Home Buying Tips

 

Congratulations on taking the exciting step of purchasing a home! This is a significant milestone, and it's important to be well-prepared. Understanding the entire process will also mitigate the surprises and frustrations which often arise. I’ve broken the process into several stages to make it clearer to focus but I’d advise you to review everything initially so you can see the entire path.

 

Start planning and saving sooner rather than later. This is the big cash outlay in purchasing a home, sometimes as much as 20-30% of your purchase price. There will be programs, loan options, and sales negotiations that may lower this amount but have as much of the cash available and find out later you don’t need it versus the opposite result.

 

Consult with multiple lenders to get pre-approved for a mortgage. This will give you a clear understanding of how much you can borrow. You can “test the waters” with lenders without affecting your credit. Don’t be afraid to let 2-3 lenders run your numbers and outline your options. Knowing the best loan option will also give you a stronger picture of the down-payment and closing expense outlay. Although it’s not always feasible, I can’t stress enough the value of working local. I can speak from multiple personal experiences when I tell you that local lenders will work harder for you. They won’t do anything that jeopardizes their institution or their own integrity, but they will go far beyond others to deliver customer service and help you get in your new home.

 

Of course, the part I love the most! I can help you best if you’re already pre-approved. See #2 above. This allows us to look at houses aggressively and be ready to put an offer in when we find the one for you. I can also help you understand the markets within the area that you’re interested. I’m constantly educating myself, working with other agents, and benefiting from being part of the Coldwell Banker network to know Memphis and our surrounding areas for you. As the process plays out, I will be walking you through the documents, regularly consulting with you, overseeing the inspections, negotiating on your behalf, answering questions, and listening to you so your experience is first class.

 

This can be a lot of fun and grueling at the same time. Hang in there. I’ve done this a bunch and I know you maybe haven’t. I’ll help you stay the course even when it gets tiring. As we look, keep in mind, there is almost no way you will find the perfect, 100% of everything you want home. Think 80%-90%. If we find that, consider it seriously. As you tour, remember, homeowners have cameras and recording devices everywhere. Keep your comments to a minimum while in the house. We can discuss once we leave. 

 

You found THE house! Now let’s go get it! I will work with you to understand the current situation in that home’s market. This is everything from recent prices homes have sold for, what other homes are listed for, how long homes appear to be on the market, and other additional negotiable items like prepaid and closing expenses from the seller and appliances to remain or not remain. We will go through the offer document together in detail, so you fully understand the contract terms. Additionally, there are several other documents to sign, and I will walk you through each, so you fully understand the entire transaction.

 

Once the offer is in, I will work with the listing agent to understand, as best as possible, what other offers they may have received and how the seller is responding to your offer. If a counter-offer comes back to us, I will forward it to you and we will discuss exactly what the seller is requesting differently from our initial offer.

 

You’re now Under Contract! I will immediately coordinate with the listing agent for the next steps. Although home and termite inspections and a survey are each optional to you (the total cost for all three probably runs about $1,000 but can fluctuate due to house size), I highly RECOMMEND you spend the money for all three. Typically, the contract will give us 10 days to get this work completed and decide what, if any, repairs you want to request the seller complete prior to Closing. This is another point of negotiation for us, and I will work with you and the listing agent to put you in the best position possible. In lieu of actual repairs, the seller may offer more closing expense funds or some other way to compensate you for a particular repair. In the event it’s a lengthy repair or there’s a delay, it’s possible to escrow funds to use after Closing for a repair although this isn’t ideal for either party.

 

There are other potential options for inspections (drain line video, more extensive HVAC, roof, foundation, etc.) which we can discuss if it seems necessary.

 

Keep in mind this all has a deadline and the clock starts as soon as you are under contract, so we must work efficiently and communicate well!

 

Simultaneous with the Inspection and Survey process, you will be working directly with your lender on loan underwriting and appraisal. I am here to assist in any way possible, but this is your private business with your lender. Your lender will walk you through the details but here are a few things to keep in mind. Yes, you may have a pre-approval, but it’s not final until the lender’s underwriting and credit review team sign off. I have seen many transactions fail between pre-approval and underwriting.

 

Your credit score and income are critical factors in getting approved for the amount you need. However, clients often forget about their expenses or debt. One of the most important details is your debt-to-income ratio. So even though you may make a very nice amount of money monthly and pay all your bills dutifully, if you have a lot of loans for items, you may find the lender has a great deal of angst in lending you the necessary funds. Take a serious look ahead of time at your existing debt. It will save a lot of anxiety and stress once we are in the middle of the transaction. Avoid purchasing anything large on credit during the process. Oddly enough, even receiving a one-off large amount of money can cause issues as the lender will wonder where it suddenly came from and need all sorts of documentation and justification to ensure their process is clean and correct.

 

Did I mention it is more efficient to work with local lenders??  There’s no guarantee but the process just seems to move cleaner and smoother. The local lenders I have worked with will make a concerted effort to review this all in much greater detail before they ever give a pre-approval. That saves a lot of stress later as the transaction moves through underwriting.

 

The BIG day! It’s likely taken about 30 days for title work, appraisal, lender underwriting, inspections, repairs, etc. to get done but you made it! 

 

In the final days leading up to Closing Day, we will do a final walk through of the home. We aren’t trying to find more problems to start renegotiating at the last minute. This is simply an opportunity to check out the repair work (we can actually do this separately if you want) and to ensure that the house is in the same condition when you last saw it (no crazy stuff like new large holes, damaged flooring, doors gone, or missing items that contractually were to remain). It should take no more than 15-20 minutes depending on the house.

 

Contact the utility companies and any internet and communication companies to ensure the transfer to your name is in place for the day of Closing.

 

I recommend coordinating with your lender so that your downpayment and the borrowed funds get to your closing attorney 24 hours ahead of closing if possible. This limits potential delays waiting on wires to move from one place to another.

 

I will meet you at that attorney or title company where you are signing. There’s not a lot for me to sign most of the time, but I will see you through to the final item to ensure everything gets done and all goes smoothly for you! There’s quite a stack of papers to sign especially if you are using a loan to purchase but it won’t take more than about 30-45 minutes to plow through. The attorney will guide you through exactly how your name should read and where dates on documents are needed. They will explain each document as you sign and I’m there to ensure you understand too.

 

It's important to know that you don’t get your keys upon signing and wiring your money to the attorney or title company. Upon completing all the document signatures, the attorney must package it all up, send it to the seller’s attorney, and wire the payment to them as well. This usually takes a few hours, so expect to sign but then not get the keys to your home until the “swap” (documents and money all traded between parties) occurs later in the day.  Given that, I will be working to ensure we close in the morning and ideally avoid Fridays and days just before a holiday. That can really cause a holdup in you getting the keys to your new home.

 

WE DID IT!!! Once the attorneys give me the thumbs up, I’ll coordinate getting you the keys. Then it’s ALL YOURS!! 

 

If you’re planning to move that day, make sure you have coordinated with your cleaner, moving company, and any other people you want/need involved to show up later in the day. That will make sure no one is standing around waiting for keys to get released, costing you money, and causing you unneeded stress.

 

If you haven’t moved before, just know it’s tiring and stressful no matter how much you plan. Think about getting pizza, food delivery or some other easy food to have available so you make sure you eat without needing to find the dishes and cook. You won’t likely be in the mood.

 

I’ve found that it’s also great to have a friend be your coordinator with the pre-developed plan on where boxes and items go to assist you. You’ll have plenty to do beyond just telling people what room to put things.

 

Finally, even though it can be exhausting and stressful, make it fun! This is a huge day and well-earned!

 

Decorate, rehab, landscape, whatever makes you happy and feels like home. My role is not done upon handing you the keys though. I am ALWAYS available for questions, ideas, guidance, or just a chat, no matter how many years removed from your purchase! Feel free to contact me!