Buying/and or selling From a Realtor to you

So recently, I have come across many people who have a lack of understanding as to the buying and selling process. Resultant, I am making a list so those interested in pursuing the endeavor of buying or selling a home…
First and foremost, this is an ever-changing process. I have people that have sold and bought multiple times that do not thoroughly understand that RULES CHANGE ALL THE TIME.

The very first step to selling a home is to….drum roll please****

Find a Real Estate professional to provide you with an adequate Comparative Market Analysis. This will give you an idea of what the current market conditions look like and help to provide a value range of what your home could sell for in the “current” market. As many are not aware when they move to a different city, things are not the same in every city, county, or state. They do vary… Now, specifically, the county that I reside in, Harris County, Texas, is what we refer to as a closed state. You cannot go to Zillow or any other state and see what your neighbor sold their home for. The only real way is to either A. Ask your neighbor
Or-
B. Contact a Local Real Estate Professional to take the guess work out

When a Professional tells you what they feel your home will sell for, always get a second opinion, don’t try to tell the REALTOR what you think your home should be worth. The other option is to get an appraisal if you are second questioning. This can range in the ballpark of $375 and up. It is important that you understand the process can take time. It is not always going to be instantaneous.

Market conditions vary from every single location and although your neighbors’ home may have sold quickly, there could be various reasons for that. 1.) The upgrades

2.) Systems in the home (i.e. roof, HVAC, hot water heater and or amenities) were more recently done

3.) The design of the home

4.) Functional Obsolesce may or may not exist and or

5.) Timing the sale right.

Being a professional for over a decade, I have always strived to keep my clients in the loop. I want them to know and understand that while some deals can be clear cut, others can take time. As I previously indicated, timing is everything and the Market today, while good, can change very quickly.

** DISCLAIMER**

Let it be known, your REALTOR does not have a crystal ball. I know, it is hard to believe, we cannot foresee the future. But, through tracking/trending, understanding economics and the local markets they can definitely help both buyers and sellers alike with the timely decision as to when is best for them to buy and/or sell. There have been those few occasions in my professional history, that I have had clients with unrealistic expectations and then there are some that are professionals over night and because they have bought and sold multiple times, feel they know best.

Now, when you are in the process of trying to buy a home, no matter your first time or your tenth time, you MUST OBTAIN a prequalification. This prequalification is not a “guaranteed” loan. It is a lender overviewing your financial validity. They want at least 2 months of paystubs, 2 years of W-2’s or taxes, what kind of reserves you have (reserves being they want to make sure you have at least 2-3 months of mortgage payments set aside). Reserves can be in a savings account, a 401k, a CD, Bond or some other asset that can be liquidated for cash. They don’t want to see large untraceable funds hit your checking or savings account with no way to justify it. So, if you have money in a pillowcase or mattress, don’t go out and deposit those funds into an account without justification. This isn’t just explaining that you had this large sum of cash at home you pulled out of a wall. The lender wants to make sure you are on the up and up. Don’t go pull out credit when you are trying to buy a home. No Car loans, personal loans, credit card increases that can hinder your overall financial viability. Often, people make this mistake and then they cannot purchase the home they just purchased all their furniture for.

Now, once you have a prequalification, you go shopping for a home you could see yourself in. In a sellers’ Market, it is not very likely that they are going to come off their price by thousands. If they are priced right, they will have multiple offers so you have to be competitive. By competitive, it means that you can ask for shorter option periods (inspection days), larger escrow deposits (something you give the owners title company to show good faith) which is money that goes towards your down payment if you follow the terms of the contract, asking for less of a seller contribution to closing costs or offering just above list price to procure the home. Don’t forget to ask for Sellers disclosures about the home so you can overview them and make sure everything is to your liking/understanding.

Once your offer is accepted, you get a fully executed bilateral contract. This means that both signature from buyer and seller are on the contract, the money is deposited in escrow, your contract is sent to your lender with a copy of the escrowed funds and the inspection period commences. Now, it is in this time frame you finish your application with your lender, if you already have not.

During the inspection period, you, the buyer, hire a licensed and insured home inspector of your liking to perform a complete home inspection/termite inspection/septic inspection/well inspection. This can range from $400+ pending what systems exist on the home to be inspected. Pending the outcome of said inspections, during the “option period,” you can either accept the home in its current condition, renegotiate the contract or walk away from contract. Don’t back out after the option period has expired unless you have been denied for the loan, otherwise, you jeopardize your escrow deposit. Once this step is done and all parties are satisfied (both buyer and seller) the appraisal is ordered from the lender pending your conditional pre-qualification and all your income information, w2s and banking info has been submitted.

Now, appraisers right now in our area are taking a little longer than normal. After all, we are in a Pandemic, coupled with ULTRA low interest rates, lots of refinancing and many financing options… This can take about 2 weeks from the time it is ordered. It is not a quick process at all, especially if you choose certain loan programs over others. So at this stage in the game, your file has already gone through a preliminary review, you submitted your complete financial history and any other required documents that have been requested. The appraisal has a deadline date on it from your lender. The lender is waiting for this last bit of information. When they get it, they go over the final figures and scrutinize the appraisal report to verify it is concise. Once that is done, it is released to the REALTOR representing the buyer. Pending the results of the appraisal, the Listing agent is contacted and it either is good and appraised at the contractual price, or--- the alternative, it is less than the contracted price. In this instance, the buyer has the ability, pending how the contract was written to renegotiate the contract, walk away or accept it and pay the difference. Some of the things to consider in this scenario is A. Do you have the money to pay the difference from what the home appraised for to the contractual price B. Is there wiggle room with the seller to reduce the price based on the appraisal C. Can you meet the seller in the middle OR- D. You walk away from contract—Again, this is pending how the contract is written and if it is written correctly and you are within the deadline dates, you have the ability to get your escrow deposit back. All of these situations are dependent upon how you feel about this home you have under contract. Can you replace it for less? Are there many of that same home on the market with the amenities you love? These are all questions you have to ask yourself.

Pending the final negotiations on the appraisal, the insurance is ordered by the buyer on the home, but only if you are proceeding with the purchase. Now, when you order the insurance, I always suggest get various quotes from several different insurance companies. It is about saving as much as you can on the overall monthly output but still attaining a good coverage for those incidentals that COULD occur. Mother nature is crazy, we cannot predict if a tsunami, hurricane, tornado or just something as simple as a tree falling on your house. Making sure you are financially stable and have the needed coverage with the lowest deductibles, highest insured value for the lowest annual fee. This is primal for your own financial stability. Once you have your quote, you send it to your mortgage lender and they put that in your file while it goes back in for underwriting review.

This is the important part. The lender reviews the file completely, appraisal and any additional documentation they requested. This requested paperwork could be as simple as a letter to explain why you recently changed jobs or maybe you just got divorced, your paying child support, or—they just found out you have a lien from the IRS that needs to be further analyzed. Once they have a complete profile, the underwriters will ask you questions and pending the outcome, will finally give you a LOAN COMMITMENT, or, more stipulations that have to be met to make the loan, --or lastly, they will deny your loan.

So, let me be clear again, just because you have a prequalification, does not mean you have been APPROVED. A loan commitment can happen as soon as three weeks to thirty days. Time is of the essence in any Real Estate Transaction and it is imperative you know your timelines, understand things are always changing and never be closed minded. After all, we are all working to attain the same goal. You wish to either buy a home, sell a home or rent a home and we are here to help you get there. Real Estate Professionals are your automobile to attaining those goals and it is a REALTOR that puts his/her client above themselves.

As a seller, be honest with your REALTOR about your intentions. We can work miracles, but often miracles take time. We are not your punching bag when things don’t go the way you feel they should go. We are human too and do unto others as you want done unto thyself because like you, we have a choice too on who we represent. If you are hot about something, just know we handle things that are only in our control and we are not Appraisers, Lenders and or have the ability to tell if it is 100% definite your home will sell once it is under contract. We only have the ability to tell you what we know and that is always to err on the side of caution, continue to make your mortgage payments and until you are at the closing table it is never 100%. The buyer of your home could lose their job before closing, they could get into a major accident, or god forbid something else that is completely out of the control of the normal human being.