We’ve all been there! We all know what the search is like.
You’ve scoured the Internet for days, or weeks, OR MONTHS! You’ve driven around town until you know every pothole in the roads. Not one single home has met your criteria for a dream home…until one night, in the darkest hours of the day. There it is! That perfect beacon of loveliness that has the perfect number of bedrooms, large yard, hardwood floors, and a basement (hey! Everyone needs to hide from the kids at some point, right?). That AMERICAN DREAM is also sitting in the neighborhood you’ve always wanted to live in! And the icing on the cake? …at $250,000, it can’t have a mortgage payment much higher than the $1200 rent you’re throwing away to make someone else wealthy, right?
Well, it’s not that simple! Before you give notice on your lease, pack your bags, and register the kiddos for school, you should know a few things.
TOP 10 ITEMS YOUR REALTOR NEEDS YOU TO KNOW
- Create a list of “must haves,” “would be nice,” and “no way will my house have _____.” Your REALTOR needs to know what to look for in a home. If you know you have deal-breakers, include them!
- In Georgia, to represent you as a client, your REALTOR will ask you to sign an Exclusive Buyer Brokerage Agreement. Be prepared to do this as soon as you speak to an agent. The agent is not trying to trick you into anything; this document is required in the state of Georgia and actually protects YOU! Without it, your agent can only offer you ministerial acts and treat you as a customer, meaning you don’t get the sage advice you’re actually trying to hire an agent for! This agreement forces the agent to get to work for you and put your best interests first!
- Speaking of hiring: not many people I’ve worked with so far understand the work or pay of a REALTOR. Your REALTOR is working a 100% commission-paid job. That means she’ll work hours, weeks, months for you before she sees a check. We love our work, so that’s not a deterrent. But you should know how that commission is split; your agent doesn’t get it all, only a small portion of the commission paid on a sale. Not to go too deeply in, but the commission (perhaps it’s 6%) is usually paid by the seller and split equally by both agents in the transaction: the listing agent’s broker gets half and the buyer’s agent’s broker gets half. That 3% that your agent just got for helping you through the process will now be split with his broker, depending on their agreed upon split (so maybe your agent gets a check for 1.65% of the sales price). Out of your agent’s check/pay comes transaction fees, MLS fees, training expenses, taxes, license fees, marketing fees, desk fees, gasoline, copy expenses, and a multitude of other operating expenses. The cost of doing business adds up fast, and your REALTOR is probably an independent contractor, working for themselves, building their business one client at a time.
- Understand there’s more than one person involved with scheduling. You want to see that gorgeous masterpiece of the perfect abode now; we get that. But the person who is actually living in it has a schedule that must be kept too. And unexpected things happen. So when we head off to look at houses (we might have 3-8 on our list today), some may be canceled or rescheduled. It’s the nature of the beast. Be patient. You’ll get in; we want desperately to show you that house!
- Get pre-approved! The confusion with this one baffles me every day. If you want to buy a house, you have to get a mortgage (unless you have that money in the bank). The pre-approval takes awhile, depending on how organized you are with all your documentation. You need to gather financial and job records for the last two years, maybe longer depending on your specific situation. You’ll need a fair credit history; different lenders have different standards and offer different products…it’s okay to shop around for a lender. Getting pre-approved before you speak to a REALTOR will get you in a house faster, and isn’t that what you want? This simple document allows you to know what you can afford in a mortgage, which is different from rent. Also the owners of all those homes you want to see need to protect their investment by allowing in only buyers who can afford their home. Your agent will probably expect a pre-approval BEFORE opening even one door for you, so go ahead and start with this.
- Once you get pre-approved, don’t buy anything! I mean it; there’s no exaggeration in that statement. Do not apply for store cards; don’t buy the furniture for your new home; don’t move money from one account to another; don’t pay off debt; don’t accept money owed to you by someone else; don’t co-sign a loan for your dear sweet auntie…nothing. If you’re sitting on the verge of loan approval, even the smallest inquiry on your credit will lose your mortgage for you! That 20% you MIGHT save on your $50 purchase at the department store isn’t looking so great now, is it? Don’t be tempted! Do the same thing with your money that you always do. If you usually spend $120 on your gas card, keep doing it. But don’t do anything OUT OF YOUR NORM until you sign those papers! Your credit will be checked multiple times during the buying process (all soft hits after the initial check, so you’re good) because your lender needs to make sure you’re a good gamble for them. You can do this; it’s a temporary sacrifice to make your home-owning dreams a reality!
- Time is of the essence. If your agent asks you for something, be prepared to get it as quickly as possible. Time frames are very strict when contracts are involved, so if something is requested, get it. This can be as simple as being asked for the top five houses you’d like to see this weekend. Don’t delay.
- Know about your Due Diligence period. In Georgia, and with only a couple exceptions, buyers get a negotiated time period where they can pull out of their contract for any reason with no explanation! This is when you order your inspections! Pay for your inspections so you’ll know what you’re buying. Don’t skimp here. There are so many things you should do during this time. I advise my clients to drive the neighborhood at different times of the day, make the drive to and from work from the property, check the sex offender registry, order a Wood Destroying Organism inspection, check the crime reports, look at the zoned school ratings, talk to the neighbors. Depending on the age of the property you might want a lead-based paint inspection, mold inspection, or radon inspection. There are things your REALTOR can’t report to you (by law) so it’s up to you to be diligent and find that out yourself. You are given this time period to find out everything you can about the property; do it! It’s in your best interest to be nosy! Also if you’re going to exercise your DD rights, don’t wait until the last moment. Your agent needs time to complete the paperwork.
Read my post containing more information about the Due Diligence Period
- Buying a home doesn’t happen over night. At this moment, it can take 45 days for a conventional loan to be ready to close. What that means to you is this: you’ve found the one; you made an offer that has been accepted by the seller; the clock starts now. From the day you have a binding agreement it will be 45 days longer before that house is yours! The financing documents take awhile to gather. Be patient here. If you have a VA or FHA loan, you’re going to wait even longer! Be prepared going in so you don’t feel rushed. Basically what I’m trying to say is call a REALTOR before you “need to move next month.” It won’t happen that fast (unless you have that money in the bank).
- There’s a lot that goes on behind the scenes. Many people believe an agent’s job is easy. After all, how hard can it be to unlock doors all day? Like every other profession in the world, there’s so much more to it than what you see, and here’s a shocking revelation: you’re not your REALTOR’S only client…so all the work you see her doing, she’s doing it x2 or x3 or x10 or x20!. Try to notice all the things that seem to just happen when you’re around your agent; you’ll be amazed at how easily a good agent can manage multiple clients and negotiations without breaking a sweat.
After reading this list, you’ll have a good foundational understanding of what to expect in the initial stages of your journey. Even if you’ve bought a house before, you know the market is different now than it was then. It’s always changing, which is the draw for me: new adventures every day. I love helping clients find the home they will sip their coffee, chase their dogs, raise their families in! And educating them about the process is just as rewarding to me as handing over those keys on closing day! Feel free to reach out to me when you’re ready to start your journey. I’ll get you moving!