So, you’re ready to purchase a home in the PNW real estate market. You’ve read the headlines and understand how quickly our market can shift. Whether you’re a seasoned vet or a first-time buyer, there is a lot to understand about our current market.
Your greatest ally for success is knowledge and a sound strategy. My client’s approach the market educated and equipped with a plan to achieve their home-buying goals. Equally essential is a thorough understanding of the many intricacies of an offer and its presentation that we can use to position you as a strong buyer.
The market inevitably educates buyers. But with my guidance, you will save time, money, and potential frustrations along the way!
Our first meeting is an opportunity to become better acquainted, answer your questions, and to discuss your budget, needs, and desires.
I will assess your understanding of the current market fundamentals and fill any gaps in your knowledge, as well as discuss the necessary elements of a competitive offer.
I will develop a checklist outlining additional preparation that will aid your search and offer presentation.
We are well on our way to a great home buying experience!
Financing & Pre-Approval
Many buyers finance the purchase of their home, and your bank is probably the first place you imagine applying for a loan. But there is an abundance of products and institutions available to accommodate many different financing needs, and I strongly recommend speaking with a mortgage broker when researching your options.
Mortgage brokers are typically paid one point (1%) to research endless financial intermediary lenders providing you the best possible rate and terms, which could save you thousands in interest.
A good broker or banker will take the time to properly educate you on your approval limits, terms, and closing costs.
Your lender representative will then provide you with a pre-approval letter which we will include with our offer presentation.
All licensed brokers and industry professionals receive their inventory intelligence from the exclusive Northwest Multiple Listing Service, often referred to as the MLS. This listing service is what real estate search sites, such as Zillow, Redfin, Realtor, etc., sweep for their listing content.
Based on your criteria, we will build your personalized MLS search and make adjustments as needed or desired as we advance through the home search process.
Found One, Now What?
From 2014 through spring of 2018 homes in the PNW would typically sell within 3-12 days on the market. Time was of utmost importance. Buyers were required to go to great lengths and waive many, if not all, contingencies to win out against multiple offers. As our market continues to cool and inventory increases, we are experiencing a more normalized buying climate. In years past, nearly every home, regardless of its condition or location, was highly sought after. Today, Buyers can be more selective – homes are spending up to 27 or more days on the market. Buyers have the option to add standard elements to offers such as inspection or sales contingencies.
But before we get too comfortable, it is necessary to understand that very desirable properties are still selling quickly. These listings are better known in the industry as “Cream Puffs”. A Cream Puff is in a desirable area, nicely updated, and priced at fair market value. These listings still require swift action and limited contingencies.
Crafting An Offer
Details from each listing’s unique elements are carefully considered when crafting a fair and appealing offer. As fundamental as hard numbers are to developing an offer, intuition and trend play a large part in the fine tuning. Emotions are significant in real estate transactions and will require consideration when tailoring and presenting offers to each individual Seller. Aside from the offer, real estate contracts are legal and binding documents. We will discuss each contract element to clarify all conditions, and we will review every term to ensure you are aware of and educated on the computation of time necessary to satisfy each term.
Earnest money is a deposit made, typically 3-5% of the offer amount, and held with the selling firm or escrow. This amount is presented with your offer in good faith and protects the seller in the event of a buyer’s breach of contract.
The deposit is made in the form of cashier’s check and must be deposited within two business days of mutual acceptance.
Earnest money is then rolled into the down payment at time of close.
The Escalation Clause Offer
An escalation clause is a tool buyers use to outbid competitors for a coveted home. Say you find the home of your dreams at a crowded open house. We have been made aware there is significant interest and other Buyers have, or will be making an offer. You don’t want to lose the home, but you also don’t want to pay more than you have to. The home is listed for $700,000, but because it’s so perfect for you, you’d be willing to spend $800,000 if you had to.
Here’s where the escalation clause comes in. You submit an offer of $700,000, but you stipulate that if anyone comes in higher, your offer escalates to $15,000 more than the highest offer with a cap of $800,000. So, if the highest bid is $750,000, you’ll get it for $765,000. ( Not to exceed your cap of $800,000) You’re auto-escalating your bid to exceed your competitors’ bids to get the home.
When a home is being financed through a lender, an appraiser is appointed to determine the home’s financeable value based on its condition and comparable most recent sales of listings in the area.
Once the appraisal has been conducted and the home appraises for the agreed upon sales price the loan can be processed.
If a home appraises for less than the agreed upon price, additional negotiations may be necessary.
These are the costs associated with the curating and processing of your loan.
This amount is variable depending on your loan type and purchase price amount and should be discussed with your lender.
These fees are out of pocket, financed into the loan, or negotiated with the seller in a buyers’ or neutral market.
Escrow is a neutral third party appointed to ensure the closing proceeds smoothly including the transfers of money and documents.
Escrow protects all parties by ensuring that no funds or property change hands until all conditions in the purchase agreement have been met.
Title & Title Insurance
A title is a bundle of rights to a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to formal documents, such as a deed, that serves as evidence of ownership.
Title insurance, typically purchased by the seller, protects the buyer’s rights to the property upon closing. Reviewing the title is one of the main contingencies of every contract. Buyers have five days from receipt of the title report to review. Typically, the report is clean, but there are rare circumstances that can impede the purchase of a home.
The journey itself has many learning curves, and at times it may feel like there are endless obstacles to navigate.
A large part of my job as your agent is to guide and support you during your endeavor.
Approaching the home-buying journey mentally prepared is the best way to achieve a more enjoyable experience, which is what I strive for with all my clients.
After all, this is an exciting time worth celebrating!
Now let’s go buy a home!
Who is Agent Jami?
I’m Jami Hammond-Christensen, your Windermere Real Estate Broker. I’m a born NW native raised in the shadow of Mt Rainier – later to become a downtown Seattle dweller with a passion for art, music, food, and design.
I’m driven by relentless ambition, laser sharp intuition, strategy, and progression. As a designated Certified Negotiation Expert, you have a significant edge when working with me while negotiating for purchase or optimizing the sale of your property.
I work hard and dream big.
My success is measured in laughter, and I’m fortunate to share that with my husband, two wicked silly kids, friends, and colleagues.
Selling real estate complements my greatest strengths. And I’m thrilled to share them with you!