Whether you are a first-time buyer or a grizzled veteran, there are about a million things you need to know in order to buy your new home without freaking out, having a nervous breakdown, or, worst of all, strangling that nice agent who works WAY harder than you think he does. However, in the interest of brevity, I've decided to talk about 5 of those things, in no particular order, and with no particular scale of significance. This will be an ongoing project with weekly, or monthly...possibly bi-annual updates. You may already know a lot of this, but don't laugh. A lot of the kids in class don't know this stuff, and it's not nice to make fun of them...out loud, at least. So, even if you think you know everything, take a few minutes and read this anyway...you might learn something. At the very least you'll spend the next 10 minutes in a happy place that distracts you from the mundane horrors of your desk-job, nagging wife, screaming kids, etc. So sit back, relax....and let's begin. Oh, by the way, I'm going to pose each of these in the form of a question that I've actually been asked be real-live people.
#1. How much does it cost to have a Buyer's Agent represent me?
This is my favorite question of all time, with the possible exception of, "If I pay in cash, can we close today?" It is my favorite because the answer is zero. It costs you nothing, as a buyer, to have an agent represent you . The owner (Seller) pays for the real estate fees, usually around 5-6% of the sale-price, split between their agent ("Listing Agent") and your agent ("Selling Agent", or Buyer's Agent). So, even though your agent works only for you, the expense is included in the price of the home, and therefore covered by the Seller.
#2 How long does the process of buying a new home actually take?
This varies, but the average is between 30-45 days after a home is chosen and an offer is presented and agreed upon by both parties, commonly referred to as "Mutual Acceptance". The time spent prior to that can vary wildly, depending on market conditions, scheduling, and the number of homes that need to be looked at before a decision is made. There are a lot of things that need to happen for a home sale to close. For instance, you'll need an inspection and it's attendant negotiations, an appraisal, credit and income verification for your financing, document drafting, and appointments to sign the roughly 10,000 pages of loan and escrow papers required to close the sale. This involves several people, appointments and potential delays. Although transactions can be closed in less time, 30 days is the industry standard largely because it provides a comfortable cushion of time in case there are unexpected hang-ups along the way.
#3 What are closing costs and how much are they?
Closing costs are fees associated with the purchase of a home that are in-addition-to the "sticker price". Just like buying a car, there are extra fees that need to be paid out-of-pocket before you can actually move in to your new dream home. These fees range from little tiny things like document drafting fees of around $100, appraisal fees of a few hundred, escrow fees of anywhere from $600-1000, and then the big one, which comes from your lender in the form of up-front loan payments. All-in you're looking at a ballpark figure of 2-3% of the purchase price. Don't worry though, it is entirely common to roll all of these fees into the purchase price so you can save your cash for your down-payment.
#4 Have we seen the bottom, and when will the market start to rebound?
It's funny you should ask...Stephen Hawking, Bill Gates, Dr. Strangelove and I were just talking about this over a few pints of Guinness last weekend. After a lively discussion of the theoretical impacts of economic fundamentals, historical relativism and revised Quantum Theory, we decided to just grab a calendar and throw darts at it...which seemed to be as reliable an indicator as anything else. The truth is that nobody really knows for sure. As we've all heard ad-nauseum from our diligent media, prices have fallen throughout the Country, and the Pacific Northwest is no exception. That being said, it is also true that the market has gained momentum throughout the region in areas like Bellingham and Seattle. Many homes, especially those in the first-time home-buyer ranges (up to $325k in Bellingham, $450k in Seattle) are moving very quickly these days, some receiving multiple offers, much as they did during the boom years. No one really knows what's going to happen, but it certainly appears that things are beginning to turn around, at least in our area. My guess is that prices will stabilize over the next several months. We may even start to see the return of appreciation in the next couple of years.
#5 Who is the most qualified Buyer's Agent in the Bellingham area?
I get this question quite often, though it is usually meant to be rhetorical. I don't mean to tip my own hat here, but the word on the street is that Yours Truly is something of an authority on all things related to Bellingham real estate. Modest though I may be, I have no choice but to graciously accept the accolades of my many satisfied clients. After all, who am I to question the adulation of the masses? While it is certainly true that I have put the time into becoming an expert in my field, I would hate to let the gushing commendations of my substantial Bellingham fan-base overshadow some of my other accomplishments. For instance, I am also quite well versed on the markets in and around Seattle and Portland. That being said, I must, out of modesty, digress. Who am I to proclaim myself king? All I can do is pass along the kind words of others....which, incidentally, can be found on my bio page!
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