Today's post comes in collaboration with my wonderful friend Laila.
Laila is an extremely warm person and someone who is GREAT at sharing her knowledge. A quality I love! From tips on how she maintains her gorgeous hair to putting together outfits for her kids - she has always shared little tidbits very generously.
I thought it'd be GREAT to ask her about an area she has expertise in - buying a home!
Laila is a realtor with J Rockliff and I asked her if she could give us the lowdown on all those burning questions every new home buyer (newbies raise your hands!) wants to ask their realtor. Even the ones that get awkward or you feel kinda lame asking about.
I am psyched to share what we talked about with you. There's some GREAT info in here and I hope it's useful for ya'll!
So here goes. No filters! Straight from the horse's mouth. Laila tells all. Let's get into it :P
Where do I start in the house hunting process? What are some good websites to check out?
There's a ton of apps and websites out there and it can get overwhelming! Start with websites like Redfin, Zillow & Realtor.com Zillow might be a little iffy because it's not always up to date, but the other two are.
Also, look for Open House signs in your neighborhood. It's a good way to get a sense of what's out there on the market. Some of these websites have an option to filter by "Open House" (Redfin has this) so you can look for them that way too.
Cool, and at what point do I reach out to an agent?
People tend to go to open houses before they reach out to a realtor, and that's totally fine. But I would say reach out to a realtor sooner rather than later. We have access to A LOT of information that you won't have access to on public sites.
For instance, I'm connected through the Bay East Association for Realtors and I have access to...
... ALL listings in an area
... Comparable sales numbers (i.e. sale prices of homes that recently sold in an area )
... Rent-to-owner ratios. (If you're buying a home as a property investment, you want to know if it's easily rent-able. Or maybe you want to know what it's like to live in a specific neighborhood - is there going to be a high turnover of people living there? Will your neighbors keep changing? )
... let's say you want to live in a specific neighborhood or even on a specific street, we can zoom in at that level and look for listings for you!
... we have easy access to insurance, mortgage & title companies, things that become important further down.
There's a lot of jargon involved when you're first buying a home. A good realtor can break it down for you upfront.
My friends have had different experiences when buying their first home - some say it's been great, others say it was really stressful. They said a lot of depends on who your agent is. How do I find a good agent to work with?
Asking friends and family is a great way. If they've had a good experience and can recommend someone then nothing like it.
Another thing that's really effective is: go to Open Houses! Figure out how much you can afford for a house (use a free calculator like this one on Redfin) and start going to open houses within that range.
Often times we'll fill in as the host for an Open House that we are not the listing agent for. Under 10% of people coming to an open house are coming for that specific house. So it's a great place for us (realtors) to meet leads! And a great place for you to meet realtors.
A friend of mine was looking for a home and we went to A LOT of open houses. In the end, we met an agent who was so informative and so nice. We spoke to him for an hour. That’s the kind of realtor you want! When we (my husband and I) were buying a home, we also found our agent at an open house. We felt comfortable talking to her and we exchanged phone numbers.
I'd definitely recommend a bit of an interview process. You can check out their reviews on Yelp, but mostly it’s the personal touch :)
How long does it typically take from start to finish, when you're buying a home?
You want to give yourself 6-8 months at least. Start 6 months to a year ahead.
If you're renting a place and your lease is going to end, and you're looking to buy a home soon, realize that it still takes 1-2 months to close the deal once you've finalized a home (closing costs, inspections, other formalities). So keep that buffer. Let's say your lease is ending in June, you want to start looking by December at the latest.
Makes sense. Do house prices vary seasonally. What's a good time of the year to buy?
Summer is peak season obviously - prices are high then.
If you start to look at homes in winter & spring, you may not find a lot of variety but you'll have more negotiation power. People are eager to sell.
Right after New Year's, prices are at a plateau. You could time it such that you're starting to look for houses around then. By summer they start popping up like weeds! You'll have much more choices, but the prices will be higher too.
Ok, what are the first few things you look at when you're searching for a home?
First and foremost - the area. Then if you're a parent, you're looking at school district. You can look up schools in a particular zip code on sites like GreatSchools.org. Check their scores and zoning rules (does your house fall into a particular school's zone or is it at the border?). And finally, look at the crime rate in the area. We give you a resource package with the contact info of the local police and they can give you details too.
Ok, so let's say I'm a newbie and I've decided to work with you as my realtor. Can you walk me through, step by step, what we'll be doing?
First, we'll start with your Budget. You'll go get qualified or pre-qualified for a loan from a bank. How much is the loan amount you qualify for? (this is based on your earnings, your debts). What value of a home can you afford? If you're serious about buying, you don't want to waste your time looking at homes that are outside your budget!
Keep that budget realistic. We'll use a monthly mortgage calculator to figure out your monthly payments. This depends on how many years you're taking the loan for as well ... 15 years, 20, 30.
Okay great, once we've sorted out my budget, what's the next step?
Then we'll look at your Wishlist. What's your ideal square footage? How many bedrooms? Yard or no yard? If you want to live closer to family or friends, we'll factor that in as well. I've seen that people can be quite specific on where they want to live! We'll start to narrow down listings based on these specifications.
Having said that, I've seen that buyers start with a wishlist and then sometimes they change their requirements altogether! So a realtor has to be acceptable to change along the way.
Another thing, a good realtor will watch out for if how your wishlist is playing out with your budget. Sometimes people get excited when they start seeing homes & they overstretch. You don’t want your client to end up “house poor”! I've learned to first build a relationship with my clients, understand their needs. That way I'm being responsible. With finances comes lots of emotions... a good realtor becomes almost like your therapist!
Hah! That actually makes a lot of sense. It seems like you really need to build a relationship and trust each other.
Definitely. The next step is I'll start showing you homes. Even here I like to give my clients space and don't follow them everywhere. Once they've looked through the home, I get their feedback.
I'll also start sending you email drips. I'll create a search based on your criteria and send you emails with listings, and get your feedback.
I like to take my clients around an area, give them a feel of the place. And I like to cultivate a relationship with them, meet them for coffee, learn about their needs and keep getting their feedback.
I like that personal touch! Okay, so let's say after months of searching, we've found that perfect home. What's next? How are we closing the deal?
First we'll get a comparative market analysis of that property. What are the prices of other homes in the area? That way we'll have a better idea of how much you should be paying.
Sometimes a seller might actively price a house slightly lower than market price. I've seen established realtors do this - they start low to attract buyers, and that leads to a bidding war.
When you're making an offer, you have to court a seller! A seller looks at family and things of that nature. I would write out an offer letter representing my client - take a snapshot of the family & present it well. Depending on how many offers they have, they may or may not respond to you. At this point you'll need to start negotiating or up your bid.
How quickly a house gets sold depends on how hot that property is. For instance, I saw this open house on Saturday and by Monday it was gone! If it's a good school district, and a prime location, it goes pretty quickly. If it's an older home... let's say there are issues listed in the disclosure... that might slow things down.
What are some red flags to watch out for when you're doing your due diligence?
Sometimes it's simple things like, checking out the neighbors. Just be present and analyze the neighborhood.
Pay attention to the Disclosure Statement that the seller sends you. Look out for things like - if they've built an additional room, is it up to standard and does it meet house regulations? Has it been authorized by the proper authorities?
Pay attention to what's close by. Say a train station or other noise-generating aspects. Your agent may tell you the windows are sound proof...great, make sure you test it out. You're going to be the one living here!
There are certain cultural things that, as agents, we need to be sensitive about. For instance, people from certain Asian cultures won't buy even the most beautiful house if it's near a cemetery.We just need to be aware of things culturally as well.
What’s the relationship like between the listing agent (aka the seller's agent) & the buyer's agent?
The listing agent is representing the seller. And the buyer's agent represents YOU.
Sometimes people choose not to work with a buying agent and go directly to the listing agent. Then the listing agent becomes a dual agent, representing both you and the seller. In such cases, sometimes they may be working in the best interest of the seller.
With a buying agent you get special treatment because they are only representing YOU.
The way the finances work is that the seller is paying a commission to the agents. If the house sells, the total commission, usually about 5%, is split between both agents. So we (buyer's agent) get a 2.5 to 3% commission if you buy the house. But honestly, as an agent you're not going to lose the trust of your buyer to get a few hundred dollars more in commission! A good agent will work in YOUR best interest when negotiating a price on the home.
Got it. I wondered about that! Alright, back to the closing process, how does that play out?
The seller sends you a Disclosure Statement on the house. You make an offer, negotiate on terms and price, they may make a counter offer. Finally they accept your offer. Great!
Now you want to get an inspection done. Let's say you find a particular problem and you want it fixed - write it down. Make it known to the seller.
Once the seller and you are in agreement, then we bring in the insurance and mortgage companies. You fill out paperwork for the Title etc. You'll also select a warranty package at this point, if it's an older home. Newer homes already have warranties that come with it.
That's about it. Then it's a done deal!
Do realtors specialize in certain areas and neighborhoods?
Yes, you can ask your realtor if they know a neighborhood well. For instance, I am very familiar with Dublin, Livermore, Pleasanton. I interact with families in these neighborhoods.
Sometimes a realtor might mention it in their bio. Occasionally, if they aren't familiar with an area, they may point you to someone else and get a referral fee for it. But this is rare.
What's the Bay Area market like right now? Are homes selling quickly? Are they selling at asking price, higher, lower?
The market is hot right now. Houses are selling quickly, and usually for higher than asking. At times, with just one Open House weekend, a house goes into "sale pending".
And finally, why do you like selling homes? :)
I love homes! I love looking at homes. I’m into home decor. And I love talking and interacting with people :) Buying your first home is an experience you will never forget! It has a lot of emotions attached to it. I get to be with people at such an important point in their life - it means a lot to me. I'm still in touch with my agent!
I've learned that you have to be good with people and very patient to do this job.
What's one piece of advice you'd give to a serious home buyer?
Sort out your finances first. Then write out your wishlist. The finances will dictate a lot of things.
Thanks for all this AMAZING information!!! It's so super helpful.
A couple 1:1 questions for you :)
What's a spot in your home you absolutely love?!
I like the outdoors and I love sitting in my backyard. It’s always breezy. I have a lovely veranda too, with a nice sofa set & some flowering pots. I have my breakfast here and if I want to do something peaceful, it's my go to.
What's something in your home you consider a prized possession you'd never part with?
I like my rugs! They are handmade Persian / Pakistani rugs. They really bring some warmth into my home. And I don't think it would be the same without them.