12 Tips for Frustrated Home Buyers OR, How To Buy Your Home in 6 Weeks
Hi, my name is Annalise Demuth. I've been a realtor for 20+ years and I love helping people buy or sell a home. Almost every weekend I'm doing an open house in search of potential clients and I've pretty much seen every kind of buyer there possibly could be, i.e. the 'unicorn house' buyer, the 'we're not in a hurry' buyer, the 'just looking' buyer and my favorite buyer is the buyer with a list of 10 non-negotiable items on their wish list. Where I work, mostly in Sonoma County but in Marin County too, I frequently see the same buyers going to open houses every weekend! I know their names! I ask them how their week went!
I hope this list of 12 tips can help you figure out how to get off the weekend merry-go-round and buy a house.
1) Show YOU the money!
One cannot possibly understand the value of a home without understanding what the financial implications are to their pocketbook. For instance, you may have been looking at homes for months and finally found THE home you want to buy only to find out you don't qualify for a loan of that amount. OR perhaps you think you might qualify for a loan easily (If only I had a dollar for every time I've heard that) but your financial profile is complicated and the underwriting time frame excludes you from purchasing a home for a month. Or perhaps your debt to loan ratio is overloaded. Knowing what your monthly cost for a home BEFORE you walk into any home will inform you of your willingness to buy that home AND help you better understand the market overall.
Whether you walk into your bank or call a mortgage broker, do it before you go shopping for a home. It's 20 mins of your time and free. After the initial consultation it's another 25 minutes of your time to gather the docs and send them to your preferred lender.
2) Find a Realtor before you start shopping for home.
This one is a doozy and could cost you LOTS of money. Establish a relationship with a trusted Realtor. Interview a few of them. You'll quickly find communication is the key.
In the world of everything is at your fingertips via the internet, many buyers believe they have a thorough understanding of the real estate market based on online research. However, market conditions, neighborhood nuances, historical context of the market and current trends one cannot learn on the internet. As well, buyers find it challenging to remain objective and make rational decisions throughout the process when their offers have been rejected. Seasoned real estate agents bring a wealth of knowledge, negotiation skills, and a network of industry connections to the table. Their expertise can save buyers time, money and frustration in the long run. While it's understandable that buyers want to be actively involved in the process, recognizing the value of a professional agent can lead to a more successful and less stressful home buying journey.
3) Know the area you want to live in.
Understanding the market where you want to buy is a long process. This takes months if you're not actively writing offers, less if you are. When I work with a buyer I first ask, 'what do you want to do when you're not at home?'. I like to help buyers live where the quality of their life is enhanced by their idea of what a great home for them would be. For instance, if you're a hiker, Windsor is a great place to live. There are many walking paths in town and 3 nearby regional parks, The Foothill Regional Park, Shiloh Ranch and the Riverfront Regional Park. However, Healdsburg not so great. It's a great walking town but not so great with easily accessible parks. Knowing what you want to do when you're not at home will greatly inform where you live.
4) Know What the Homes You've Visited Are Selling For.
Another way of understanding the market is to know what the homes you've visited IN PERSON are selling for. When I'm working with a buyer, I always set them up with a 'neighborhood' market report (once a month) and a daily listing update of homes that meet their criteria that are active AND recently sold.
5) There is no such thing as a unicorn house.
People who are waiting for the right house to come on the market don’t buy a house. In general, and in your price point, there are probably 10 different types of homes that have some kind of minor variation. If you’re not buying one of those homes, then the home you want is in a different price point or a different part of the country! Whatever your list of must haves vs wants is, be willing to give something up, ESPECIALLY when there’s a low inventory market in place. For example, if you must have a 3-car garage go and look at every house in your price point with a 3-car garage. A buyer can't have 'selective looking'. If your must have is very specific, you have to look at EVERY home in your price point with your must have. One of those homes is your home. Focus on what you can make work instead of waiting for the right home to come on the market. It’s easy to get priced out of the market when you’re waiting for months upon months for the right house to come on the market.
6) Move your money to one account before writing an offer.
When you submit an offer to purchase a home the listing agent will carefully vet your offer and verify your ability to purchase a home. If you submit, as proof of funds, numerous account statements the listing agent will flag this as an issue. If not all the funds are liquid, you’ll be asked how long it will take to liquify the funds. Don’t think you’ll be able to wire funds from 12 different accounts 2 days before escrow closes. Escrow won’t close on time. All those wires must be verified and tied back to the original accounts you submitted for your approval. The underlying reason for this is money laundering.
Here’s a real time story with the same scenario. I had a client that sent 15 wires 3 days before escrow was due to close. One of the wires was from an account NOT used to qualify for the loan. Not only did we not close in time, but the seller issued a ‘notice to perform’. The buyer got lucky the notice was issued a day before the weekend which allowed the lender and escrow company to verify the wires and the buyer to submit the statements from the account she didn’t use to qualify. We literally closed by the skin of our noses. That was stressful.
7) Go look at 15 homes with your Realtor.
One cannot buy a home by looking at pictures online. Once you get to the house it surely doesn’t look like the pictures! Pictures always make a home look cleaner, larger, and better than in person. When you go with a Realtor you get the benefit of hyper local knowledge (what the nearby homes sold for), they listen to what you want, they tell you about things you wouldn’t think of (where the sun rises and sets on the house), what’s nearby that might interest you and most importantly how this house is valued by the current buyer pool – your competitors. This all takes time, but I guarantee if you go with a Realtor to look at 15 homes, you’ll buy one of those homes.
8) Make an offer on the house sitting on the market.
One big mistake buyers make is the falling into the trap of the ‘if they want it I want it’ mentality. Homes that aren’t selling is a function of the list price 100% of the time. If the home is priced correctly, it will not sit on the market. Be willing to look at homes that haven’t sold. Open your mind to the idea that you could write an offer for under the list price. As soon as the seller does a price drop to the correct price, numerous buyers will submit an offer and your now in a competitive offer scenario.
9) Lower your expectations.
I recently met a couple looking to move from the home they bought 20 years ago for what they could afford then. They told me they want a home with a view, private, a pool they don't have to take care of (a pool for the community or an HOA pool), a garden, 2000+ sf, remodeled and a 3 car garage. For UNDER $1M. Folks, that is a custom home!
Most homes being sold are original to the year built, updated (a remodel from 15 or more years ago) or recently remodeled. Don’t be shocked by what hasn’t been done that you might think should have. It’s a used home. People have lived there. It’s always bizarre to go into someone’s home and see how they live or what odd improvement they made. Instead, think about how you can use the home the way you want. What can you do to make it more comfortable for you. Maybe it’s more than you want to do, maybe not. But know that the most homes sell for very near or more than the list price in a low inventory market.
10) It’s better to buy than not buy.
Sometimes a buyer just can’t wrap their head around the cost of a home (see #9). It’s easy to get priced out of the current market and sometimes never buy a home. Maybe buying your forever home isn’t an option now, but that doesn't mean you don’t buy something. Do your research and ask your realtor for help. Sometimes buying a home out of state will get you on the property ladder. Or perhaps buying down for the short run (5 – 7 years) will help you build enough equity to get to the next purchase. Equity is a forced savings account. Always think of the purchase as a steppingstone. Perhaps it’s a steppingstone to your retirement or to your forever home.
11) Understand how interest rates effect the market in a low inventory market and your purchasing power.
In the December of 2022 interest rates went from 3 to a 4 as the first number. As rates climbed, the buyer pool lost their buying power. Even though the number of homes sold was less (an all-time low at the beginning of 2024) the buyer pool adjusted their expectations because the seller pool didn’t need to sell or wasn’t willing to give up their low interest rate. Thus, the value of homes in Sonoma and Marin Counties did not significantly lower. In fact, year over year they went up in value.
While the Bay Area continues to have a shortage of homes vs the number of buyers wanting to buy, interest rates will not affect the value of homes. The more important part if this advice is knowing how the interest rates change your purchasing power. Whether it be up or down, know these numbers well. If you've been looking for a while and you're thinking back on a home you could've bought you'll begin to understand how quickly a buyer can be priced out of a market.
12) The most important advice!
There are no bargains. Write your best offer every time. When you submit your best offer and it’s turned down, this is very valuable information. It means you need to pivot. See this video to help you better understand.
Please reach out to me if you have any questions or would like a highly skilled agent to help you buy a house in 6 weeks. You’ll never leave money on the table and will always be informed and educated. Annalise, 707-800-2225. Yes, please do call me and ask me those qualifying questions.