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Our Top Ten Tips for Homebuyers

DSC_0185To kick off my new partnership with Mission Federal Credit Union after being named an official Realtor partner for the credit union, I am preparing a new handout for the buyers I will meet through Mission Fed.

It will be a tri-fold, four color small handout, and my first day to hand them out will be July 1, 2015, in the Napa Street branch near the Starbucks at 5375 Napa Street, San Diego, CA 92110. This is technically called their “Linda Vista” branch, but it is fairly close to SeaWorld Drive and the I-5 (times I will be in the branch are to be determined and I will update this post).

Our partnership is formed to get Mission Fed pre-approved buyers into houses in an easier way. Right now, Mission Fed members, when getting “pre-approved” for a mortgage, are actually fully underwritten and APPROVED for a mortgage by Mission Fed. There is a tremendous difference between pre-approved and being fully approved. Fully approved is golden, but sometimes buyers don’t get to the house-buying step because they get sidetracked. Approved is this: insert an address into the process and buy a house. The buyer is already approved. Your hard work is done – go shopping. And Mission Fed has great loan products, like 3% down for  a 30-year fixed rate mortgage. Wow.

Here’s where I come in — inserting the address into the process and keeping the buyer excited and engaged. Shopping for a home is multi-layered and often emotional, sometimes frustrating. My goal as the Mission Federal Realtor partner is to close sales with Mission Fed buyers using Mission Fed loan products for all their purchases. And within the purchase process, I want to make sure the buyer feels that something oddly wonderful happened: it was so easy. Easier than they’ve ever heard buying a house could be. Easy and successful. It’s going to be great for buyers.

Here, my top ten tips for homebuyers. This list changes constantly and is fresh as of June 2015. Questions, comments, and more details about my Mission Fed partnership can be answered by calling me at (858) 291-8110 or emailing Kimberly@blendrealestate.com. It’s easy to become a member. Just visit the Mission Federal website. The rest of my business stays exactly the same, by the way.

Top Ten Tips for Home Buyers

  1. Manage your credit very wisely: Not only during the “select a home” phase, but really throughout the escrow process which for us is 30 days. You’re gleeful and I see it all the time: glee takes over and you go out and charge $5,000 in new furniture, anticipating its delivery at closing. That extra debt does not help you. It hurts you. No shopping, no new cars, no furniture, no credit spending period, except for what’s normal for you. That glee cost my client a house: in the last week of escrow, she bought a beautiful white $60,000 Cadillac Escalade and the lender continues to check credit throughout our 30-day escrow. The new car loan popped up, her car payment was over $800 a month as I recall, and the deal was killed. You can’t return the car and the transaction was over. For all of us.
  2. Be organized and get pre-approved for a mortgage: Your pre-approval from Mission Federal is really a gift that you’ve earned. I will need your pre-approval letter in my hands before we begin to shop for a home. Why? Because only then do I know you’re serious. You can’t write an offer without one in our part of the country anyway, so you and I need to know what it says: the total purchase price you’ll be allowed to spend, and then privately you and I will discuss the amount of your down payment.
  3. Eat breakfast or lunch: Shopping for a house is a power outing. Come prepared for work and a lot of moving around. Eat before we meet unless we’re eating out together. I will always have cold water for us.
  4.  There no such thing as timing the market: There is no bad time to buy a house. It’s not a stock purchase and even those can’t be timed. You will not be timing the market. You won’t be thinking about “the market” because overall it doesn’t affect you. The house you buy affects you — and your interest rate affects you. The price you pay for the house will be the best price for you and the seller at any given moment in time. That’s how it works. You can buy a house on Christmas Day or at the height of “the buying season,” whatever that is, and it always works the same way. There is no art to the “timing” of your purchase.
  5. Prepare for surprise costs: the first biggest is potential HOA dues. Even for detached homes. We will have to factor those into your overall approved house payment. And the other sleeper surprise cost is when you absorb leases tied to a property. I say we avoid any house that has a lease for equipment tied to it: most often for solar equipment. We can go forward if the seller agrees to pay off the lease in full for you at closing and you inherit the item or items free and clear. Otherwise, to me it’s a no-go. For you.
  6. Plan on spending some money before you close escrow: You will need a few hundred dollars for a good home inspection. And often you’ll pay for your home appraisal “up front” with a credit card. This +/- $400 charge is during the first week of your escrow and escrow gets the credit card number directly from you. Previous to the recession, you could pay for the appraisal like all of your other closing costs — at closing. (That’s in last week of your deal.) Now it’s paid upfront, so in case you cancel, the appraiser still gets paid. If you cancel after paying for your appraisal and after paying for your home inspection, those costs are not refunded to you. Rarely do my clients cancel for any reason. We pick a house that will work. I help you with all these steps and you will choose correctly.
  7. Drive by the house at night: Should you find the right property, let’s make sure you park on the street for a while at night or even in the early morning. By yourself; hang around a bit. See the neighborhood at different times of the day to make sure what you see works for you.
  8. Bidding on a house: Don’t low ball it! You want to pay the least amount possible, I get that. A really low offer is the fastest way to be ignored by a seller and pretty much put you out of the running for a house you like. You know the saying, “you get one chance to make a first impression?” This is as true when bidding on a house as it is at any other time. Let’s write a very strong opening offer, and my letter about you that accompanies the offer will get us into the door and probably very likely get the house for you. Even if you’re countered on price, we still started strong and you are likely to win it. Don’t write a weak offer.
  9. Your friends and family kill deals: Why does this happen? I am not sure, but the moment you bring others into your decision, they will sway you away from what you thought you loved. So consider making the purchase decision on your own, in partnership with anyone whose name is on the contract with you. That is it. No one else decides. Everyone else can be invited to see your house after you’re under contract. Don’t go off the path of success to home ownership by inviting in every opinion under the sun before you decide. Even friends and family. They’ll love your house once you own it — they’ll be proud and happy for you. But if you ask them to help you decide before you decide, they’ll often tell you not to buy the house. I see it all the time. Yet the same people, if invited later, always love the house. Human nature, I guess.
  10. Have cash ready to go. Upon writing an offer and getting it accepted, I will need you to write your opening deposit check to our escrow company; often called a “good faith” check. It’s what opens escrow and it’s your money. It applies towards your closing costs and/or down payment at the end. The amount is determined when we write the offer and it’s typically 1% of the sales price — but to write a STRONG offer, consider 2%. That can be $10,000 on a $500,000 San Diego house. So let’s shop for your house when you’re ready, because if you can’t write an opening deposit check, you shouldn’t be writing an offer.

 

That’s all for now. Stay tuned for more news about my wonderful partnership Mission Federal. I am so excited. -Kimberly (and a Mission Fed client since 1987)

Today’s photo: copyright Kimberly Dotseth, 2015. One of my University City listings. This is a great time to observe a property you want to buy — at twilight and even later at night! What’s going on in the neighborhood? Is it quiet enough for you?

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