Thursday, June 11, 2015

How To Buy A House Part 2

Here is part 2 of the few blog posts I'm going to be writing about how to buy a house. In this post, I'll cover how to find a real estate agent, initial meetings with the agent, beginning the search, and how to write an offer on a house. It's important to note that the logistics of buying a house does vary from state to state, so there might be some differences outside of Oregon.

When I first began looking for a real estate agent, I was honestly a little overwhelmed by the amount of choices there were in the Portland Metro area. Since Dan and I are first time home owners, I wasn't sure exactly where to start. In general, it is definitely good to ask friends and family for recommendations, as well as doing your research on available reviews of each agent. I asked around and did some research and came up with 3 different options. The person we ended up going with was a recommendation from our mortgage adviser. When she gave us the agents card, she did mention that she wasn't compensated for handing out specific agents cards, but she truly thought that the agent did a fantastic job. I called the agent and set up an initial appointment to meet her at her office and discuss what we were looking for. Below are some of the questions I sent to her via e-mail. 
  • Are you able to show me houses listed with other companies, or only exclusively your own realtor group?
  • Are you a member of the National Association of Realtors?
  • How involved are you in the process? Will you be there for housing inspections, any mortgage meetings (if necessary), and at the closing?
  • Do you often get first time buyers as clients? Are you able to guide us in the process?
  • What is the best way to contact you? Do you check email regularly? 
Similar to getting a mortgage, I think it's super helpful to meet your real estate agent in person. Since you will be working closely with them as well, it's good to get to know them before you have the pressure of trying to get a bid in before someone else buys your dream house! Our real estate agent actually told us that she doesn't spend any money on advertising, since she gets plenty of business thru word-of-mouth alone. Interesting right? Anyways during our first meeting we discussed the basics of what we were looking for in a home.
  • Number of bedrooms
  • Number of bathrooms
  • Type of House (traditional, modern, etc)
  • Areas/school districts we were interesting in
  • Yard preferences (size, location, etc)
  • Garage
  • Commuting distance from work
  • General Neighborhood Feel

After we described what we wanted, she went to work to show us some of the houses she thought were good contenders. Some of them we already knew because of zillow which I found pretty funny. We then set a date to go out and look at houses! She checked in with all 6 houses before we went out that day to get the seller's approval for the date/time of when we were coming in. She was super organized and brought us to 6 houses, including one that Dan and I had emailed over to her and said we wanted to see. I was surprised how quickly we were able to move through the houses, especially the ones we weren't feeling. It definitely helped us decided what we need (a backyard for the dog!).
Isn't he cute? Anyways we didn't find anything we loved until we got to the 5th and second to last house, which was the one we had requested to see. We started walking the backyard and I thought it was so beautiful. There were huge porches overlooking the yard, with plenty of space to play fetch with a dog.

I started getting pretty excited, and then I walked into the house. Let's just say I was getting pretty obnoxious with home many times I said "I love it" and "It's perfect!". Dan thought I was a crazy person for getting so excited, but I just had a good feeling about it. The more I walked around, the more I knew that this was the house I wanted. And it happened that quickly! Which is why I tell people that you should start actually looking until you are ready to put an offer down, because you just might fall in love with a house like I did! 

Our little group went to one final home, which to be fair was very nice but not the same as the previous one. I know I had made my decision! After checking with Dan and making sure he was ok with it, I told the real estate agent that we wanted to go back to the office and make an offer on the house! She called the agent handling the house to make sure that it was indeed still on the market, then we got to work. She showed us a bunch of different houses that were similar in size and close by so we could have an understanding of how much we should put down into our offer. As I mentioned in the previous post, we had determined that we wanted to put at least 20% down so we could avoid Private Mortgage Insurance. We ended up going a little over the asking price (yes, some negotiators out there will shake their heads to that) but we both felt it was fairly priced. So we signed the papers, wrote a check for $10k for our in earnest payment, and left the office with our fingers crossed. The next night, we found out that our offer was accepted! We were really getting the house I'd fallen in love with! It was an amazing feeling.

Ironically, the house ended up appraising for the original offer that we put down, which goes to show that it's super beneficial to do your homework before writing an offer so you have a better estimate of how much the house is worth. Our real estate agent helped us with that, but if they don't immediately offer that, make sure you ask (or do your own research on Zillow). Another word of advice that I found useful is to remember that the agent is working for you, not the other way around. It's their job to put in YOUR offer, not the offer that they want. Always remember that so  you don't feel pressured into making an uncomfortable decision. 

I should also note though that we were REALLY fortunate that our first offer worked out. I've heard from other coworkers that it can take up to 6 months to get a house, so keep that in mind when you are beginning to work on your timelines. Also note that it usually takes between 30-45 days to close on a house (i.e. until you hand over your down payment and it's officially your house), so don't do it the month your lease expires!  

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