By Celeste M. Smucker –
There is a lot of excitement about the 2018 real estate market and sellers are happy to see their homes move quickly from listed to sold at prices that make them smile.
For buyers this a more challenging market as dwindling inventories of homes for sale leave them with fewer options and force them to move quickly when they find one they like.
It’s still a good time to be a buyer, however, as interest rates are historically low and prices, while rising, have not yet returned to what they were before the recession. The best piece of advice for buyers, then, is “to understand the process so when you find the right home, you will be able to act as quickly as possible,” says Michael Guthrie, CEO of Roy Wheeler Realty Co.
In other words, if you are a home buyer the only way to take advantage of the good buys still available, while you lock in a favorable interest rate, is to be prepared. Fortunately your local real estate professionals, both agents and lenders, stand ready to help.
The first step is to find a REALTOR® and “put trust in them” as the experts who have helped many others through this complex process, says Jamie White with Montague, Miller & Co. – Downtown. And while the process is always complex, in this fast paced market it is even more so, meaning buyers who hesitate frequently lose out.
Part of being ready is to familiarize yourself with the amenities of the different areas in our region and think about the house features most important to you. Your agent can then “help you fine tune your search for a home (new homes and for sale by owners included)” that will have what you want at an affordable price, Guthrie noted.
Especially if you are a new buyer, it is also a good idea to get comfortable with the home buying process. A good resource to help you get acquainted with the terminology, the procedures, and the requirements for buying a home, is the Piedmont Housing Alliance (PHA), suggests Julia Morris with Fulton Mortgage.
Buyers must also contact their local lender about getting pre-qualified to purchase a home. If you don’t have one in mind, your agent can refer you to some trusted lenders they work with, Guthrie says.
The lender’s job is to determine whether you qualify for a mortgage and how much house you can afford. They can also advise you about the type of loan that is best for you and educate you about down payment and closing cost assistance that is available, should you need it. For those with credit issues, they can help with a program to get things straight or refer you for counseling at PHA.
The lender will also write a letter that states the amount of home you qualify for. When you find the one you want, your agent will include this letter with your purchase offer to assure the sellers that you are good for the money and will be able to follow through on closing day.
Having this lender letter in hand is essential before you start looking for homes since it will be difficult to get an offer accepted without one.
Negotiation and Contingencies
A big part of your agent’s job is to help negotiate the best possible purchase contract, one that meets your needs on issues such as price and move-in dates. But they will also advise you on the best way to structure your offer to meet the sellers’ needs, keeping in mind the very competitive market we are in. This means, for example, if price is an issue, you may need to offer a bit extra if you want the seller to pay some of your closing costs, Guthrie advises.
Most purchase contracts are contingent on getting a professional home inspection, and while these are optional and can be waived, Guthrie strongly recommends doing the inspection. He also suggests talking to your agent about the advisability of obtaining home warranty protection.
Your contract is also contingent on receiving loan approval. Even if you are a great candidate for final approval you need to be aware of some pitfalls such as running up credit card debt prior to closing. Talk to your lender about what you can and can’t do and definitely don’t borrow money for major purchases like a car or furniture.
Once the home inspection is completed and any additional terms negotiated, much of your work is done. However your agent will keep in close touch to help you with things like choosing a closing attorney or settlement company to handle the legal documents you will sign at closing. They can also help you find an insurance agent to provide hazard insurance for your new home.
The closing professionals will work with you, your agent and your lender to make sure they have all the information they need to complete the paperwork. Keep your phone on and respond quickly to requests for information so as not to hold up the process.
While the closing process can feel stressful at times, your REALTOR® will be there for you all along the way, and “the more informed and prepared you are, the smoother it will feel to you,” Guthrie advises.
You will also have a team of other real estate professionals working with you and your agent and your lender to get you through it with as much ease as possible so you can focus on how much you will enjoy living in your new home.
Celeste Smucker is a writer and blogger who lives near Charlottesville.