any question anytime, your level of stress will be lessened, better managed and you might even have fun!
Each of these steps may be followed sequentially or some even simultaneously, but each step must be taken in each phase of the process.
I'll assume you have come to the conclusion, and involved all necessary parties, spouses, significant others, business partners or even parents that buying a home is something you sincerely want to do. Anyone who will have a voice in the decision process should be involved and disclosed to all the professionals you choose to work with. Surprises along the way from unknown decision makers will dramatically take away from the fun and success of this process.
Each of these steps will be fully explained in a separate post. You can open the link to get a more detailed explanation and discussion (links to be available as the posts are published). The exact order is less important than that each step be taken close to the order presented.
Step One, Get Pre-Approved. Financing is critical to knowing lots of options and boundaries. Why fall in love with a place which is out of reach? All other homes will fall short.
Step Two, Who needs an Agent? The Real Estate markets are more volatile than ever. Buyers need to have someone experienced, licensed and trained to help chart the best course and make the best deal. Let's face facts, Real Estate Agents are plentiful and generally are "nice people." This isn't enough. Find someone who listens to your goals, responds appropriately and will tell you the truth. A good agent will be an invaluable resource whether you have purchased before or are first time buyers.
Step Three, Decide on Where. Location dramatically affects affordability. The same budget may buy a one bedroom condo in the city or a 4 bedroom palace in the country. Consider many factors when deciding where to live.
Step Four, Priorities; Which amenities do you want or need in your house? Steps three and four will likely be decided somewhat together because of the different buying power in different locations. I have some tools in the full explanation (link) of this step to help you through this decision making process.
Step Five, Meet with your Agent. Go over all the aspects of 1, 3 & 4 with your agent and ask for suggestions and input. They may know a perfect house right off or know if your budget and priorities are not quite lining up and help with a reassessment. It's human nature to want something just out of reach; that's okay. Your priorities may adjust as the process goes on. A good agent will work with you and suggest some homes to see.
Step Six, Visiting homes. Unless you are on a very limited time frame, try not to schedule more than 4-5 homes per outing. Ideally your agent sent you a list, you pared it down and the agent made all the arrangements. Take notes, keep flyers, and eliminate those homes which will not work early on.
Step Seven, Recapitulation. This is a musical or biological term meaning Repeat or reconsider. Once you've been through all the steps to date and seen some homes, it may be necessary to rehash all you thought you knew. Are your expectations in line, does your desired price range buy what you thought it would, are the neighborhoods nice? If so, continue. If not, discuss and reassess your priorities. Pass your new conclusions along to your agent and get ready for the next set of home tours.
Step Eight, Writing an Offer. You've found the best home available that meets all your adjusted criteria; it's time to write the offer. You will need to decide many things besides price. Discuss all the issues with your agent, voice any concerns you have and decide on an appropriate strategy for your offer. Offers have specific deadlines. Know what they are and comply or you may lose certain rights.
Step Nine, Offer is Accepted, Now What. Update all your financial information with your lender and plan the inspection. These may be two steps, but they need to happen almost simultaneously.
Step Ten, Negotiating the Inspection. All homes have issues, even new construction. A Professional inspection is NOT OPTIONAL if you are working with me. Sorry for yelling but I feel very strongly about this. Most inspection issues can be resolved for a reasonable amount of money, but not all. Whether you accept the home as is, demand all issues be fully resolved by the seller, demand cash in lieu of the seller repairing or walk away depends on you and what is found. Again, a good agent is critical to mapping out the best strategy for your circumstances.
Step Eleven, More Paperwork. You are now successfully past the inspection and heading in toward closing. In Washington, closing is not the day you sign but the day the transaction is recorded with the County. You will be updating your lender as needed and eventually be called by The Escrow Company to come in and sign the loan and title documents. This is typically 1-5 days prior to closing. All borrowers and/or people on the Title must attend or have made arrangements in advance.
Step Twelve, Collect the Keys and Start Moving. Closing happens when the lender funds the loan and instructs the Escrow Company to record the transaction with the county. Possession generally happens on this day, but may be delayed to allow the sellers a chance to move. Your contract will indicate when possession will be. This is my favorite step, I love handing over the keys and shaking the home new owners hands.
So, 12 steps and no one had to admit to a bad habit. The Serenity prayer helps with these 12 steps too, "God grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference." You may find the perfect house. You may find you had to put off a few things you wanted until your next house. If you understand the process, you are able to work out your compromises and feel good in the process.
When buying a home having a map of the process is very useful to managing your way and lowering the stress. You may make a series of compromises from your ideal list to what reality offers, but if you are in charge and know the process, you will make the best choices for yourself and all concerned.
It is a privilege to come alongside people in this life changing process and be their advocate, counselor, and consultant. I do some selling too, but that is to the other parties and not my clients, I work for them. We've enjoyed a lot of success both for ourselves and mostly for our clients.
If this has been useful, pass it along to others who may benefit. Read the posts I have breaking down each step, they are much shorter. I plan to write a series about selling too, look for that series, or contact us and we can discuss it further.