Home buying or selling: a primer

The Process

So, you’ve been sitting at night watching re-runs of Flip This House and Designed to Sell and have made the decision to either buy or sell a home. What can you expect to happen during the process? Who can you count on to assist you through the various parts of a decision that, by all accounts, will be one of the most impactful of your life?

There are portions of the home buying process that are almost identical to those you will face if you are selling your home. The first thing to remember is that it takes time. Probably more time than you have been led to believe is the case.

If you are selling your home it will take weeks to get ready to sell, weeks more to elicit an offer, and up to a couple of months to actually close a successful transaction. And all this assumes, of course, that you did your due diligence on the front end and positioned your home at the proper price point after getting your home into “show shape”.

Remember you can’t have a closing without an accepted offer and you won’t get any offers if you’re not in show shape and properly priced.

Buyers can compress the process somewhat in that they can find a house in a weekend and close within a month if all the parties to the process are working well together and your agent knows what you want and need in a home.

Either way, it will serve you well to remember that it takes time to work through the residential real estate process for both buying and selling. If you know you have to be either sold or into a different home by a certain date, be sure to start several months ahead of time.

Here is a good tip for both buyers and sellers that have time constraints. If you are selling and need to be moved by a certain time, list as soon as practicable, even if you are months away from your deadline. For example, if you are building a home and it won’t be ready for 10 months, list your house now. You can always stipulate that the closing must take place when it is convenient for you and you expose yourself to the maximum number of potential buyers by doing this.

If you are a buyer and know you need to be moved into a house in six months, start the process now. Even if you won’t be financially ready to buy now you can certainly do many other things to ensure that, when the time is right, you are ready to move on the absolutely perfect house and get things done in the least amount of time and hassle as humanly possible.

The Players

When you first get the urge to buy or sell a house one of the initial things you’ll consider is whether to use an agent or go it alone. From a seller’s perspective using a listing agent enables you to get your house before the absolute maximum number of buyers through inclusion on the MLS. As a buyer you get to have a professional negotiate on your behalf. So, choose a Realtor that does real estate as a full time career.

There are numerous other reasons to use an agent and we won’t go through them here. Suffice to say that most do use an agent and there are probably very good reasons why you should. But the decision is yours, and, of course, I’m biased because I’m an agent.

Once you make the decision to use an agent take some time to choose one with which you feel comfortable. There are many fine agents in the area and, of course, I’d love to have you choose me for your agent.

Who you choose is less important, in my opinion, than what the agent does. If there is one thing you should insist upon is that your agent is a professional and is engaged full time in the profession. You wouldn’t use a part time attorney or CPA, would you? How about using your barber to perform brain surgery? Maybe you’re comfortable with a full time teacher selling real estate part time, but I can categorically tell you that the full time agents are better negotiators, more fully informed, and conduct themselves more professionally than a part timer.

You deserve the very best representation available so make sure you get a full time professional.

The choice is yours, of course, so choose wisely and only use one agent in a transaction. People that use more than one agent set themselves up for potentially confusing situations that could end up costing them money.

Once you choose an agent be sure to keep them fully informed of all aspects of the process. Some people are either reluctant, or negligent, in keeping their agent fully apprised of what is going on. This can be a huge mistake and, if there are glitches along the way, can lengthen the entire process.

Once you’ve made the recognition that the process will take some time and chosen an agent with which to work that you are comfortable with it’s time to sit down and come up with a plan. House hunting can be very tiring and frustrating if you aren’t real sure of what the end game will be and keeping a house in show shape is exhausting.

Spending a couple of hours to outline the type house in which you are interested or how to properly stage or price your home for sale is a wise use of time. Your agent will be impressed and it will, if nothing else, fully educate all involved for a smoother process.

Flexibility is Key

Invariably there comes a time in either buying or selling a home that something unforeseen or unusual arises. When you are counting on moving and have everything planned out to the greatest extent possible it can be disheartening to receive a call that something has gone wrong.

At times like these it’s wise to remember that being flexible can be a huge asset during the process. Most of the time the problems that crop up can be fixed with the right amount of work and effort on the part of everyone. It is rare that a deal completely blows up over something that’s not related to financing. Just remember that in six months the angst you feel now will be a distant memory.

The Done Deal or Dead Dog

When is the deal done? How do you know if the deal is really dead?

Although there are exceptions to every rule on the buyers side of things you can expect the deal to really be done when the lender obtains “final underwriting approval.” This typically happens about a week before the scheduled closing and is the final authorization by the lender that the buyer will get the mortgage.

Before that, buyers will be dealing with pre-approval letters of authorization, a formal mortgage loan application, requests for information from the lender, an appraisal process on the target property, and many other things that can impact the successful close.

Sellers should expect an inspections period after the purchase agreement and any addendums are successfully executed. After that, the lender will order an appraisal and the closing company will order the termite inspection. After any work requirements are satisfied to the lenders satisfaction, title work is done to determine if the deed is free from any material defects that could impact successful fee simple transfer.

Many things can happen along the way to make the closing seem impossible. Most deals do eventually close, however, and you should not be unnecessarily concerned that one in which you are involved does not. It does make sense, though, to keep your agent fully involved and informed at every step of the way. They are, after all, working for you and want the deal to get done as much as you and avoid the dreaded “dead dog.”