How To Be A Well-Prepared Home Buyer

You want to buy a home, which is awesome. Home ownership is consistently ranked as a key indicator of personal wealth, and paying your own mortgage sure does sound better than paying your landlord's. But just as you should eat before going grocery shopping to avoid splurging on Oreos & Cheez-Its, there are some good ways to prepare yourself before you start touring the open house circuit.

1. Figure out what your credit situation is. You can get a free credit report once a year courtesy of the US government, or pay a few dollars to get the latest one if you already did that more than 30 days ago. Also, if you aren't already, try tracking your expenses with Mint or something similar so you know where your money is going. If your credit score could be improved by paying off some debt, do it!
2. Start adding to your savings account. Even if you only have $50 a month to spare, start setting up a nice sized savings account. This will make you more attractive to lenders, and you're going to need money for the down payment, inspections, closing costs, moving expenses, and home improvement items (because everyone changes something when they move in!).
3. Talk to at least three lenders and get pre-approved. Each lender should pull your credit, so make sure you do this within a 30-45 day period so it looks normal on your credit report. Remember, they want your money as much as you want a new house, so ask about incentives, down payment assistance, monthly payments, and closing costs.
4. Look at houses -- online, not in person. Now that you have an idea of how much you can afford to spend, think about where you'd want to live and what you absolutely must have in a home. Search for homes in your price range and area that meet your minimum criteria. If you have a good number of matches, that's a good sign. I recommend using Realtor.com because it has the most up to date information, but Zillow and Trulia work also. Save your favorites.
5. Find a Realtor you like and trust. Why use a buyer's agent? It doesn't cost you anything (they will get paid at closing out of the commission the seller pays to the listing broker), and you'll have greater access to properties on the market -- the listing agent might not have time to show the home to you, and they represent the seller. If you can provide your Realtor with your pre-approval letter and a list of homes you like in that price range, that agent will instantly have a better idea of what you're looking for.
6. Look at houses in person! Finally! I know, seems like you waited forever for this. But you're making a big decision and you want to be prepared, right? That way, when you find the right house at the right price you and your trusted real estate advisor will be ready to write an offer immediately!

For more advice, check out this article from Girl's Guide to Real Estate or this one from The Simple Dollar.

Normal Housing Market Action, or a Bubble?

You may have read an article or two in the news recently that housing sales and prices have jumped nationwide, in some places by more than 10%. This is good news! And not just for Realtors. What's happening is something straight out of Economics 101: supply is low but demand is high, so prices are rising. For the Cincinnati area, we're seeing a lot of buyer activity but less than 4.5 months of inventory -- meaning that if no more homes came on the market, we would (in theory) sell out of homes by August. That's not going to happen, obviously, but it is a good indicator of what you can expect if you're buying or selling a home this year. 

A word of caution to sellers, though: while this is a sellers' market, your property will most likely be purchased by someone who needs a mortgage, so the price has to be at least within range of the appraisal value. Some sellers have been disappointed by appraisals that don't appear to be keeping up with the increased prices they keep hearing about...and that's because you're hearing the national figures, not the local ones. Prices in Cincinnati are rising at a much more conservative rate, but homes are selling very quickly. So it's up to you: list your home now and sell it quickly, or wait and see if prices continue to rise.

For more on why this is not a housing bubble, check out this article from Realtor.com.

Why Genuine Matters To Me

I'm sure I'm not the only agent out there who is bombarded by phone calls and emails enticing us to pay for various forms of marketing. Refrigerator magnets! Calendars! Your ad on a bus bench/billboard/golf scorecard! Web design with drone-written blog content! Social media managers! I miss being on the Do Not Call list.

One call I took last week was a company based in Texas that specializes in hosting agent sites, pushing "curated" content to your social media accounts and blog, and tracking every single person who visits your hosted site so that you can follow up with them. The rep asked me if my current site allows me to do that. When I replied that it does not, because people have to volunteer their contact information (opt-in), he said excitedly, "Oh, with this system they'll never know you have their information unless you choose to follow up." Because invasion of privacy is the thing to do to get ahead, I guess. The conversation went downhill from there. 

Another company, coincidentally also based in Texas, called me a few months ago offering a total web presence management package: website, social media, blog, newsletter, you name it -- they manage all the content for you, make sure you post regularly, and basically pretend to be you on the internet. I explain that it sounded great for some agents, but not for me since I'm capable of handling it myself and did I mention I have no advertising budget? The rep for that company got irate with me and accused me outright of not wanting to be successful. Customer service fail, honey. FAIL.

I am not saying that either of these approaches to get more business are wrong -- marketing is marketing, and I understand the concept of getting in front of as many people as possible and hoping they remember you. However, I can't in good conscience use any of these companies, and I won't be mailing out refrigerator magnets either. Here's why:

• My primary motivation in real estate is to help people. Hopefully I make money, too, but I can do that anywhere. It's the helping people part that's important, and most of these things aren't going to further that goal.
• Relationships are more valuable than prospects. My friends and family are not potential clients, they are the people with whom I choose to spend my free time. If I think they would be uncomfortable with a marketing technique, I don't do it.
• If I ever make a six figure salary in real estate, I want to feel good about how I earned it. That probably won't happen anytime soon! I have financial goals just like anyone else, but as long as I have worked honorably and consistently I will consider the money I earn to be sufficient for my needs.
• Spending money to make money only works if you're spending on something worthwhile. How about a coffee rather than a calendar? Or a monthly hangout session instead of a monthly newsletter? I could be spending a ridiculous amount of money getting my face in front of the most people possible and I might even get some business out of it. Or I could just spend money on quality time with quality people and take life as it comes.

There are plenty of people out there who will tell you that being successful in business means converting more leads or maximizing earning potential or climbing that ladder. But I know what success is for me: being able to sleep at night, and knowing that my friends and family think of me as Casey first, and Realtor later.

Do You Bank Online? You May Want to Read This!

If you do most of your banking online, or with a financial institution that doesn't have a physical location in your state, chances are it hasn't really bothered you. I've been banking online since 2004 and since I hardly ever need to write a check or talk to my bank, I just get that higher interest rate for savings and no-fee checking that I love.

When you're buying a home, though, you're going to need certified funds -- and some lenders will require that the funds come from your own bank account to make sure you're using your money and not a gift. Certified funds usually means a cashier's check...which is usually requested in person at a bank branch...which you don't have. And you don't usually know how much you need to bring to closing until the last minute!**

So here's a Pro Tip: make sure your financial institution can perform wire transfers, which is another commonly accepted form of certified funds. Learn what the rules are for different amounts (do they need a written request for transfers over $5,000?), what the fees are, what type of documentation they provide as a record of your request, and whether they can guarantee the deposit will be made within a few business hours (or better yet, immediately!). Do it before you even sign an offer on a home, and you won't have to worry about it when it comes time to close.

** This August, new regulations will be implemented requiring all buyers using a lender to purchase property to receive their closing documents at least 3 days prior to closing, which hardly ever happens right now. But more on that later!