Buying a house can be so exciting. Once you think you’re ready to make an offer, here are some ways to ensure the process goes smoothly.
Are you sure this is right for you?
Choosing a home requires a balance of intellectual reasoning and emotional attachment. If it’s a smart decision but your heart’s not in it, you’ll be disappointed. If your heart runs the show, you may miss important details.
When assessing a property, consider your personal situation. Will the home meet your needs? Is it big enough. Does the layout work? Can it adjust as your needs change? A two-bedroom home with an office can quickly convert to a three-bedroom home without an office, for example, but a two-bedroom home for a family of six will be feel cramped. A small house on a large lot can be renovated to add space, but a house on a small lot cannot.
Is the home in the right neighborhood? If you don’t drive, is the property within walking distance of downtown? If you have school-aged kids, does the neighborhood school have a good reputation? How long is your commute to work and will that wear on you over time?
Is this a smart financial decision? Do you have enough cash for a down payment and closing costs? Do you have the credit worthiness to secure a loan and the income to make monthly payments without giving up the lifestyle you want? As soon as you start looking for a house to buy, begin getting pre-approved for a loan. The approval process can take some time.
Even if a lender tells you you’re qualified for a certain loan, are you sure you want to spend this much on a house? (Keep in mind, most people’s incomes increase over time, so the payments will feel easier as you go.)
Cross the t’s and dot the i’s
Once you’re sure this is the house for you, work with your REALTOR to craft an offer. Keep in mind, oral agreements have no legal bearing. Also, even if there’s a sign that says, “This appliance stays with the house,” this is not a contractual obligation. If you want the stove, fridge, washer and dryer, hot tub, or any other non-attached personal property, it needs to be specified in the contract.
In California, the standard contract is about 16 pages. No one wants to read all 16+ pages, but I strongly encourage you to do so. Do not assume your REALTOR can read your mind and include everything you want. For example, it’s up to you to create an itemized list of any personal property to be included and any contingencies that must be cleared before the escrow can close, such as financing and inspections.
Once your REALTOR presents your offer to the sellers’ agent, you’ll get one of three replies: a straight-out acceptance, a counteroffer that changes some of the terms (e.g., price, dates of occupancy, what personal property included), or a flat rejection. Assuming your offer is accepted, you’ll move on to inspections and loan approval.
Stay involved throughout the process
Depending on the type and location of the property, I recommend the following inspections: pest and fungus, home inspection, heating and air conditioning, roof, well (if applicable), and septic or sewer lateral. This is not an exhaustive list by any means.
If you can, I recommend being present during inspections. You can learn a lot from talking to inspectors. During the home inspection, for example, you may learn what needs to happen now as well as what you’ll need to prepare for in the years ahead. And again, you must read the inspection reports. If they contain jargon or information you don’t understand (sometimes technical descriptions can sound like a foreign language), don’t be embarrassed to ask for clarity.
If the seller has supplied reports, ask your REALTOR about the reliability of the inspectors they chose. Sometimes a seller will use an inspector who, perhaps, doesn’t meet the level of quality your REALTOR recommends. If that’s the case, consider hiring your own inspector for a second opinion.
Close escrow and move in
Once the contract is signed and all the contingencies are removed, it’s time to close escrow. This is typically done at a title company. Bring a photo ID so documents can be notarized, and make sure your cash is ready to be transferred. Once you close, all that’s left is to move in.
If you have questions about property management or real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.