Buying a home can be an ordeal for individuals and families. Getting a mortgage seems to be the easiest part. Submitting a winning offer? Not really a walk in the park. Buying a home today is about more than just looking at the listings that look good and suggesting the one you like the most. The new normal view looks like this:
- View many houses. Many.
- Make feature trade-offs
- Redesign your budget
- Buy at low prices to offer high
- Submit a lot of suggestions
- Maintain the mood as offers are declined
We wanted to know what it would be like to buy a house in Denver, so we spoke to Stuart Sims and Caitlin Van Hest, the couple who just did it. Stewart is a Business Intelligence Analyst at The Motley Fool and Caitlin is a Data Analyst at Zillow.
Here is their experience.
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They made smart purchases for their mortgage (ahead of time)
With past experiences remembered for the wrong reasons, Stewart and Caitlin went out of their way to find a lender who could provide them with the best loan. and best service.
They researched lender reviews, interest rates and closing times. “In the case of the larger lender, we didn’t know who would handle our loan and how responsive they would be,” says Caitlin. They pre-qualified mortgages with five different lenders and decided to proceed Credit Union Elevations… They got their preliminary approval of a loan before they started looking around the houses.
Based on their excellent credit history, they received mortgage interest rate 2.875%. They said their mortgage had low fees and no pitfalls. In addition, Stewart and Caitlin noted that Elevations maintains direct contact with the seller’s agent. This gave the couple more confidence in their ability to close the relationship quickly.
They set the necessary boundaries
Stewart and Caitlin knew how much could they spend on a housebut they also set a lower limit.
“We tried to buy $ 50,000 homes within our budget to make an even better deal, but the quality of the homes at that price was too low,” says Caitlin.
They also set a time limit. The couple started looking for a home on May 1 and decided that they would sign a new one-year lease for their rental home if they didn’t buy the house by August 1. This border helped them keep their sanity. If the house had not come to them during this period of time, they would have considered it a message from the Universe that now is not the right time and place to buy.
They compromised features
“We wanted a 2-car garage,” Stewart says. But they ended up with a house with a large yard, a one-car garage, and a barn that they could someday turn into a garage if they wanted to. They feel they got a lot of positive trade-offs for a two-car garage. The house is located near the city, it is within walking distance, from here it is easy to get to shops, banks and other services.
They made their offer convenient for sellers
Stewart and Caitlin made their proposals as attractive as possible:
- Several contingencies
- 30-day close
- Post-settlement agreement
- Covering many small real estate transaction fees (instead of cost sharing)
“We didn’t want to propose No contingencies, “Stewart says. They didn’t want the house to need a major renovation. But they set a healthy border on inspection. They told sellers that they would refrain from objection to any single inspection question, which is estimated to cost less than $ 2,500. • fix, or any combination of problems totaling less than US $ 10,000.
“We’re comfortable, but if the foundation is crumbling, forget about it,” Stewart says.
With the support of their lender, Stewart and Caitlin were able to offer to close the case within 30 days.
The agreement to hold office could have been the advantage that sealed the deal. This is a clause that states that the seller can rent the home back from the new owner within a specified period of time after closing. They closed on June 18 but won’t move until August 1. Meanwhile, Stewart and Caitlin visit family and friends.
Like many promising buyers, Stewart and Caitlin experienced many disappointments. Caitlin even considered the possibility that the purchase of the home had not been resolved. But they stayed focused and stayed in the game.
“We looked at 30 to 40 homes,” says Caitlin. “Six or eight every weekend and one or two during the week.”
She says it was an emotional roller coaster. They only had about 15 minutes to inspect each house, and by the end of that time “the realtor was almost always at the door, waiting for you to leave.”
They acted selectively, making only four written proposals and one oral proposal.
The competition was intense. “Nobody accepted the current offers,” Stewart says. This means that you must make each offer as if you were ready to buy a house (not depending on the outcome of another offer you made). You must include a deposit. If you submit multiple offers, you risk losing your deposit if the offer is accepted but you decline. So Stewart and Caitlin went through all the houses they saw every weekend and made one proposal every Monday or so until one of them was accepted.
You can definitely succeed in a home buying adventure, especially when mortgage rates are still very low. If this couple is our example, then the key is to prepare, educate yourself thoroughly, and have a strong strategy, but no expectations.