Whether this is your first or fifteenth real estate purchase, it’s important to start in the right place.
As you’ve probably already figured out, this website is designed exclusively to help you find your perfect home. And we hope you take full advantage of the real estate searching tools we’ve provided! But before you find the home you “can’t live without”, it’s a good idea to make sure it’s a home you can live within, i.e., you’re qualified and ready to purchase real estate.
Loan pre-approval.
Whether you want to make an offer on a property next week or next year, it’s never too early to speak with a qualified mortgage broker about getting pre-approved for a home loan. Even if you’re aware of issues with your credit, lapses in employment, or a past bankruptcy or foreclosure that could prevent you from qualifying to buy a home, your very first call should be to a mortgage professional. They can help assess your situation, give you valuable advice on how to fix problems with your credit, help determine “how much” house you can afford, and might even offer loan programs that will provide government help in the form of down payment assistance or reduced mortgage interest rates. Certain government-backed home loan programs have recently changed their restrictions on how soon after a bankruptcy, foreclosure, or short sale a consumer can purchase a home, so you might be able to buy a home sooner than you thought and not even know it! On the other hand, it’s not uncommon that buyers assume they’re “well qualified,” when in fact there are “derogs” (derogatory marks on their credit report) that they’re not aware of (and aren’t even their fault)! A recent study concluded that 40 percent of Americans have derogatory marks on their credit that they were not responsible for. Erroneous marks on a credit report can usually be removed quite easily, but only if you know they’re there! The better your credit score, the lower your mortgage payments will be, so every prospective buyer owes it to themselves to have a conversation with a mortgage professional before they start shopping for a home.
Now the fun begins!
Once you’re pre-approved for a home loan, it’s time to shop!
As soon as you receive a letter of loan pre-approval from a good lender, it’s time to find your perfect home! It’s important to start by identifying your “wants and needs”. . . Location is the most important factor for most buyers, so you might start by searching the neighborhoods you like most and determining whether your budget will allow you to buy a home that you truly love in that area. Or maybe the house itself is what’s most important to you. If this is the case, you might start by doing a broad search (maybe include all of King County) and find out where homes with the features you want (3+ bedrooms? Over 2000 square feet? Large back yard?) can be found for a price you can afford. If you take this approach, you will find the mapping function on our website especially useful. . .
Time to tour!
Once you’ve located some houses you’d like to see in person, contact your local real estate professional. HINT HINT: the person who owns this website also sells houses and condos! Once you request a tour, you can rest assured that your information is sent directly to a real, live licensed real estate broker, NOT a telemarketer in a call center. All your information is held in our secure database and is never shared with anyone, nor do we “spam” our clients. We will contact you as quickly as possible to discuss planning a private tour of the properties you’re interested in viewing.
You found the one!
It’s not uncommon, especially when a home buyer has been looking at listings online for weeks (or months), to find the perfect property the very first day they’re out touring homes. But buying a home is a huge decision and not something to rush into. You might have to tour 10, 20, even 30 homes before you find the right one for you. You might also want to wait for the perfect listing to come along. If your real estate agent is making you feel pressured or rushed, you’re not working with the right agent! Be respectful of your agent’s time, but understand that ultimately, we work for you. We are your advocate, your adviser, your professional representative. But you are the boss. It is NEVER a real estate agent’s job to tell their client which home they should buy. That is a decision only you can make!
Time to make an offer.
Once you have found the perfect home, it’s time to make an offer. Your real estate professional will help you strategize to create an offer in which you get the best deal possible, but the seller still finds the terms of your offer acceptable. In this competitive market, you may be in competition with other buyers for the same house or condo. It’s important to know that there may be things you can do, aside from offering more money, to make your offer attractive to the seller. Some of these strategies include performing a pre-inspection of the property, offering a larger earnest money deposit or a higher down-payment amount, or waiving certain contingencies that might otherwise be written into the contract. Nonetheless, it’s important to keep in mind that if the competition for a property is truly fierce, you may have to offer the seller more than asking price for the home. If you decide to do this, your agent can discuss how an “escalation addendum” might be added to the contract so that you can beat the other parties, without paying too much. . .
What’s next?
Once your offer has been submitted, one of several things can happen. The seller may accept your offer with no changes. The seller may flat-out reject your offer. The most common occurrence is for the seller to make a “counteroffer”. In a counteroffer, the seller negotiates changes to the contract and offers you the ability to either accept their counteroffer, reject their counteroffer, or counter them yet again. The offer/counteroffer process continues until you either let the deal “die” (no more counteroffers, no middle ground with the seller, the transaction is “dead”) or you find mutually agreeable terms, known as “mutual acceptance”. Once mutual acceptance has been reached, the transaction can proceed and several things begin to happen. . . Escrow for the transaction is opened, which means your earnest money is deposited with escrow. A preliminary title report is generated for the property by the title company. Home inspections, feasibility studies, neighborhood reviews can take place. If they didn’t already provide one, the seller will give you the “Form 17” seller disclosure statement, telling you everything they know about the property. More negotiations with the seller may occur after inspections are performed. Your bank will hire an appraiser to appraise the property. If the property appraisal supports the amount you’ve offered to pay for the property, your loan file will enter underwriting. If the property does not appraise, more negotiations may occur. Once your purchase of the property has been approved by your lender’s underwriter, your lender will draft your loan paperwork and your escrow company escrow will create a “HUD statement” (a single document that shows where all money in the transaction is coming from and where it’s going). Escrow will schedule a separate signing appointment with you and the sellers. They will also help you to arrange payment of your down payment and closing costs, either by a wire-funds transfer from your bank or by cashier’s check. Escrow will send your loan documents back to your lender for final review. On the day of closing, escrow will “release to record.” That means that all monies are accounted for, and the only thing left to do is record the deed to the home in your name at the county clerks’ office. Once the deed has been recorded, the house is yours and your real estate agent can give you the keys to your new home!
The process sounds very complicated. And in truth, it is. But when you partner with knowledgeable and experienced professionals in real estate, mortgage, escrow, and title, your transaction should go smoothly and should not create any additional stress in your life. . . Simply buying a home is stressful enough already!
If you’re ready to start the process, contact us and we’ll be happy to put you in touch with an excellent mortgage lender who can pre-approve you for a home loan that perfectly matches your needs!