When working with buyers, the easiest by far are seasoned investors. They are experienced, savvy, know what they are looking for, the return they are expecting and as long as the property and numbers align, they move quickly. It’s a transaction defined by the raw numbers and very little if any emotion goes into the process.
At the opposite end of the spectrum are first time residential home buyers. These buyers are usually younger which translates into less life experience and they often have unrealistic expectations what their money will buy. It’s common for them to expect perfect floor plans, perfect condition and highly negotiable sellers. These buyers require allot of education and coaching if the search is to be successful.
I like to start with a meeting where we can discuss everything that is important to them. This discussion includes lifestyle choices, how many bedrooms, bathrooms, size of the home, yard size, schools, dining, shopping, commute routes, home styles, and neighborhoods. Since most first time buyers are shopping at lower price points we will also discuss their tolerance to making repairs and or upgrades.
One of the last things we discuss at the initial meeting is the current market conditions. First time buyers need to understand that homes in the lower price ranges are selling very fast, often with multiple offers. The old adage about wanting to “sleep on it” may be just enough time for someone else to sneak in and buy the house. I have had many couples call me back after sleeping on it only to find that the home they desire is no longer available.
Part of the education process is understanding the steps that are involved. I call it the “Buyers Roadmap”.
1. Obtain pre-approval letter from a lender. Many first time buyers want to start the process by looking at homes, which is understandable, but doesn’t work very well. The pre-approval accomplishes three things: A. they will know exactly how much they can or want to spend and there won’t a big disappointment finding out that a house they love is simply too much money. B. With the rates at historic lows, they may be able to afford more home than they thought which opens up more options. C. When they find the perfect house, they will be ready to make an offer and they won’t risk losing the home while waiting for a pre-approval. Sellers will not accept an offer without proof that the buyer has been pre-approved.
2. Locate the perfect house.
3. Make an offer after researching the current market conditions.
Once the offer is accepted:
4. Place deposit into an escrow. Escrow companies are neutral third parties who make sure that all parties’ needs are met. That includes the sellers, buyers, lenders, County recorder and agents.
5. Submit purchase contract to lender.
6. Order all inspections. Most realtors’ recommend 2-3 inspections. They are the home inspection, termite inspection and roof inspection. Many other inspections are available depending on the home and the exact situation.
7. Review inspection results- the buyer can accept the home as is, ask for concessions, or cancel the contract if serious issues are discovered.
8. Review and sign all sellers’ disclosure.
Lastly, the file move s to closing.
9. Bring the balance of the down payment to escrow. This must be in certified funds.
10. Sign all loan and escrow documents
11. Within a few days, your lender funds the loan
12. The escrow company records the transaction with the County
13. Receive the keys to your new home.
Sounds pretty simple, right? The answer is yes if you have hired a competent realtor. The right realtor will handle all the loose ends, order all the inspections, explain all the details and keep you informed every step of the way. The right realtor will make sure that you are knowledgeable about your rights and will look out for your interests at all times. On the other hand, the wrong realtor will make the journey more difficult than it needs to be and much more stressful as well.
The Realty World corporate tag line reads” The right Realtor makes all the difference”. That is never more true than when assisting first time buyers.