Grace and I have known each other since we were in the same leadership & mentoring program through our local chamber in 2019. Though the program ended over a year ago, we still cross paths and I am eager for you to read her story today. The YoPro Know focuses on providing resources to help you succeed in multiple areas of your life. One of those areas often applies to buying a house for the first time! You will love this engaging story about the must-know details of purchasing your first home from Grace, who has been with Joan Herlong & Associates for 3 years.
A Greenville, South Carolina native and Furman University grad, Grace Herlong Loveless worked in the corporate world for most of her twenties, first in digital advertising and then for BMW corporate. At BMW, she traveled all over the Southeast and the world -- helping implement the BMW Genius program and BMW Future Retail strategy at dealerships. She and her husband were in high octane, high travel jobs, but then life took over. They became parents. Grace will be the first to tell you parenting hits you like a bag of bricks and everything changes. That led to a career change, from corporate to real estate (she is with Greenville-based Joan Herlong & Associates Sotheby’s International Realty), and a move from Atlanta to her hometown.
Owning a home is one of the best ways to build generational wealth. However, for numerous reasons (which is a whole other blog post I can write at a later date), it is not the easiest thing to do, but that makes some sense since buying a house is likely the biggest purchase a person will make in their lifetime.
Here are Grace's 10 (ish) steps to know before buying a home – everything from picking out the right Realtor to what to eat the first night in your new home.
Step One: I know I am biased here, but I’m also NOT biased because I was once a first-time home buyer myself – GET A REALTOR. Seriously. You need an advocate in your corner, someone to guide you through. Don’t just go with your best bud, your neighbor, or the first Realtor you meet. Interview several, find one whose communication style works for you, and who you feel you like and trust. Make sure they understand that you’re a first-time homebuyer and they will need to shepherd you throughout the process. Often, Realtors forget what all first-timers don’t know – and you’ll get to closing and realize something wasn’t done properly for you. So seriously – step one needs to be GET A REALTOR. Before you start browsing websites, popping into open houses, or clicking that “see this property” button on Zillow (don’t do that, by the way, which I’ll get into in a minute).
Step Two: Get preapproved. With how quickly the market moves right now, especially in the first-time buyer price range, you simply cannot see homes until you’re approved to buy them. You’re wasting your time, and your Realtor’s time, and the sellers’ time. You may fall in love with a house and it’s already gone before you get preapproved. If you’re serious about finding a home, put your money where your mouth is and get preapproved! I recommend working with a local lender – not some big box bank that you find online – as often there will be obstacles during the closing and having a lender advocate in your corner to get you to the end of the process is just as important as having a Realtor in your corner to negotiate the details. I recommend you ask your lender to estimate how much cash you will need for your down payment and closing costs on your projected home purchase price.
Step Three: Your Realtor will start sending you properties that match your needs, but we all know you’ll be browsing Zillow in the meantime also (who doesn’t?). Remember – DO NOT click “see this property” on Zillow or Realtor.com – because that connects you with an agent from their list. That agent IS NOT the listing agent – and you’re wasting their time. They don’t work for free and it’s not fair if you already have an agent to have someone show you the home. Call your Realtor when you want to see homes – that’s literally their job and what they’re paid to do! Oh wait, you think, aren’t Realtors expensive? Well, not to buyers! The sellers pay the realtors (both listing and buying agents) out of their transaction proceeds. So, all you pay for is the price of the home and closing costs.
Step Four: Make an offer on a home! I know what you’re thinking “Wait wait, I’m still hung up on step three!! I don’t pay for the realtor?” No, the seller pays for the realtor. Realtors make a commission, which is a percentage of the sale price of the home. The seller has already prenegotiated how much the buyer agent will be paid with their listing agent before they listed their home. All you have to do is make an offer on the home (oh yeah, this is the real step four) and come to an agreed-upon purchase price. You get your mortgage, then at closing, you bring your down payment and whatever cash needed for closing costs. To go under contract you have to submit “earnest money” with your offer – this is basically collateral that is held in escrow to ensure that you’re serious about the contract. It comes into play later. Step Four (A): Just because you make an offer doesn’t mean you’ll end up purchasing the home. In today’s market, especially in the first-time buyer price range a lot of homes are going quickly with multiple offers. A good buyer agent will be able to help you strategize to make your offer more attractive/likely to be accepted. In a normal market, you offer and negotiate with the seller – and sometimes the price you’re willing to pay on a home is lower than a seller is willing to accept. On average, buyers offer on two to four homes before they land one. Step Four (B): Once you are under contract, do not under any circumstances make any large purchases from the date of the contract until you close, so that your ability to purchase the home does not change. Wait to purchase any furniture or that new car, until after closing.
Step Five: Once you’re under contract, depending on the type of contract you have, your Realtor schedules inspections (because you have to know the condition of the property), and then based on inspection findings, you negotiate repairs. The number and types of inspection steps vary state-to-state. This is why you need a Realtor who is licensed in your state. Once you request repairs and you’ve made it through that hurdle of negotiations, it’s almost smooth sailing to closing. I stress almost.
Step Six: Your lender will want just about everything except your first-born child for you to pass through underwriting. Pay stubs, tax returns, whatever. Sometimes a letter from your employer, especially if you’re a remote worker (hello pandemic!) is required to confirm that you are purchasing the home and you will not be losing your job anytime soon. The lender basically wants to ensure that its investment is protected and you’re gainfully employed – and you will make all payments as you should. During this period, your lender also will order an appraisal. An appraiser goes to the home and makes sure that you are not paying above market value for the home just to get it – because it’s the bank’s investment and if they have to take possession of your property they don’t want it to have been a bad investment. If the home does not meet appraisal – meaning, it appraises for less than the purchase price – that is another round of negotiations to be done between your Realtor and the listing agent.
Step Seven: Reinspection – if the seller has any repairs done, I always recommend that you hire the inspector to come back out (for a smaller fee) and inspect to ensure that all repairs were done properly. This has saved several of my clients thousands of dollars. Your Realtor and you are not properly qualified to look at a repair and determine if it was done properly. It’s a small price to
pay to ensure that your investment is protected. Your Realtor also will want to have all receipts and invoices of repairs from the qualified and licensed contractors submitted to ensure that the work was done properly.
Step Eight: Final Walk-Through! This is to confirm the sellers did not majorly damage something as they moved out. This is just done with your Realtor, no sooner than 48 hours before closing (often due to moving schedules it’s done the day of closing). This also checks to make sure that any personal property was supposed to remain with the home was properly left (such as window treatments, refrigerator, washer, dryer, the swingset, or whatever else you negotiated as part of the purchase price), and any personal property that was not supposed to remain was removed. A big culprit here is old paint cans – get the sellers to dispose of them.
Step Nine: CLOSING DAY!! Congratulations, you’re buying a house! In South Carolina, (the process varies by state) you go to a closing attorney’s office and sign your life away. I swear you’ll be signing so many documents, you should take an Advil beforehand so you don’t get a hand cramp. You have to sign your full legal name as well. You bring your drivers’ license, or passport, to confirm you are who you say you are. If you’re a recently married woman who changed your name, also bring a copy of your marriage license.
Step Ten: GO TO YOUR HOUSE AND DO A HAPPY DANCE! Now you can get started on painting and decorating! I always tell my first-time buyers that a rite of passage is to eat delivery pizza on the floor of your empty home on the first night there, while you take a break from painting!