When people say they dislike surprises, it’s a little bit like when someone says they don’t like change. Most people actually appreciate change and surprises – so long as the changes are pleasant or they perceive the surprises to be in their favor. It’s really only unpleasant surprises that agitate, irritate and frustrate the average person.I've found there is actually a pretty short list of unpleasant surprises which threaten to sour your home buying experience. If you can take a core set of actions to minimize the likelihood of this short list occuring, you’ll protect yourself against 90% of the unpleasant surprises and set your home buying experience up for success. Here are a few of those key surprise-prevention tactics that can take your fear of the unknown.
1. Read everything. It sounds basic to advise a home buyer to read their paperwork. It sounds basic, that is, until you’re in the midst of the process and are presented with literally hundreds of pages of documents to sign, sometimes over and over, and sometimes with a high sense of urgency. For example, if you are in a hot market, you might have to make offers on 5 or more homes before you get one that works for you. After the first few, it’s tempting to just start clicking away to sign the offer documents you’ve seen so many times before, without really reading the critical fine print before you send it back to your agent.
While it is socially uncomfortable to feel like people are sitting across the table waiting for you to read things before you sign them, your agent, mortgage broker and escrow officer really and truly do not mind. (And if they do mind, that’s really not your concern – read away anyway.)
Most smart buyers these days know they need a home warranty policy. But without reading what is and isn’t covered, you do yourself a disservice. Many policies offer optional extra coverage for a small fee of items like appliances, pools and air conditioners – which would normally be excluded under a standard policy.
2. Buy yourself time. Home buying in America in 2013 places buyers under a series of very tight timelines, deadlines and due-diligence-and-decision-making time frames. You might only have 10 days from the time the seller accepts your offer to make a final decision about whether to do the deal, 30 days to close escrow and an hour at the closing table to review your loan documents and commit to what might be the largest financial decision you’ll ever make.
These time pressures can lead to costly shortcuts and errors. It’s easy to under- (or over-) estimate what all the items in your home inspection report will actually cost to repair. Of course, if you overestimate, you won’t have a later unpleasant surprise – but you might endanger your decision-making in other ways.
So, buy yourself some time. Get out ahead of your inspection and document review contingencies by working with your agent to get them scheduled for ASAP after you get into contract. That will give you maximum time to schedule follow-up inspections with specialists like electricians, plumbers and other contractors if your home inspector calls out repairs you need to collect estimates and bids on.
If you blow through your inspection or loan timelines despite your most aggressive inspection scheduling and responsiveness to lender requests, don’t assume your only choices are to back out of the deal or plow ahead and take the risk of a later surprise loan problem or post-closing money pit.
3. Show up. Home inspections have come a long way due to our electronic age. It’s not at all unusual for them to be reported out in pdf form, and sent to the buyer via email within 24 hours of the inspector’s site visit. Today’s home inspection reports often include color pictures and easy-to-read, color-coded action item lists that pull out all the repairs and suggestions for further inspections into one handy list to help organize your contractor calls and home improvement store shopping lists.
And they will also often do the invaluable service of showing you how to operate some home appliances and pointing out where you’ll find your emergency shutoffs for gas, water and electricity.
In addition to these need-to-knows, the human touch you’ll get if you show up to your inspection can help you and your agent evaluate, organize and prioritize any repairs or upgrades the inspector deems worth doing, including which repairs.
4. Do your own math, diligence and following-up. Your agent and mortgage broker might very well be the highest-paid professional advisors you’ll ever have. And, contrary to what some would have you believe, the vast majority of them put in serious work to earn their keep. Closing a real estate transaction requires a vast and varied array of skills. But one skill most agents and brokers lack is this: mind-reading. They have no way to know:
The fact is, there are only so many things your agent can point out and warn you about, and these will generally be the things they know from experience to be important to the average home buyer. So if something is important to you, you need to let them know it and take every measure you can to protect your own interests. And there’s lots you can do. Show up at inspections, read documents before you sign them, do the math and then ask every single question and follow up every single qualm you have, until your concerns are satisfied.
David Demangos
Keller Williams Realty
Realtor® BRE# 01905183
Website: www.AwesomeSanDiegoRealEstate.com
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