2022 Home Buying Readiness Checklist

I know you hear it all the time: “There are no houses on the market!”

That’s actually a true statement, but the implication is that houses are not available for purchase - and that’s simply not true.

The number of homes sold continues to outpace years prior, even great years in the pre-pandemic era. The volume of home sales has reached record levels.

What does this mean?

It means that buying a home is not impossible, but it is a challenge; and, it takes preparation to be successful.

We’ve created this checklist to help you determine your level of readiness and to help you take further steps toward your offer-winning strategy.

The First Steps

✅  Pre Qualification Think of pre-qualification as a starting point. It’s the step that’s required by all sellers before they will even entertain an offer. This is your very first step - even before touring homes.

✅  Pre Approval Wait! What’s the difference? The two terms are often confused and even used interchangeably, but they are not the same. Taking the steps with your lender to become pre-approved means that the underwriters of your mortgage have already approved your creditworthiness and agreed to lend you money. This creates a stronger position when making offers and provides a lot more confidence as you make BIG decisions.

✅  Provide a proof of funds for your down payment Although this is rarely required by sellers, providing a bank statement that demonstrates the availability of your down payment funds is definitely a great first impression to sellers and listing agents. Even if all or part of your down payment funds are coming from a family member, you can provide this proof in order to strengthen your offer.

✅  Do you have to sell a home in order to buy a home? If you currently own your home, will you need to sell the home and receive the proceeds in order to complete the purchase of your new home? Speak with your lender and your Realtor about this scenario to try and avoid having your new home purchase be contingent upon your existing home sale. In a strong seller’s market, it’s rare for an offer with a home sale contingency to be the winning offer. Take heart - if this scenario is unavoidable for you, there are ways to overcome this challenge!

Making A Winning Offer

✅  Pay your own closing expenses In years past, it was common for buyers to request closing cost assistance from the seller. However, it is not advisable to ask for closing cost assistance unless it is absolutely necessary.

✅  Minimum Appraised Value With the rapid price appreciation of real estate, sellers are often worried about stretching the limits of an appraisal. If you have to stretch significantly over list price in order to win, you should also consider the possibility of making up that difference by diverting some of your down payment funds to cover the gap. This tactic is commonplace these days and most winning offers address the minimum appraised value in some way or another. Let’s discuss this option in detail to determine if it’s the right play for you.

✅  Inspection Contingency Waiver Many buyers who feel confident about the condition of the home are opting to waive the inspection contingency altogether, or at least waive their right to ask for repairs after a proper home inspection. Although I do not advise this for most buyers, it has become more common for people to use this tactic in order to win.

✅  Escalation Clause When there is great uncertainty about which price will be most competitive, buyers are using the escalation clause to say “I’ll pay this amount over the next highest offer up to (a maximum amount).” Providing a range of purchase prices to the seller can be a winning strategy. Let’s discuss this option in detail to determine if it’s right for you.

✅  Financial Contingency Waiver If you’re pre-approved with your lender, and the underwriter has provided you a commitment letter, this is an option for you. It’s simply another way to try and compete with multiple offers by having fewer contingencies in the contract. It’s not recommended for everyone, so let’s discuss if this is right for you.