Buying A Home, Part 2

By now, you’ve found your ideal REALTOR® and lender, and you’ve worked through the initial financial process, so you know how much home you can afford. Great! The next step in getting from “For Sale” to “Welcome Home” is to find your new home.

Touring Neigborhoods

When you ask your REALTOR® to find the perfect home, one of the things you will be asked is “Where do you want to live?” The location of your home is just as important as the home itself. Start by making a list of what is important to you. Some examples are: schools, proximity to work and recreation, nearby parks, or walkability. Do you prefer an urban, suburban, or rural feel?

Once you’ve picked a few towns or areas, take some time to tour the neighborhood. Drive out there at different times and try to imagine yourself there. If you still like the area, go ahead and map out how close it is to your regular haunts. You can even “interview the grocery store”, which means walking through it to make sure that they have everything you buy on a regular basis. This will help you narrow down to 1-2 preferred areas, with some potential backup areas, if needed.

Seeing Homes

This is the fun part! After you have found the right location, you and your REALTOR® will pick a set of homes to see in person. This should be based on your initial consultation with your REALTOR®, in which you discuss your needs and your wants for your home. There is no perfect home, but in the right home, you can expect to get all of your needs and most of your wants.

In general, people see about 10-12 homes before making an offer. It’s also best not to plan for more than 5-6 homes in a single day (after that, the homes start to run together in your mind). As you are looking at homes, keep a ranking in your head of the top two homes. This will enable you to compare each home to your top two, and determine quickly whether it’s still in the running. After 1-2 trips, you’ll find that the right home will stand out to you.

Submitting an Offer

You’ve picked an area, and you’ve found the home. Now it’s time to submit an offer to purchase your home.

Your REALTOR® will walk with you through this process. The REALTOR® will have a handle on how the market is doing, and can recommend the terms to put into the offer. All of the terms are negotiable in an offer, not just the price. These terms can include contingencies, inspection, included appliances, and closing date as well as the price. Once you’ve signed the purchase agreement and submitted it to the seller or the seller’s agent, then it’s time to wait. The seller has three choices: to accept the offer, to reject the offer, or to make a counteroffer. While the third option is by far the most frequent, the other two options do happen, depending on the market and the offer.

The kind of offer you write must take into account the current market. For instance, in a hot seller’s market, especially if the house has not been on the market long, an offer of less than 90% of the list price will not impress the seller. In a hot buyer’s market, you may be able to submit a lower offer. Your REALTOR© will advise you as to the appropriate terms, and may be able to predict how the seller is likely to respond. However, the choice of what to offer is always yours.

Assuming that you can agree on a purchase agreement with the seller, you will then have a signed purchase agreement and associated documents, and will be able to start planning for the next step!

Next Month: Inspections, Appraisals, Loan Commitments, and Closing