Now that I’ve shared a blog post about what to consider when buying a house, from things like square footage, location, if it’s your forever house or not, and more, I want to share this post about the whole buying process. We have been through it twice now, with houses in Livermore and Atascadero, but since I’m not expert, I brought in our Livermore realtor Katie Moe and Bay Area mortgage broker Andy Spellman. They helped us with our first house and will be helping us with the next one too! (Side note, I’ve actually known them both for years. I met Katie when I was doing daycare at my local gym and she would bring her little girls in (11 years ago now) and I met Andy when he started dating one of my bff’s Alana (and now they are married!). I LOVE when I get to work with people I know and support them in their business. They are both super professional, but also so nice and down to earth. They aren’t cheesy or salesy, they really care about informing you throughout the process and being your friend along the way. I highly suggest checking them out if you’re a Bay Area local and starting the home buying process!
Katie’s thoughts & tips from a realtors perspective:
Contact Katie: katie@arriveregroup.com // website // 925-216-9083 //
So, 2020 is here and you put “buy my first home” on your Insta Story for one of your goals this year. Congratulations! Now what!!??!! Where do you go from here?! Download a real estate app? Start going to Open Houses on Sundays? How do I get a loan? How do I….
How can something be so overwhelming, stressful and super exciting at the same time? Buying your first property is one of the most important decisions you will make, on your own or with a partner. As a local Realtor I have been honored and humbled to walk many a first time buyer through this process. And I have to say that it has become *quite possibly* the best part of my job. Handing over keys to first time homeowners, is everything you think it would be. And my goal is to share some information, questions and a little advice that I have learned over the years of working with this incredible group of buyers.
Talk to a mortgage broker. No, like NOW. Stop what you are doing. Do not pass go, do not collect $200. As you prepare for this, a mortgage professional will help guide you with the many (many) different loan options. Start with how much you want to afford each month. Stop and read that again. What is your monthly budget? How much of a mortgage are you willing to add to that budget to still enjoy the life you have and/or want to have? Start there and then once you have discussions with a mortgage professional, let them inform you on the different loan options that can work with your goals. In the Bay Area, you can not write an offer on a house until you have a letter from a lender...so this really is the first step.
Think of this house as a stepping stone. You are purchasing a home to live in, yes. But this first purchase is the one that will help you make your next purchase. So, be intentional about what you buy. You have to think as a buyer AND a seller. What will attract buyers to this house when you get to sell it in 8-12 years? Consider the upside potential of your purchase, is there room for improvement that will increase your equity in the home? Are you willing to commit to making those improvements over time? Yes, this is your home...but it is a long term investment as well.
Be willing to stretch...a little. This is a tough one because you have to be comfortable with your budget. You have to factor the monthly mortgage, homeowners insurance, property taxes and cost of caring for a home IN ADDITION to just living your life. But, I have had countless experienced homebuyers tell me that they are so glad that they stretched a little on their first purchase, as it pays off in the long run. And referring back to #1...be in constant communication about the impact on monthly payment of an increase in purchase price. You would be surprised how far $200/month can go on a mortgage versus another line item in your monthly budget.
Research, research, research!! This is a pretty big topic as you are not only buying a place to sleep at night. You are buying where you take your morning walk, where you invite your friends over for an ugly holiday sweater party, where you grill in the backyard, where you might have a home office or start a family. I feel so fortunate to be able to work where I live. I am so proud of the communities that surround our home, it is part of why my husband and I chose to live here. Our “home” is so much more than our address. If there is something that is really important do how you live your life take the time to do the research to make sure that home or neighborhood satisfies that for you. If you take Bart to work and want to walk to the station...practice that walking/bus route to make sure it works for you. If you like to do sunset yoga, ask your agent to see the house at sunset hour to make sure it works for you. This is YOUR HOME...never be afraid to do your research and make sure that the community and surroundings fit your life.
Find the right agent for you. This one goes without saying. Obviously, I am biased on the role an agent plays in this transaction. But I think it is critical on every level. There are many agents out there...truly someone for everyone. So, find the one that fits you. Meet agents who have passion for helping people and solving problems. The most happy and successful agents are the ones who truly care and build relationships with their clients. They are leading you through this process that is crazy at times, but the right agent will shoulder the stress and always have your best interest at heart. You should never question that, ever. So, talk to friends you trust, get some names and meet people. Find the one that works for you!
In all honesty, there are at least 10 more things I could address in a conversation with first time home buyers who are just starting a search...but I think I have exceeded the word count for this blog. With regards to all of the above items, it comes down to two things (from my perspective)...building a great team. Who is your team? Well, it’s us. Your Realtor and your mortgage professional. We are the co-pilots on this journey, you are taking. It is my job to protect you and inform you at every step of the process, from finding the home, developing a strategic offer, negotiating where needed to eventually signing title papers!. And I work hand-in-hand with your mortgage professional to ensure that they have what they need to make sure that loan funds when it is supposed to. Together we will lead you through all of it...and when you receive the keys we will be there.
Andy’s thoughts & tips from a mortgage brokers perspective:
Contact Andy: aspellman@lasallemortgage.com // website // client reviews //
Don’t be afraid to go through the pre-approval process and ask questions! A mortgage professional is here to help you!
Even if you think you’re not quite ready to buy, a mortgage loan agent can advise you on how to be in the best position possible when the time comes. Whether by saving for a down payment or improving credit.
Not all mortgage advisors/banks are the same. Whether it is communication or a specialty loan product, do your research to make sure you are getting the loan that is right for you.
The Bay Area is a competitive real estate market! Be sure that your mortgage bank can act quickly and offer short close of escrow periods to give you a leg up on the competition (Note: this requires that you consult with a mortgage loan agent before you start submitting offers on homes)
There are a lot of niche pockets of neighborhoods that only a local appraiser would know the precise home value. Make sure your mortgage bank uses local appraisers! A bank that hires appraisers from out of the area could jeopardize your deal.
Communication is key. Not only should your mortgage loan agent be extremely responsive, but you should also hold yourself to a high standard of fulfilling requests promptly (especially if you are in contract on a home)
There are two types of refinances. First, a “cash out” refinance is where you tap into your home’s equity by increasing your current loan amount. Proceeds are often used for home improvements, debt consolidation, or paying for college. Second is a “rate and term” refinance, where you are simply improving the terms of your current loan (ie. Improving your rate or switching the length of the mortgage, 30 years to 15 years).
