Where are you in the home buying process? Are you a buyer or a waiter?
A buyer hires a buyer’s agent to represent them. They get pre-approved. They view homes, look at disclosures, and write offers. On the “yes-no-maybe” spectrum, a buyer is a YES.
A waiter sometimes look at open houses. They say they’ll get their mortgage sorted out when they find a home they like. They think that every house, condo, or townhouse “isn’t worth it”. Maybe sometime in the next 2 years they’ll see something they like, there’s no rush! They are “happy enough” where they are and will volunteer that “we don’t have to move”. On the “yes-no-maybe” spectrum, waiters are a MAYBE. And maybe usually means no – not right now.
In this Silicon Valley market, to be successful in home buying requires a strong YES. It demands a commitment and an understanding that no home is perfect (if you hit 85% or 90% of your wish list and it’s in budget, that’s a win!). A lukewarm “maybe” translates into a no, because the pace is so slow and unmotivated that they just won’t be able to pull the trigger in time. The best homes sell fast and may not be around by the time your lender has a solid approval in hand.
Although the market is much cooler than a year ago, homes continue to sell for more than 100% on average, typically with multiple offers and few (if any) contingencies. Buyers submit their offers with proof of funds (bank statements), ALL disclosures signed off, often with a contractual obligation to put the 3% initial deposit in escrow the next business day after the offer is accepted. They may pay for a rush on the appraisal because they are moving fast for a quick close of escrow. Serious buyers know that if they don’t do these things, more serious buyers will, and they’ll lose out. Serious home buyers may throw in a free rent back for the seller after close of escrow.
In other words, they are “all in”.
Many buyers, even serious ones, end up writing 2 or 3 offers before they have invested enough in their offer package to get it accepted. For those who are casually looking on, it’s harder than it looks, and it takes more buyer sacrifices than may seem reasonable to the waiter – or to the buyer’s family and friends.
Special buyer / waiter situations
Sometimes I’ve worked with couples in which one of them is a yes and the other is a maybe. Can you imagine how that works out? Not well! Both home buyers need to be on the same page.
That is also true if mom and dad are helping out a grown offspring and will be part of the decision making process. Everyone needs to be equally sure that buying is what they want to do, otherwise there’s added stress and tension on what is already a stressful experience.
Finally, it’s not bad to be a waiter or a “maybe”. If that’s where you are, then go ahead and dabble with open houses to keep an eye on the market and see what it is you do and don’t like in homes. Before seeing a few, you may not have had an opinion on an island kitchen versus a galley kitchen, or one facing the side yard as opposed to the front or back yard. That period is a good time to check your credit and see if anything needs correcting or fixing before you are serious about house hunting, too.
When you are ready to transition from waiter to buyer, it is good to jot a list of questions and concerns down so that when you interview buyer agents you’ll be ready. It is in your best interest to hire someone to help represent your interest as a buyer’s agent, and not to just work with the listing agent you meet at an open house (and end up with dual agency).
Why be pre-approved for a loan? (on the popehandy.com website)