There are many tips and tricks when purchasing a home, but I want to start with a broad overview – AKA Buyer 101. Following this post, I’ll do a deeper dive into many of these topics, but for any first time home buyer (or even return buyers) this is a great place to start or refresh.
A question that I am frequently asked: How early should you get started and connect with a Realtor? My advice is to start about 4 months before your lease end or before you’d like to move.
Step 1: The start of your process should always be reaching out to a good trusted Realtor. How to find one, might you ask? I’d recommend networking with family and friends to see who they would recommend. Then do your own due diligence and take a look at reviews online. Once you’ve selected one, make sure you ask important questions like: How long have you been in the industry? How many houses do you sell per year? Do you specialize in any areas? Are you part of a team? Etc.
Step 2: Connect with a LOCAL lender. If you don’t already have one in mind, your Realtor should be able to recommend a great lender. I want to emphasize that in the greater DC real estate market, it is paramount that you work with a local lender. This is going to make you more competitive once you do find your perfect home. From here, you’ll need to submit your documentation to get your preapproval letter ready to go.
Step 3: Determine budget and create wish list. Your next step is going to be first identifying your budget (this should occur while getting preapproved with your lender) and from there identifying what realistic items should be on your home wishlist. The big word here is “realistic.” Your purchasing triangle, as I like to call it, is going to be budget, type of home (single family, townhome, condo), and location. Generally speaking, your budget is going to be pretty set in stone, and as such most buyers will end up prioritizing either type of home or location. In many scenarios, a buyer will go a little further out from the beltway to get a bigger home, or will consider a small home to be closer to DC.
Step 4: Search for your home. There are a plethora of websites you can visit to start looking for homes. A good Realtor will also set you up with an email portal with automatic notifications of homes coming on the market that match your criteria. My recommendation is always to use a site directly tied to the multiple listing service, MLS, (this is the database that almost all Realtors use to input their listings). I recommend Redfin, Realtor.com, and Homesnap as great places to start. Sites like Zillow and Trulia are not directly tied to the MLS and as such much of the time are not as accurate.
Step 5: Go see houses. You have two options to do so – either attend an open house or schedule a private tour with your Realtor. My advice – always schedule a private tour as early as you can. There is a good chance the listing will be gone by the time the open house rolls around in this is a competitive market!
Step 6: Make an offer and contract ratification. Once you find a home you love, you’ll move forward with making an offer. I always pull comparable sales within the neighborhood to give my buyers a realistic view of what the data supports in terms of price point. There are many other pieces of an offer, besides the offer price (i.e. contingencies), that are key to winning in a competitive situation. If the seller selects your offer, this is called contract ratification, and when you are officially under contract.
Step 7: Due diligence period. Depending on the competitive nature of your offer, you may or may not have contingencies built in to execute during your due diligence period. I could write many paragraphs on each of these (watch for future posts) but for now, those contingencies most of the time are going to include, home inspection, appraisal, financing, and HOA or condo docs. With each of these contingencies, or safety nets, the buyer is able to void the offer without repercussion to their deposit.
Step 8: Walk through inspection. Following your due diligence period, it does get quiet for a little while. Either the night prior to settlement or the day of (there are sometimes exceptions to this), you will visit the property one final time with your agent to make sure home inspection repair items have been completed and that nothing has been damaged during the move out.
Step 9: Settlement. The final part (most of the time) is going to settlement and signing the proper documentation. After this, you will receive the keys and can officially call the home your own!
As I mentioned before, this is a general over. I will be following up from this post with a lot more information, but this should be a good overview to get any buyer started in the process!