I've been reading up on the ancient Stoics lately and it's amazing how many tenets of Stoicism can be applied to real estate! One in particular is an exercise called a pre-mortem. Think about how a post-mortem is designed to figure out what happened when something has already gone wrong. If you were somehow able to go back, knowing what you found out afterward, you'd be able to avoid it in the first place!
This is the essential idea of the exercise and it can be very helpful if you're thinking of buying a home. This market can be brutal and there are so many moving parts to a real estate contract. Anything can go wrong during a transaction. Let's look at some of the ways you can pre-mortem your home search in order to be best prepared to find success!
Is your pre-approval current? Hopefully you have one already. But how old is it? 6 months? No, this will not do! Who knows what could be lurking in your credit history. Best not to be surprised and check in with your lender. If you lender isn't a local one, now's the time to shop around and talk to someone who lives and works in Lawrence and knows the unique market here.
Why would a home seller reject your offer & accept another? Like I mentioned in item 1, maybe your lender isn't local. Sellers in Lawrence tend to prefer local. Their agents recommend going with buyers using local lenders. We do the same. Do you have a good Realtor yet? A good agent will prepare you for things like this. And so much more! What's the market like? What tips are there for crafting a winning offer? A good Realtor is essential in any successful home search!
Getting caught up in a multiple offer situation. How are you going to handle this? What else, besides price, will help your offer's chances of acceptance? What are you willing to do, and what are you unwilling to do? If you know your limits, you're less likely to get into a situation you end up wanting out of. And if you lose one without compromising, then you know it probably wasn't meant to be!
What happens when you get surprised at inspections? Don't think this will happen? Notice I used the word "surprised." Anything can happen. When you pay an inspector to find the things wrong with a house, they're going to find things that are wrong. Even in a brand new house! Be prepared for what might go wrong, what you're willing to accept, and what would cause you to walk away.
What happens if the appraisal falls short? Your financing falls apart? There are solutions to these problems. Knowing that there are potential pitfalls beyond your control and being prepared to act when they arise is next-level home buyer preparedness!
What happens is either you or the seller falls ill during a transaction? What if someone loses a job? What if a tornado comes through before closing? What if you have to extend the closing to account for unforeseen challenges beyond your control? Again, anything can happen in a transaction. Being aware of this will help when the unexpected happens!
What if you get to closing, but the seller's having trouble getting moved out on time? What if they don't leave the home in a condition like you'd hoped? While there are solutions to these problems, sometimes there's little to nothing we can do but adjust. Home buyers who expect the unexpected are better prepared to handle problems that arise. And when things go perfectly well? Knowing what could have gone wrong makes everything seem that much better!
Having a good Realtor is critical to all of this. Do this exercise with them. An experienced Realtor will know the pitfalls and how to plan to avoid them, or to react to them when they do happen. Education is key! And to tie in another Stoic lesson here at the end:
“The chief task in life is simply this: to identify and separate matters so that I can say clearly to myself which are externals not under my control, and which have to do with the choices I actually control." -Epictetus
To premeditate on what's in your control, what's not in your control, and how you react will help you find success in your search for that perfect home. If you read the news, I'm sure you've heard about low inventory, rising prices, and bidding wars, etc. etc. etc. By doing exercises like a pre-mortem and having a great Realtor on your side, you'll be setting yourself up to land your dream home. And, to successfully navigate the problems that can pop up along the way!
-Ryan Desch, Broker/Owner R+K Real Estate Solutions