Q: I want to buy a house, where should I start?

A: Along with connecting with a Realtor like myself, the next best thing would be starting the loan preapproval process. This critical step will help you figure out exactly what is the maximum you qualify for, as well as what your comfortable budget might be. If you need recommendations for loan agents, I'd be happy to share some contacts.

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Q: How long does the process usually take?

A: After getting preapproved with a lender, it can take on average 1-4 months of house hunting to get into contract for a home. After we get the offer accepted, the escrow period typically takes about 30 days. Note in a strong seller's market, it's common for them to request a "rent back" period (usually 30 days) after closing, which essentially allows them to stay extra time and/or have more time to find a replacement home. Factoring in a potential rent back period, the total process can take anywhere from 3-6 months until we get the keys.

 

Q: What else do I need to make an offer? 

A: The purchase contract documents would be the most essential piece. To complete our offer package, I would strongly recommend that we include two other items: (1) a loan preapproval letter and (2) verification of funds. 

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Q: What exactly do you need for the verification of funds?

A: The point is to show the seller we have the money to complete the purchase. For these proof of funds documents, we can use any kind of bank or stock statements, even retirement accounts. Since this is an informal process, even screenshots are acceptable provided your name & the account balance are showing.

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Q: What is a contingency in the purchase agreement? 

A: A contingency says you will buy the home, as long as a particular event occurs/does not occur.

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Q: What is the appraisal contingency? 

A: Before the bank gives you a loan, an appraisal is done to justify the home's value. Note if the value comes in low, the lender may ask you to cover the difference out of pocket. The contingency says you will buy the home, as long as the appraisal comes back at or above a specific price.

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Q: What is the loan contingency?

A: The contingency says you will buy the home as long as you qualify for a loan. You can also get more specific with the terms like max Interest rate or points paid.

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Q: What is the inspection contingency? 

A: Including this contingency gives a buyer the most amount of flexibility with the offer. This is the time to complete all investigations, order inspections, review disclosures, neighborhood research, etc - these material facts can technically be used to renegotiate or back out of the deal.

 

Q: How long is the offer valid for?

A: By default the offer is valid for 3 days from the time it is signed, unless we specify a certain date & time.

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Q: Can I buy a (new) home based upon selling my current home first?

A: Technically yes - the purchase agreement does have a contingency for sale of home, but the chance of getting that kind of offer accepted is extremely low. For both flexibility and total length of escrow time, the likelihood is most sellers would not want to take the chance on a buyer with that kind of contingency. In a scenario where this could have an opportunity, the property would have to be sitting on the market and/or with low activity, the buyer willing to add an extra incentive, and with the seller willing to take a chance. Otherwise, there are a few different ways to structure the timing/moves based on what routes you prefer with the current home (i.e: rent out, sell now, sell later), feel free to reach out if interested!