Don’t Buy a House in Folsom…until you read this!

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So you wanna buy a house? Guess what? Lots of other folks do, too.

The market is heating up, with pending sales rising and mortgage lenders reporting an increase in inquiries and applications.

If it’s even close to what it was like last year, competition will be strong, and only the most prepared buyers (and agents) will make winning offers.

Whether you consider yourself a home-buying expert or a novice, there are things you need to know and do before you set out on your home-buying journey.

Here are my Top Ten Tips to get you ready

1) Get a real Pre-approval – I cannot stress this enough. No matter how great you think your credit and financial situation is, unless you are paying cash, you simply must get an underwritten pre-approval from a lender. When you find the right home, you don’t want to miss out because of some error on your credit report, a processing delay, or some new restriction or regulation, and you don’t want your offer rejected because of a weak prequal letter.  Armed with an underwritten pre-approval, however, you can confidently make your offer and know that you can close it. Even if you’re not ready now, it is important to hear from a lender, what you have to do to get ready.

2) Choose your lender wisely – Interest rates and fees are important, but there are a couple of other things to consider when looking for a lender. First, choose someone local. You want someone who relies on keeping a good reputation in the community, not someone at a distant call center. The best loan officer will not only have market rates and reasonable fees, but will take the time to explain the loan process, someone who realizes that an approval is more than just asking you how much you make and owe, and what your credit score is. You want a lender who will run your loan application through their underwriting system, and present you with a solid pre-approval. Lastly, you want a loan officer who will contact the listing agent after you submit your offer, to endorse you and assure the agent that he/she has done a good job qualifying you and that they can close your deal.  Every agent and many buyers have been burned by quicky pre-qual letters written by a loan officer who thinks he/she can wing it and sweet talk the underwriter into getting your deal approved. You need the real thing from a loan officer who can sell it.

3) Choose your Realtor/Agent wisely – An old family friend who lives out of town and ‘does Real Estate on the side’ may or may not be your best bet.  Should you instead use the agent who boasts they are number 1 in sales? The one who sends you post cards every month? The listing agent on the home you want to buy? Any of these CAN be good choices, but really, it’s going to be about their local knowledge, how they treat you, what services they offer and how they deliver them. Buying or selling a house can be stressful and confusing. Make sure you find a Realtor who is patient not pushy, who takes the time to truly understand your wants and needs, who knows the market and market trends, can work cooperatively with the other side, and recognizes that it is YOUR journey, not their sale, that is most important.

4) Be a Good Customer  – Be prepared and be serious. If you’re half in, your agent will be to. No one wants to spend their Saturday away from family driving around a buyer who isn’t ready, isn’t serious, or who doesn’t know what they want. Sit down and think about what you want,  what you need, what you’ve been hearing, and don’t hold that info back from the agent. While the agent should be smart enough to ask the right questions, if there are particular features you want or fears you have, let him or her in on it the secret.  If, on the other hand, you are unsure, casual, vague, don’t return calls or emails, your agent will think you are wasting his or her time. Tell them what you want and show them that you are serious and your Realtor will make it happen for you.

5) Do your homework – Yes, you must do your own research. Take responsibility for this important step in your life. Research and read about the community, the housing market, news and events, schools and school boundaries, costs and fees, crime and safety, arts and culture, parks and recreation. Your agent can help you with market stats and trends, but you are the one who will live in the home.  You can never know too much about the place you want to live.

6) Understand the process – Have  your Realtor go through the home buying process from start to finish. Get an understanding of the terminology. You don’t want to see your 14 page contract and initial disclosures for the very first time while you’re under pressure to make an offer. Knowing what to the procedures are, what terms like ‘escrow’, ‘contingency’ and TDS mean, and what the contract says will help you to remain cool, calm and in control throughout.

7) Write the Right Offer – Know what works and what’s expected in the market. What’s customary in San Mateo may not work on the homes for sale in Folsom and vice versa. ‘Start low and negotiate up’ may not be the best strategy. Seller’s may have multiple offers and won’t even consider yours. I’m not saying you have to pay more than list price, I’m saying that you have to know what works in your market.  Also note that it’s not always just about price. The escrow period, closing costs, a letter from to the seller, a phone call or email from your lender, a rent-back agreement, a neat, complete professionally written contract;  these things and more can help you get the edge in buying your home.  Your Realtor should know this.

8). Outside Advice – It’s okay, even a good idea, to seek the advice from your friends and family. Many of them have good information and experience to share. Don’t however, rely on that info as gospel. Your Realtor, loan officer, title company, and other experts in their fields may have value, too. Your uncle in Bakersfield who’s sold a lot of houses might say ‘You don’t have to sign that’ or ‘I  never heard of that’ or ‘They have to fix that’, but that doesn’t make him an expert on buying a home in Folsom today. Each home purchase is different from the next, and the rules, laws, trends and guidelines can differ by year, city, or neighborhood. Current data and advice from a local professional is what you need.

9) Don’t rush, but be ready – Once you’ve patiently gone through the pre-approval, selected and counseled with a good Realtor, done your homework, decided what your perfect house looks like, learned about what works in your market, and gotten advice from your friend who bought a house once so they must really know their stuff, be ready to pounce when you find the right one. The right house at the right price is going to go quickly. If you’re thoroughly prepared, and if it’s the right house for you, make that offer.

10) Lastly – Relax – You are armed with knowledge, and have a good trusted agent. There may be bumps in the road, but you and your agent can handle them. Be safe out there and enjoy the ride.

Questions or comments? Discuss in the Forum…

Steve Heard is a Realtor based in Folsom CA, and owner of – reach him at 916 718 9577