At the risk of sounding like a neophyte, I have to admit that when watching football games, there are certain plays and strategic calls about which I'm unclear time and time again. (I can see Cliff cringing now.)
The truth is, that while I've got a reasonable understanding of the basic mechanics (For example, I know there are four downs before the ball is turned over or punted away, I know that a gain of ten yards becomes a first down, I know that touchdowns are worth six points while field goals are only worth three . . .) it's the pesky nuances that easily pass me by. (What exactly is a "screen play" anyway and how is "encroaching" different from "off-sides?")
These are the questions that stymie me and make my husband volunteer to keep stats on the sidelines, rather than sit up in the stands with me. Thankfully, there are other husbands more patient and more willing to explain the yellow flags that seem to fly on nearly every play. (What's up with those darn flags anyway?)
I get the sense that I am not alone with respect to "nuances" and trying to understand a language that might as well be Latin (and in some cases, is). This isn't just true of football, baseball or other sports I watch my children participate in, it's true of just about every other activity or profession I can name. (What exactly is a "derivative?" What's "heresay?" And how does one "souvee" a chicken for goodness sakes?) Whatever your interests, there's a specific terminology that takes some practice and familiarity in order to accurately play the game. Agreed?
This is true with respect to Real Estate as well. Without practical experience, one can't begin to understand how each side lines up, what plays to execute, when to pass or when to run, and how to successfully reach the end zone. Moreover, the game of real estate changes not only from state to state, but from county to county, region to region and even neighborhood to neighborhood (as do the players). Real estate, almost more than any other profession I can think of, is incredibly LOCAL (!), as are the specific understandings with respect to the nuances of the deal. (Are there transfer taxes and who pays them? What are the point of sale ordinances? Is an attorney involved? Etc.)
I was reminded of that last week while answering several emails from a new Buyer I'm working with, who resides out-of-state. He's not naive by any means. At this point in his life, he and his wife are comfortably retired, they are well traveled, articulate, motivated and incredibly well researched, but buying Real Estate in the state of California is clearly a different animal from where they currently reside - as his pointed questions made very clear.
The difference between this client and many others, is that he's willing to admit what he doesn't know and seek the answers. (Good for him.)
So here is the game plan I shared with Mr. R and his wife that might help you as well; 30-days siphoned down to a few very basic paragraphs. Huddle up! "Hut!"
Buyers identify a property they are interested in pursuing. Buyers get preapproved with a mortgage lender. (This could easily be your very first step!) Buyers' agent requests a "disclosure package (discovery). The disclosure package is received, read, understood and signed off on by the Buyers. The Buyers write a competitive offer that outlines terms and price to be presented by the Buyers' agent("Consideration," or what's known as a "good faith deposit" MUST accompany the contract for a purchase offer to be valid. Good faith deposits are usually 3%, but are negotiable). Sellers accept, reject or, in turn, counter the purchase offer. Buyers do the same until BOTH terms and price are agreed upon and the contract is "ratified." The ratified contract is then sent to the title company (along with the good faith deposit) and to the mortgage lender and escrow is opened. A title search is ordered. An appraisal is ordered. Inspections take place. (Renegotiations may occur at this point, based on findings and the price may be adjusted or repairs may be requested.) Contingencies are removed. Homeowners insurance is put in place. Buyers have a final walk-through. The lender guarantees and underwrites the loan. Monies are wired and Sellers' loans are paid in full. Title is transferred to the new owners and escrow closes (typically 30-days). The keys are delivered. The moving truck arrives!
Touch down! (Now we're all on the same page of the play book.)
Any questions? (I promise not to leave you in the stands all by your lonesome.)
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.