After years of helping Tennessee Valley home buyers find their new home, I have noticed that a definite pattern of success exists. Over the years I have relayed this “stress free” process to my clients and those who followed the advice have had amazingly easy and enjoyable times house hunting. For those who didn't follow the plan; well, that’s where the horror stories come from. To help you in your next home search I thought I’d outline my “10 Steps to a Stress Free Home Buying Experience.”
1. Research - Before the internet (You do that there was a time before the internet, right?) all of the information on homes for sale was in the Realtors MLS book. This book was published once a month and was the size of a large city’s phone book. To get the information you had to contact a Realtor. Some call those times the “good ol’ days”. Today, there are more real estate search sites than you could ever use. The good ones will give you information on the community as well as the homes for sale. Many people already know where they want to live. If you don’t this is the first step. Do you want to live near family, friends, schools work or recreation? Just selecting a county or a city isn’t close enough. In Madison County we currently have over 3500 homes for sale. In Huntsville (city) there are almost 1500 on the market. That’s too much inventory to work with. You need to visit several areas and narrow you search down to a quadrant of a city or county. I.e. Southeast Huntsville, Northwest Madison County or the Hampton Cove / Owens Cross Roads area. Take as much time as you need to decide. The time spent on this step will pay big dividends down the road.
2. Time Frame - Are you selling a home or do you have a lease that hasn’t expired? Are you relocating to accept a new job or do you need to wait for kids to get out of school? These things and other individual situations will affect the time frame of when you expect to move into your new home. When you‘ve decided on a move in date, meet with the mortgage company about 90 days in advance. They will do a preliminary analysis, look at your credit report to see if there are any problems and will be able to give you an initial go or no go. You won’t get a final OK until you have decided on a home, completed a purchase contract and delivered all of the supporting documents to the mortgage company. But if they have looked at your credit report, discussed payments and given you a price range to shop in, you’re ready for the next step.
3. Pre-Qualify - Until the housing bubble burst in 2006; mortgage companies used a mirror to see who could qualify for a loan. (You know; if you can fog a mirror you qualify.) Today it’s completely different. It seems that a lot of lenders don’t really want to loan money at historically low rates so they make it extremely hard to qualify. Now if your credit score is over 750 and you’re going to put down 20% and you’ve had the same employer for at least two years and your spouse is equally sparkling, you won’t have any problems. For the other 90% who would like a new home it’s going to be arduous at best. Start early with a reputable, local lender. Ask for referrals from friends or coworkers who recently made a purchase. Go over your income, debts and budget to arrive at a comfortable payment that will be easy to live with. When the payment id established the mortgage officer can give you a price range to stay in. Don’t waste time looking at homes you can’t afford. You’ll just get discouraged and may be disappointed in the home you end up with. Stay in your price range and pick the very best home that fits your current situation.
4. Must Haves - Now you’ve got a location and a budget; let’s talk about your “must haves”. How many bedrooms? What about a dining room or will an eat-in kitchens work OK? Do you like to work in the yard or would you like to take just a few swipes with a mower and be done with it? Do you want to entertain or just be alone in your new home? One floor or two? Attached garage or will a car port work fine? You get the idea. The more you discuss and settle in advance, the easier it will be to focus on the homes that fit your goals.
5. Find a Realtor - For buyers this is a “no brainer.” A Realtor will help you locate a home, negotiate a favorable purchase contract, guide you through all of the paperwork, help arrange inspections, negotiate seller repairs and walk you through closing. And, believe it or not, the seller pays the Realtor. In most cases the brokerage commissions are paid out of the seller’s proceeds at closing. I have pages and pages of reasons why you need a Realtor, but for now I’ll just say it makes no sense to go it alone.
6. Listing Alerts - Tell your Realtor where you want to live, how much you can spend and what features you “must have.” Then your Realtor will set up a listing alert for you. Every day you’ll get an email with all of the new listings that came on the market the day before that meet your criteria. Public sites can screen using a few variables, but a Realtor can use the MLS site to fine tune, using significantly more variables, your search and only show you homes that are right in your wheel house. Again, a big time saver.
7. Drive By – What’s the first thing to do when you get your email with the new listings? No, do not call your Realtor to set up appointments to see the homes. Before you take the time to make appointments you need to do, what I call, a drive by. You need to drive to the neighborhood and check out all of the external factors before you go inside the home. What’s the drive like? Do the neighbors keep their homes is good condition? Are there any purple houses on the street? Does anyone work on their car in the front yard? You get the idea. Check out everything you can see from the outside before you decide to check out the inside.
8. Home Visit – Now you’re getting close. You’ve come a long way and now all of your work is about to pay dividends. Everything you’ve done until now has been in an effort to identify the 4-6 homes that most perfectly meet your goals. Studies show that buyers who look at more than 10 homes become too confused to make a decision and most of the time will back out of the buying process. Many times, when a client has followed this procedure, we’ll walk into the first home on their list and it’s “the one”. But if the first one is not the one for you, it shouldn’t take more than 10 homes to find your new castle.
9. Make an Offer – Now that you have found “the one” it’s time to put your ideas on paper. Look at the recent sold homes and the ones currently pending in the area to get an idea of the real value. Talk with your Realtor about seller paid closing costs, closing dates, contract contingencies, potential inspections and identify anything that you know will need to be repaired. Write a reasonable offer and your Realtor will deliver it to the seller and the negotiations will begin.
10. Home Inspection – You've negotiated a favorable contract on your new home, the mortgage company has all of the documents they need and now there’s just a couple more steps to complete before the home is yours. Now it’s time to put some more eyes on the home to see if there are any significant deficiencies that require attention before you take ownership of the property. You’ll need to hire a general home inspector, a termite inspector and maybe a HVAC inspector to check out all of the major components of the home. There are other inspections that you may need; your Realtor will have all of the information for you to decide what’s important to you. After the inspections you will confer with your Realtor to see if there are any repairs that the seller needs to make. This is another negotiation and another reason a Realtor will be an invaluable asset for you in the process.
Congratulations! You’re ready for closing. All of the hard work is over. Now it’s time to meet with the attorney, sign some paperwork, get the keys and begin enjoying your new home. I know this seems like a long process, but a home purchase is probably the largest financial decision you’ll ever make. Make it a good one.