The Process of Buying a Home
The process involves a lot of moving parts and players that must communicate well with each other, and unfortunately, those who prey on ignorance. It is important for you to hire the right Tallahassee Real Estate Agents to help you sort it all out. Below are a few things you need to consider when buying a home.
1) Hire a Professional, Full-time Realtor.
Most of the time, realtors are paid by the sellers through the listing agent, which means most home buyers do not pay their agent to guide them through the process. It is hard to know which ones are the “good” realtors in the area, especially if you are new to Tallahassee. Each person’s needs and desires are different, so you should have a realtor who understands those needs and desires. Meeting with and choosing your professional realtor sooner rather than later is very important. The sooner a realtor can get involved in the home buying process, the sooner you will have an expert looking out for your interests! Your realtor should be a person who has experience and someone you feel you can trust. Their job is to help you maneuver through the process and help you make the best decisions in your specific circumstances.
There are many rules and regulations surrounding buying a home and they have gotten stricter since the housing crash. Knowing your rights can protect you through this process. No one can refuse to sell to you or work with you based on protected classes:
Lenders cannot hide fees and must disclose important information in a timely manner (https://www.consumerfinance.gov/know-before-you-owe/). There are down payment assistance programs available for those who qualify and Florida is a consumer friendly state. If you are wondering where to start, there is some great information available here at the Office of Housing (hud.gov links).
2) Figure out how much you can afford.
Most of what you can afford monthly will be dependent on your verifiable monthly income minus your debt, like car loans, credit cards, etc. A general rule of thumb is that you can afford around 2.5 times your yearly income. During this time, do not open any new accounts or close old ones without talking to a lender first. Do pay down the debt you can and keep an eye on your credit score. You want your credit score to be as high as possible because it will impact your interest rate and the amount you will pay to the lender through the life of the loan.
If a family member is going to ‘gift’ you a down payment there are hoops to jump through. Especially if the large deposit is seen by an underwriter, it must be ‘sourced.’ The lender may ask the ‘gifter’ to provide bank statements and some proof that the money is not a loan. Talk to your lender if this is where closing costs or down payment money is coming from and they will help you document what needs to be documented. If a friend is going to give you money, there are a lot more obstacles and ‘sourcing’ concerns. It can be a nightmare.
3) Shop for a mortgage. Talk to at least 2-3 LOCAL mortgage brokers before making a choice.
Some lenders cannot just drop rates or agree to lender credits just because you ask, but if you come back with documentation from another lender, they will generally try to match them. Buying a home is a huge financial investment. Talk to a couple lenders (not too many – it gets very confusing quickly) and make sure you choose an EXPERIENCED LOCAL lender. We have a couple areas with quirky requirements and there are some places that will not qualify for ‘typical’ loans because of federal lending requirements. If your lender is not aware of these (even if this is not what you are looking for) they may not be experienced enough to help you protect your investment. Check out our page here for more information about mortgages (Financing 101).
4) Shop for a home. Do not plan to shop for months and see dozens of homes. It leads to heartbreak.
When you meet with your realtor and develop your plan, you will establish your timeline and wants/needs for your new home. If done properly, you should not be searching for homes for months or seeing dozens of homes. This is a strong seller’s market and the buyer who sleeps on their decision may very well not sleep in the house at all. We feel that if we show you more than 8 homes, we have probably failed to uncover an important detail during our interview process. Studies have shown that the more homes you see, the more likely you are to be dissatisfied with your final decision. If you just like to tour homes, check out open houses or consider getting your real estate license. Much of the time the builder will pay our fee and working with us is free for the buyer.
If a fixer-upper is your dream, there are options for renovation mortgages, even for first time home buyers. Not all lenders have the option, and not all loan officers have the needed experience to get all the documentation settled successfully.
There are also loans for used mobile homes, and there are only a couple lenders in the Tallahassee area that have that option. Contact me and let me try to talk you out of this option before you go this route.
If you are looking to buy a lot and build, we can help you here too. Per acreage averages range from $175,000 to $5,000, depending on location and amenities. Lot prices vary more significantly than homes prices. We have decades of building experience and can help guide you through the process of choosing a builder and constructing your dream home and help you make sure things happen on time and on budget.
5) Make an offer – Negotiate the terms and conditions of your purchase.
One of the reasons it is important to know what mortgage you qualify for is because it becomes an important part of the negotiating process. Be prepared to send a lender letter stating you are qualified for the contract price (even if you are approved for more). The lender may have certain terms that must be met by the seller. It is important to negotiate these terms upfront and not be surprised by them after the contingency period. Experienced Tallahassee real estate agents know what lenders are looking for and can help you negotiate those terms.
Some agents scoff at having buyers write letters to the sellers. They feel it is a waste of time and they do not understand why sellers would want to see them or take them into consideration. Some agents will not accept them for Fair Housing reasons. Home buyers and sellers are often curious about each other. They will google the other party just to see what they find. We have had more than one listing agent, just in 2019, tell us that the letter from the home buyers positively influenced the sellers’ decision-making process. Maybe the Tallahassee real estate agents that scoff are not good at writing, but our experience has shown it is worth the time and effort.
6) Get inspections – Do NOT waive this contingency.
This is so important. Do not skimp here. Be prepared to walk away if you have a negative inspection. There is no guarantee that the inspector can catch every hidden defect, but big issues generally leave clues. Some inspectors have more expertise than others, and charge accordingly. For more information about inspections, check out our frequently asked questions page. If you decide to walk away during your contingency/inspection period, most contracts allow the buyer to receive their down payment back. Once the title agent has received the termination (signed by both parties), they will release the money immediately.
7) Choose homeowners insurance – Let your agent know your closing date and find out if they need an inspection of their own.
A homeowners policy covering the mortgage company is required at closing. Make sure that you are also covered in the event of a loss. If you work with an experienced agent, they will know which reports you will need and what questions you are going to be asked. Once you pick your policy, your realtor can make sure the insurance agent has all the information they need. There is nothing worse than the insurance inspectors report three months after you move in requiring you to replace the hot water heater or roof.
This is another item that can be shopped around to save you some money. Again, we caution that cheaper is not always better. Read over what is covered and not covered. If there are any outbuildings, decide if you want them covered from loss. If you have valuables, make sure the agent knows about them. Also, make sure that you are made complete after a loss – not just the mortgage company. These are all “Conversations” to have with your insurance agent.
8) Closing for the Home Buyer – O Happy Day!!
Although the home buyer does not always see or hear about it (unless there is an issue) there is a lot that happens between inspections and closing. Most are automatic and all are meant to get us to the closing table. The lender will have you pay for and order the appraisal (usually just after you negotiate a contract, depending on contract terms). When working with us, we will ask the lender to order (for contract compliance) but pause the appraisal until after we have inspections. If the timeline is short, and we may order the appraisal early with the buyer’s understanding that they may end up purchasing an inspection AND an appraisal on a house they will not own. That stinks so we try not to let that happen.
The survey is needed for title insurance purposes. It is something we order for you. You are welcome to order it yourself and choose your favorite surveyor or even shop the price around. Just let us know. We use the same guy because even when we shop the price around, he always has the best value. Sometimes the title company will accept an old survey for title insurance purposes. If the seller has it available and has not made any changes to fences or the property, it may save the buyer a couple hundred dollars.
Please remember to bring a photo identification with you to closing. There are several forms that need to be notarized and the closing agent will need it to verify you are who you say you are. Often, we will ask you to send us a picture of that identification when writing the contract. There are fewer problems when the photo identification matches what is on the contract. If it does not, there will be yet another form for you to sign at closing time, stating that you are who you say you are even when you are called by a nickname.
Please remember that all closing costs should be paid with a cashier’s check or money order. They will not take personal checks. You can also wire transfer your money, but please do so carefully. We have had more than one home buyer disappointed when they wired money to the wrong account and it was gone forever. Tallahassee real estate agents and closing agents are common targets for hackers. It is easy to hijack an email and send incorrect account information. The only way to know for sure is to call the title agent and ask her to verify the account numbers.
In Florida, if you are married and buying a home, the spouse will be required to sign something. Even if the spouse will not be on the deed, they sign a form stating they know that they are not going to be on the deed. If one spouse will not be available for closing, the other spouse can sign for him/her. The lender will have a power of attorney drafted that allows this to work. Check with your lender for their rules. Just because you have closed on your house does not mean we stop being available to you. We are always here to help anytime.
How WE Work With A Home Buyer
Involve us as early in the process as you feel comfortable. Buying (or selling) a home is a HUGE investment of time, energy, and emotion and the more we can talk with you and get to know you the better we will be able to help you when the pressure is on. Read through what we have posted here and get a feel for how we work and call us when you are ready.
We started this website because we have noticed more customers tell us that they are overwhelmed by the sheer amount of information out there today. Knowledge is power, but when you are NOT the one buying or selling a home daily, it can be tough to know what information is important or relevant to Tallahassee real estate. We want to be the agents your trust to guide you through your next move. We have been there ourselves and have tools to help.
We are low-key and not pushy. We see our job as helping your buy or sell your Tallahassee home, with the least amount of hassle, on your timeline, and meeting your priorities. We are full-time Tallahassee real estate agents and making customers happy is our primary focus. We will keep you updated anytime we hear anything involving your transaction and will keep files on a shared drive you can access for up to 5 years after closing.
We offer several checklists and put timelines on a shared calendar. We also have a list of professionals that we have used before and can trust to provide you with excellent customer service and communication. We know we are patient, helpful, and knowledgeable, but do not just take our word for it. We are also happy to share a list of local people who have worked with us in the past and would want to talk to you about their experience with us. There is also a lot of information on this site to guide you through the process of buying a home even if you choose to work with another Realtor.
When you are ready, contact us in the way you would like to be communicated with – whether it be calling, texting or IM through our social media accounts. This does not have to be the ONLY way we communicate with you, but it will be the FIRST way we communicate with you, and you can change it anytime. If we are working with someone, our phones will be on vibrate. So If you call, please leave us a message.
When you reach out, we will do two things:
- Setup a time to talk to all the people involved in the process (spouse, parent, child, sibling or other). We can do this in a phone or video call or in person – your choice.
- Collect contact information and some basic information about your goals.
In this scheduled conference, we are going to ask a bunch of questions and talk about how to achieve your goals. Because each person is unique, we like to talk to all the stakeholders at one time, even if it is during the evening or on the weekend. Years of experience has taught us that 30 minutes here saves hours & (lots of confusion) during the process of buying and/or selling a home.
Be prepared to talk about yourself (yourselves). We will ask you lots of questions. Some of the questions we will ask can be found in our blog articles. We are not looking for answers to test questions and you are not going to be graded or judged. We are looking for your wants, needs, tastes, motivation, etc. We are looking for ways to help you accomplish your mission. Feel free to Contact Us at your convenience.