Go Forth, My Son: How To Buy Your First House

How many of you out there have very little idea what actually goes on during a real estate transaction?  I’m sure there are a hundred questions you must have, but never thought to ask.  Let me try to shed some light on things.  (Afterward, my inbox is your inbox for questions — just hit “comment” or “reply” with anything you’d like an answer to.  If you’d like to not-so-publicly discuss a particular topic, feel free to email me at jeff.grana@gmail.com, or just call me up at 630.306.3537.)

Step 1 is pretty simple:  Pick out a real estate agent to guide you through the process.  You’ll sign a little bit of paperwork initially (which basically says legally, “You’re hired!”), they’ll ask you about your needs for the home, what you like, etc etc, and it’s on to Step 2. (Click this link for a related post about how to find one you’ll work well with from the get-go.)  /

Step 2 is also easy:  Any Realtor worth their salt will have you contact your lender (or suggest a lender you can use, if you haven’t given it any thought) to do a pre qualification.  The reason it pays to be pre qualified is best described as a “built-in safety” for you:  What sense would it make for you to find the absolute most perfect home, only to find out you can’t afford it?  Getting a pre-qual letter (also referred to as a lender letter) is a simple, quick process in most cases.  (Ultimately, of course, it is up to your lender how quickly things happen.)

Step 3:  Now the fun begins.  Time to go shopping!  Just about the time you are getting your Prequal letter from your lender, your agent will have a comprehensive list of properties for you to review.  You’ll “window shop” at first, then pick a few of your favorites to go and see in person.  If you like one enough to want to buy it, you get to move to Step 4.

Step 4 is the next logical progression of the process:  You want to buy a property, now it’s time to tell the owners.  You will sit down for a short time (between thirty and sixty minutes) with your agent, and discuss the ins and outs of submitting an offer (effectively, the one where you win).  (Click this link for a post on how to craft a successful offer.) You’ll decide the terms, the price, contingencies, and the amount you have to put down as a down payment (also referred to as an initial investment).  You’ll also let the sellers know how soon you can move in by picking a settlement date.  The settlement date is the day when both you and the seller will sit across the table from each other, and officially transfer the property’s ownership.  (Typical settlement date timelines generally run between 3o and 60 days.)

Step 5 happens once your offer is accepted.  Effectively what happens here is that the contract which you and the sellers have both signed, gets executed.  The terms dictated within the contract will begin to be satisfied, one by one.

Step 6:  Once the contract’s terms have been executed to the satisfaction of both parties (and according to the region’s laws), Settlement Day arrives shortly after.  Settlement day can be overwhelming at times, but I want you to focus on two things here.  First, much of the paperwork you will sign is copies of the same paperwork in duplicate or triplicate, which must be original and sent to the places that need them.  Second, at the end of it, you’ll walk out with the keys to your new home.  It’s really not much different than signing an apartment lease.

So, in a nutshell, that’s it.  That’s all there is to it.  The whole process, right there.  I hope you have found this to be informative, and again, feel free to contact me at any time with questions, concerns, or if you are in need of my services.  I am happy to help you any way I can.  Have a great week!

Homebuyer Blues: How To Avoid A Terrible Realtor Experience

Credit: bigworldofbeauty.blogspot.com

About a month ago, my wife called me up while she was at work asking me for some business cards and contact info.  A coworker of hers, Jenny* (*all names are changed), wanted to pass my information along to another person in the office because she heard them mention that they would be looking into buying a home soon.  (In the Interest of full disclosure, Jenny and her husband Jim* have been friends of ours for a few years now.)  Geesh–it’s like the Six Degrees Of Kevin Bacon over here!  “So, how’d you meet Jeff?”  “Well, it’s kind of a weird thing…”  Heh.

Flattered as I was, Jenny later told me when we next met that she and Jim had a really terrible experience with their Realtor, and since she couldn’t refer theirs, she wanted to refer me instead.  Always wanting to learn and grow in this business, I asked her why their realtor hadn’t been up to snuff.  These are hard-won lessons sometimes, and I wanted to make sure I was providing the level of service that was opposite of what their guy had been.

“Oh man,” she said, “he didn’t listen to us at all.  It was like we were taking up his time when we had questions, or any time we weren’t out looking at homes.”

Jim chimed in, “He kept taking us to places that were either out of our price range by sixty or eighty grand or dumps that were way under, the places we did like were already under contract when we got there, and it seemed like he could care less about us.  I almost punched him once, I was so angry at him.”

Woah.  At first I thought, “This guy really makes us look bad,” but that was quickly followed by, “This guy makes my job really easy!”  

As we’ve covered before, it’s generally in your best interest to hire a Realtor like me, but there is an easy way to avoid service like this.  Choosing a Realtor is not as roll-of-the-dice as you would expect, where you have to just hope you’ll “get a good one”…it really comes down to three simple things:

First, when you are getting into the process, I want you to treat your Realtor as someone whom you are hiring.  The truth is, you are hiring them as an independent contractor for their services.  Find someone who wants to earn your business, not the commission.  Interview at least three — preferably five — before making your final decision.

Second, make sure the Realtor you pick is either independently experienced, or backed by a mentor or support team if new.  That’s what I did.  I want to give every one of my clients the most stress-free experience possible.  Being new in the industry, I knew that couldn’t happen until I had a couple of transactions under my belt, but I wasn’t willing to let my first few clients be guinea pigs.  I hired a mentor to help me handle the things I didn’t know or wasn’t prepared for, and it has served me all the better for it.

And finally, pick someone you like.  Pick someone you get good vibes from during the consultation.  Everybody’s personality is different.  It is entirely possible, for example, that two Realtors are equally likable and equally qualified, but their personalities and approaches are different.  One agent might be trying to give you the speediest transaction for the least (or most, if he’s a listing agent) amount of money, and has a plan to do so.  The other agent might spend more time learning the story of how your oldest dog (three dogs ago) lost its hind legs, and that’s how you came to have Fluffy III.  If your personality lends itself to wanting a more intimate Realtor/client relationship, choose number two.  If you are someone who is more focused on wanting results, number one is your best bet.

As a short fourth point, I’ll mention that you can always choose to fire your Realtor if he or she is not performing.  I’ll cover the ins and outs of this in a later post, but just keep in mind that no part of your relationship with this person is forever, unless you want it to be.

I hope this helps ease your mind.  Have a great weekend, and Happy Home Hunting!