Home Buying 101

Happy Family After Buying New HouseSo you’ve decide that you want to buy a home and you’re asking yourself, “What next?” Maybe you’ve rented your entire adult life and this is going to be your first home. Maybe you’re already a homeowner and you have decided it is time to size up or size down. Maybe you have reached that stage in your life where you are wanting to find a way to start investing in real estate and build an investment for the future. Either way, the decision to buy a house is an exciting one! Full of possibilities, excitement and something great on the horizon.

So what do you do 1st? If you are like most people, the first thing you do is hop on the world wide web and google “trendy lofts down town” or “Classic Victorian with a view” or whatever you see as the perfect home for you. Now, while knowing what you want is a crucial component to making your dream become a reality, the most brilliant first step for any would be homeowner would be to figure out, NOT what you want, but WHAT YOU CAN AFFORD. Yep, the first step in this exciting adventure is probably the one that you dread the most, but that is only one of the reasons why it HAS to be the first step. Sure there is that whole, “rip the band aid off” concept, but the biggest reason is a lot more intelligent than that. First of all, you don’t want to waste any time surfing the web, browsing through hundreds of bad pictures of kitchen cabinets, walk-in closets and the always poorly present, corner toilet (really folks? I think we can guess at what a toilet looks like.) and find out that what you have been looking at is out of your price range, or my personal favorite (yes this does actually happen) below your price range and you can do much better. Find out what you can afford and then look in that range. That way you are seeing exactly what fits into your budget and you are that much closer to finding the perfect home. One of the other main reasons why you do your pre-qualification before you start looking is so that you can find out exactly what kind of loan is going to be right for you. Believe it or not, there are loan programs out there that might be perfect for your credit score and how much have to put down, but they aren’t perfect for that cute little 3 bedroom town house that you have your eye on because that town house isn’t on the FHA approved list for example. Or maybe you think you are ready for a project or two, but the loan program you want to do won’t allow for the cost of improvements or that “missing” kitchen sink (true story). Every house is different and that is part of the fun, but it is SUPER important for you to go into the buying process and the house hunting search knowing exactly what your best loan is and what your options are to be creative if you find the “perfect” place.

Trust me when I tell you, we are going to have some serious fun getting out there and looking at houses. This is seriously my favorite part of the job for a reason. But, you don’t want to spend 2-3 weekends going out to see houses only to find the “perfect” house and then find out you can’t buy it because you can’t find a loan program that will work for it. Incredibly frustrating and a total waste of your time and mine. I want to get out there on the hunt, find you the perfect place and then go to work negotiating you a deal you never thought possible. That is only possible when we have all the pieces in place before we get started. I’ve had clients who came to me with “Pre-qualified? Of course we are! I just talked with my mortgage guy last week on the golf course.” Then we spend weeks looking, find their “dream house” only to lose it to a competing buyer because that “pre-qualification” that they “thought” they had, was outdated and they couldn’t really qualify for that house because of some subtle change in their income or credit. It happens more than you think. Let’s be ready to snap that dream house out from underneath the nose of any competing buyers because you are READY TO GO!

Getting pre-qualified is really not as hard as you think. If you know what you need to have ready and get it all put together before you even call, it can actually be pretty painless. I work with a lot of great mortgage officers that can get you a pre-qualification often times same day if you are prepared. Check my Business Partners page for a few great options there. There are links with a couple of them that will give you a list of what documents you will need and what information to get together ahead of time.

My recommendations when it comes to selecting a mortgage professional is:

1) Make sure they work for a reputable company (google it if you haven’t heard of them)
2) Make sure they have experience (my preference is 5+ years in the business full time) I highly discourage people from going with their “friend or relative” who does it “on the side or part time” I could tell you, but you wouldn’t believe how many sales I have had to salvage or sales my clients have almost lost because they were working with someone who does it part time. BIG MISTAKE! The mortgage world literally changes daily and someone who only does it on the side or part time can’t possibly hope to keep up enough to make sure you are well taken care of. Mortgage has to be a full time business if it is going to be done right. JUST LIKE REAL ESTATE! (there I said it)
3) Find someone who is accessible and answers their phone (or at least calls you back the same day if you leave a message) If you can’t at least get that, you are going to spend the entire buying process just trying to get a hold of them and sales can fall apart because a loan officer drops the ball or can’t be reached at crucial times. Also, make sure that you have their cell phone number. Some mortgage agents will operate with just an office number, but there are going to be times when you have questions or that we might need to get in touch with them and an office number just won’t cut it. Accessibility is key. Especially once you find the right house and are ready to make an offer.
4) Find someone that you like. Sounds funny I know, but you are going to work with this person for several months and at some points could be talking to them on a daily basis. If you can’t stand them, it is going to be a painful experience for everyone.
5) Shop around. Mortgages, fees and rates can vary, so don’t hesitate to call someone else for a second opinion if you are less than thrilled with what you have gotten so far. They passed laws a few years back that make it easier for buyers to feel safe shopping a mortgage by not allowing it to ding your credit when they pull your credit as long as it is in the purpose of shopping a mortgage. If you don’t feel the warm fuzzies, call someone else. If you don’t feel like they answered your questions, call someone else. Even if it is someone that I recommend, don’t worry about offending me or hurting feelings. Sometimes people are super busy and can’t give you the time you need because of a personal crisis, vacations or various issues that can impede their ability to give you what you need when you need it. That is life. Even really great people aren’t always on their game every day. No worries. Just move on until you find the right fit.

6) Now that you have found someone you are happy working with and get working on your pre-qualification, make sure that you talk with them about what you want your payment to be, not just what you can qualify for. Often times mortgage agents will work through all your information and tell you how much you qualify for. Sometimes that is a top number, as in you can’t go above this price range or sometimes it is a range. Either is fine, but you want to go into things knowing what your budget is and what you will be comfortable with payment wise. Sometimes those things can be very different. I always like to start with looking at things that are in your comfortable budget range, or less if we can get it, and then know what your top range is in case you find something perfect that you can’t live without. That way we know what your wiggle room is should you need it. In some price ranges, a simple $10,000 price bump in purchase price can make a huge difference in what kind of houses you are looking at, but in your monthly budget, it might only change things by $50-$100. The decision is always yours to make, but it helps give you options.

Once you get your financing figured out and you have a pre-qualification letter from your lender, it is time to start the hunt. That is where I come in and honestly this is my favorite part. Usually at this point I will have a meeting of some kind with you and we will start to nail down the details of what you want and what you need in a house. Sometimes I do this over the phone, sometimes it is in person. Either is fine. If your time allows, in person is nice because we can meet at my office, start to put a picture together and pull up a list of houses right there to start looking at. It helps me to go through a few picture tours and start weeding out and narrowing things down if we can right then and there. Sometimes you don’t think of things until you start looking. Other’s like me to just get a preliminary list together for them and email it over so that they can look through things on their own when they have time and narrow things down there. Either way, you want to get working on your first list of houses to go through and start figuring out where to start. Some people know exactly what neighborhood they want to be in and exactly what they want and don’t want in a house and we can get that list pretty specific right away, but quite honestly, most people have a rough idea and really just need to get out and see a handful of houses to figure out the specifics. That is ok too. I have worked with lots of people that have thought they wanted one thing, but once we got out and looked at 5-10 houses they discovered what they really wanted was something very different. That is ok too. House shopping can be a process for many people and I am totally fine to work through that process with you, even if it takes several weeks. There are many agents out there that will pull you up a list or two, have you pick 5-6, show you those ones and expect you to pick your favorite. I don’t operate that way. I want to make sure that you are completely happy with the house that you choose and you can’t always find that perfect place in 5 houses. Sometimes you can, and if that is you, even better, but I am a patient agent and I actually like looking at houses, so don’t feel like you have to rush through your decision on my account. Let’s get it right.

It can be helpful if you start by putting a list together of what you think you want and be as specific as you can be and rate things as A-Must have, B-would be great, but not a deal killer and F-I know that I don’t want… Yes, it is just as important for me to know what you don’t want as what you do. For instance; I really have to have at least 4 bedrooms, I would love a finished basement, but it isn’t crucial and I absolutely do not want stairs to get to the master or I won’t do a house on a busy street.
It also really helps to know a little about your family and how you live. If you are young and single, being close to activity and transit might be a big deal. If you have 4 kids, having a fenced in backyard might be important. If you are a weekend water-skier then having that 3 car garage or RV pad might be crucial. Whatever it is, there is a house out there to fit it, I just need to know about it so that I can go find it for you.

I know that at this point you have probably done some house hunting on your own already. Whether that was by driving around the neighborhood that you love and hitting open houses or surfing the web and scrolling through various house websites to see what is out there. Either way, you have now reached the point where you are no longer browsing, you are ready to buy. One of the first things I do with serious buyers that I work with is to get them set up on www.utahrealestate.com. This site may not be the most user friendly or have all the search parameters that you like, but it is THE most accurate site out there. That is because it is the public version of the Realtor listing data base. That means that when an agent takes a new listing, this is the site that the listing gets input into. All of the other sites out there pull their information from this site. www.utahrealestate.com is updated constantly, so if a house is brand new, it is on there, if a listing lowers their price, it is reflected here first and once a house accepts an offer and goes under contract it will be removed from viewing on this site before any others. That is very important to you as a buyer because it saves you countless hours looking at houses that may or may not be available or on the market anymore. All of the other sites out there have their own schedules for how often they update their information and many of them that schedule can be every 2 weeks or even once a month. That means that most of the houses that you see on their site very likely are not even available any more. I have had many buyers that start working with right in the beginning that will send me a list of houses that they have seen online that they are so excited to go see and when I get them set up on www.utahrealestate.com they can’t find those houses anymore. When I dig into the properties on my end, I find that they are either under contract or in some cases have already sold and the new homeowners are moving in and not so thrilled with my new buyer driving my 3 times a night. Don’t be fooled by some of the sites out there and if you simply can’t give up your favorite site to search from, at least cross check it with www.utahrealestate.com and scrub your list on that site before getting too excited.

Once you have gone through a list and have found a few houses that you want to take a closer look at, you will let me know what those are and we will coordinate a date and time to meet up and go looking. Courtesy requires that we give seller’s 24 hours’ notice if we can to schedule appointments, unless the house is vacant, so I like to get the list the day before and then I will call all the seller’s or seller’s agent and set up the appointment. That gives the seller’s a chance clean up, remove or secure pets and be ready for you to come through. It is always nice to see a house at its best if you can. Popping in right after they made dinner and all you can smell is tuna salad can really ruin an otherwise lovely house. I usually like to make appointments for no more than 6 houses in a day. That may not seem like much when you are super excited to get out and look, but believe me, any more than that and they all start to run together and you can’t remember which one had the killer kitchen and which one had the weird color carpet in the basement.

At this point we keep going out until you either one, find the house that you absolutely love or two, have seen all there is to see and we now get to keep an eye on your particular little corner of the market and wait for something new to come up. It really depends on how specific you are in your search on whether you will run out of houses to see before you find something. I think it is good to be somewhat broad in your search to begin with or at least know what areas you can live without if we find that we have to expand the search a bit to find more options.

I also find it pretty common for buyers to be pretty specific about what area they want to be in, but then discover after they get looking that there are a few other areas that “aren’t too bad” and decide to expand a bit in the location department. Always good to keep your mind open in that regard just in case.