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Getting from Zillow to The Keys of Your Dream Home | All Roads LTR Podcast | Ep. 35
24 Plays6 months ago
From the initial consultation to closing the deal, Matt shares invaluable tips and strategies to guide you through the process of purchasing a home with confidence. Discover how to decode your needs, set a budget, and streamline your search to find the perfect home. Learn the importance of collaboration with local lenders, negotiating offers, and navigating through inspections and appraisals. Whether you're a first-time buyer or seasoned homeowner, this episode offers a comprehensive roadmap to make your home buying experience seamless and rewarding.
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Transcript
Begin Home Buying: Initial Consultation
00:00:10
Speaker
the process of buying a home. Let's start there. So what is the process? So if you've never bought a home before, or even if you've only bought one home, it can be a little hazy, especially if it's been years. So the way I like to describe how to do it. So if you were to call me today and say, Matt, I'm thinking about buying a house, where do we begin? Don't even know.
00:00:31
Speaker
Most people have been looking online, their own Zillow, their own Redfin, they've been looking for weeks or months, years in some cases, and now they've decided, okay, I really wanna make something happen. So what I like to do and what I would advocate is we have a consultation first. So before I go and immediately show you the home that you saw, which is when everyone calls, I wanna see it one, two, three main streets, great, I wanna see it today at 12, come and open the door, let's start this.
00:00:58
Speaker
I'd say, well, let's back up a little bit. Let's first find out everything about your search. I want to help understand your needs, your wants, and then I can decipher from that what to do. And so we have to, first off, create a budget.
00:01:14
Speaker
Unfortunately, going back to reality and talking about finances, sometimes it's just not where most people want to go. I have to backtrack a little bit and help them understand that without the framework of your search, I'm not doing any favors. I can just run out there and open a door, but that's just doing as told. It's not really adding much value to your life or to your experience.
00:01:37
Speaker
The way I like to start is let's do our console.
Meet Your Lender and Financial Planning
00:01:40
Speaker
Thank God for Zoom and all these other wonderful technologies we have, but we can just Zoom for a half hour, understand what you need. I want to then introduce you to a great local lender, and we're going to get to that question next. But I'm going to introduce you to a lender that's local that I know is amazing. Not an average, but an amazing lender.
00:01:59
Speaker
and I want you to do your application, and then after the application is done, I get notified from my lender.
Home Search Setup and Criteria
00:02:07
Speaker
The lender and I have a conversation for a good while. I understand all your options, your ceiling, where you said you felt comfortable, and then what the payment has to be, the down payment, and because when it comes time when we find the one, that's not the time for me to figure all that out. I need to know it in advance, because I want to get you the home that you want, ultimately, and that takes planning.
00:02:29
Speaker
So after that connection with the lender, we jump back on a Zoom call for 15 minutes. I typically share my screen and I open the MLS with my client and we go through and I layer all the search criteria you have, whether it's schools, distance from work,
00:02:47
Speaker
Whatever is important to you, we layer that in there and we save a dynamic search that can show you coming soon
Touring Homes: The Fun Part
00:02:55
Speaker
listings, which a lot of the big portals can't show you. And so, you know, in advance of most of the public. And so we have that set up. And then when homes hit, you're notified within five minutes of them hitting the market officially as active.
00:03:09
Speaker
And that way we are the first to be in the door and we've basically eliminated all the noise of the search because it's very overwhelming for a lot of people without those safety nets and the guardrails of a proper search. You don't know where to even start. And there's too many choices.
00:03:25
Speaker
So by the time we're done, we've narrowed it down really well. And then after all of that is done, your favorite homes in the portal, I'll contact you on a regular basis checking in if we can't find something. And then eventually you find things you want to tour. We set
Crafting the Perfect Offer
00:03:40
Speaker
up a tour. My administrative team would assist with that typically to make sure on all our calendars match up and we're going out the door.
00:03:46
Speaker
And so that's the fun part. Everyone wants to shop. Who doesn't love shopping? So then we go shopping. And then when you find the right home, at that point, we're going to then identify the best strategy to acquire it. And if it's been on the market for a while, we can be really good negotiators and go for the lowest price, best terms for you.
00:04:08
Speaker
And if it's brand new and it looks like a Pottery Barn commercial, it's all about how do we get the home without paying a dollar more than we need to. And if it's, I make clients oftentimes rate the home. So if it's a 10 out of 10 home, I've never seen anything like it and you love it, love it, love it. That's different, right? We're going to definitely have a different strategy for that, where if you mess this up, Matt, and we don't get this house, I'll be upset.
00:04:31
Speaker
Versus it's a seven, seven out of 10. We like it. We live there, but I'm not passionate about it. That's very different. We're not going to go crazy, right? We're going to try to make our offer reflective of that.
00:04:44
Speaker
And that's the strategy. And I work with the lender and we discuss all the different options we have and we layer our strategies together. I call the other agent and we have a discussion about the competition and what the seller's looking for. And we eventually put together an offer and we submit it. And then you review it with me, we sign it and send it over.
Navigating Inspections and Contingencies
00:05:04
Speaker
And a question I should elaborate further is that an offer
00:05:08
Speaker
isn't just an email. Some people think, oh, Matt, we're going to offer X and these are our terms. Write it up. It's not that simple. Like the offer, at least in the state of Maryland, you'd have to write the entire contract. And once we fill out that contract in its entirety, I send it to you, you review it and have to sign the entire thing. And we send it along to the seller and if they agree, they can sign it the way it is and it's official to contract.
00:05:34
Speaker
or they can counter and then we're negotiating. That's the way that works. That's that initial process and then I'm going to just keep elaborating. After that happens, what we're going to do is it's going to go under contract and then you have contingencies in play. Depending on how the offer is structured, if we have inspections, you have a certain number of days for inspections.
00:05:56
Speaker
Typical is five to seven days. And during that time, I would be able to give you all the recommendations of local inspection companies. We'd schedule them. I show up during that period with you. Hopefully at least one buyer will be there personally, because they go over a lot more than just what's wrong with the home. They go over, this is where your cleanouts are. This is how you change your filter. This is how you turn off the water. They teach you how to live in the home. So it's super important to be there for that.
00:06:25
Speaker
And and so we get to the inspection process. We negotiate repairs if necessary, which is a whole journey in and of itself. You know, there's a lot of back and forth sometimes. But, you know, we go through that process and understanding what things cost and what's it normal, what's normal wear and tear, what you should ask for, what you can ask for. It's invaluable information to understand during the process.
00:06:48
Speaker
And what happens, I had actually one question when I went through my home buying experience. What happens is if you're under contract, you do the inspection, and then you say, you know what, I need $20,000, for example, to repair something, and the current owner says, no, it's just 10.
00:07:10
Speaker
So you say, OK, there's no deal. Like, what's what's the financial implications of that, of getting out of it and saying, OK, there's no deal? It's an interesting question. So thank you. So what changed in October of 2022 in the state of Maryland, at least, is that now we don't have to give a reason if we have a home sale, I'm sorry, if we have a home inspection contingency to back out of a contract.
00:07:34
Speaker
And so now we have the right as a buyer to back out unilaterally and get our deposit back if we choose to during the inspection period. So if during that period we go, oh my goodness, look at all these things, we want X amount of dollars, 20 grand. The seller can choose to do it, in which case we're obligated to continue through the process.
00:07:53
Speaker
If they say, if they negotiate, even by a dollar, they have officially countered us. And as a buyer, we can walk away and get our deposit back. Oh, so the only so that's as a seller, you have to make your decision, you know, is negotiating for one hundred dollars or five hundred dollars worth it to give the buyer the opportunity to back out.
00:08:13
Speaker
OK. And so it has to be worth it. So if you if you're ten thousand apart, for most people, that's probably worth countering as a seller. And so the only thing financially you'll be out as a buyer at that point is the cost of your home inspection.
00:08:28
Speaker
And inspections, I mean, depending on the property community, we're from 500 to $1,500, you know? Okay. And what do you should, is there something specific you should look in an inspection company or who provides, because you helped us with that, but if somebody wants to search it for themselves? Yeah, so buyers always have the right to choose whoever they want with any service provider.
00:08:51
Speaker
I always give it three recommendations. I don't like to just give one. So I've narrowed it down to the companies I've used dozens, if not hundreds of times. And it's important because you want a home inspection company to be very detailed, to not miss anything. I don't like representative sample companies. Those are the companies that test one outlet per room and think they're doing something.
00:09:15
Speaker
Honestly, that's all they have to do is a representative sample one window in a room and that's a sample. That's not helpful. And I do that selfishly because I don't need my clients moving in two weeks later saying, Matt, you know, three of the windows in my living room don't open.
00:09:30
Speaker
And so the experience, I want it to be positive because my job ultimately isn't to sell a home, it's to get referred. I want to be good enough for you to mention my name again. And so my goal has to be much higher than just getting you into this singular home.
00:09:45
Speaker
And so those are the reasons. So I have to choose a company that I have a track record with. They're not alarmist because, believe it or not, some inspection companies, the inspector goes out there and they think they're God. You know, they're just they are super off the wall like, oh, my God, look at this leak. The house is going to fall over. And I've had experiences where it's terrifying to buyers. Do they have an incentive to do that?
00:10:08
Speaker
It's just their personality. Most of the time they mean well. Their client isn't me. Their client is the buyer. And so sometimes they think they're doing what's right for the client when in reality they're almost blowing up the process by terrifying people. And it does happen. And so there is a difference between giving all the information about the condition of the home and making people terrified.
00:10:35
Speaker
And so one of the reasons I always like to attend or an agent should attend is because we should have enough experience to not just know what they're saying to us, but translate it. So if waterproofing needs to happen, the home inspector is not going to tell you it's going to cost two grand or five grand. They can't do that. That's just not something that they can do. That's my job.
00:10:55
Speaker
And I could tell you I have two or three waterproofing contractors I use all the time. This is typically what this cost. If this concerns you, this is a big concern, I'm gonna have them here tomorrow. And we can get an estimate before we make a decision or we reply to this inspection. That way you're educated, let's not freak out, let's figure out what it is. Because some people freak out and they realize, oh my god, it's a $500 fix, I love the house. And so there's a difference. So, you know, that,
00:11:23
Speaker
That's kind of what the purpose of the inspection how I helped to choose them you need to balance between Being well informed and not being terrified. Yeah, maybe they do it to do to just be on the Safe side know that oh if something goes wrong with this it was I told you so no. Yeah, but just exaggerating
Understanding Appraisals
00:11:42
Speaker
maybe
00:11:42
Speaker
Possibly, but a lot of agents get frustrated with inspectors. But you also don't want an inspector that isn't going to bring things out that are just kind of like, yeah, the house is great. You're perfect. I don't want that either because I do not want a client of mine buying a home that they shouldn't for the same reason I just mentioned. My goal is that you're happy in the home. And an inspection is just it's a day in time. It's a couple hours in a home. So it doesn't mean that in a month the roof can't leak.
00:12:10
Speaker
You're like, it gets very possible. So it's just a snapshot in time. They can't see through walls. So an inspection isn't a guarantee of the home's condition. It's just it's a snapshot in time. It's like going for a physical doesn't mean next year not going to be an issue. So so that's that's the inspection process.
00:12:31
Speaker
And I guess I'll just continue right through. So after we get through that, I think that's when we order the appraisal. So if you're getting financing, you're going to have to order an appraisal next with through the lender. The lender does it. You'll pay for it as a buyer through the lender, and then the home has to appraise. And so at that point, that's the next hurdle. And if the appraisal doesn't go back where we need it, that's going to be another negotiating point.
00:12:55
Speaker
And so you have to buyer and seller have to agree to move forward. So if it underappraises, it's a negotiation. If it overappraises.
00:13:03
Speaker
That's not a bad thing necessarily, as long as it's within reason, because we would just simply respond to the other side. It appraised for at least what we needed it to. And we get to move forward. And I should clarify, if it appraises for dramatically above the contract price, sometimes lenders want to dig into it further because it could raise a red flag as to what's going on here.
Finalizing with Title Work and Closing
00:13:27
Speaker
But that typically doesn't happen.
00:13:30
Speaker
And so that's what we do with the appraisal. And then after we get through that, it's just title work. And title work simply is verifying that the seller has the right to sell you the property. Because the last thing you want to do is spend hundreds of thousands of dollars or more on a home that the seller didn't have the right to give you in the first place. So the title company's job is extremely important to protect
00:13:53
Speaker
the buyer, and they're the ones that facilitate the settlement at the end. They're the attorney or the title officer that's authorized to notarize all the paperwork after we conclude our final walkthrough the day of settlement, typically. And that's it, and you get the keys. And so that's the whole process in a nutshell. And there's a lot of variations. It's not Groundhog's Day. That's why I kind of love the job is because
00:14:21
Speaker
That's the general framework, but every situation can be different, good or bad. It's rarely identical for anybody. You could buy 10 homes in your lifetime and you could have 10 very different experiences. That's why I hesitate to tell people who manage to have a great experience the first time to say it's going to be like that forever, or if it's a horrible experience. It doesn't mean that's going to be horrible in the future. It's just the way life is.
00:14:49
Speaker
I hope that clarifies it and start to finish. On average, you're looking at about 30 days. From the day you get out of contract, roughly 30 days to get it closed on average. It can be a little shorter, 21 if you get financing. I closed a deal this past month in four days. Start to finish.
00:15:06
Speaker
That was cash but even getting the title work in four days shout out to lawyers Express title here in Towson That's tough, but they managed to get it done for us And so well, you know and it can be delayed. There's delayed financing or not just delayed financing, but there's delayed settlements that can occur you can do rent backs so people have the ability to stay in the home and rent from the new owner and
00:15:29
Speaker
So there's lots of variations. I don't want to breeze over it to too much, but that's why you need to have an agent to go through all your options in your situation.