For other parts in the House Hunting Series–Part 1, Part 2, Part 4

Today I’m continuing with my House Hunting Series with:

Part 3: Finding Your House and Making an Offer

After seeing countless houses that didn’t wow us, Josh and I had become a little jaded when it came to house hunting. What was initially a fun “We’re grownups” experience had become an annoyance. We thought, “How hard is it to find a house that doesn’t look like it belongs on that That 70s Show??” and “Why was wood paneling such a big thing?” or “Why is there a secret room behind the master bedroom closet? I’m pretty sure this might be a crime scene.”

Why was this a thing??

Some of the kitchens still look like this!

Serious, this room was located in the back of a closet behind a tiny secret door.

When we initially looked at the house online, it was out of the price range we came up with when we sat down and decided to buy a house, so we kept on searching. After weeks of duds, we went back and looked at houses we liked but weren’t in our price range. We decided to sit down and talk numbers again, and, after looking at our monthly budgets from last year, we discovered that we were low balling ourselves just a little. So we bumped up our price range and the house fell right into our search parameters. We asked Jason to make us an appointment to go see the house and off we went.

We walked into the house prepared for disappointment, but once we started touring through the house we found ourselves really loving it. There were no major upgrades needed that we could see. It hit all our wants— an updated kitchen, attached garage, 3 bedrooms and 2.5 bathrooms, a nice sized lot, and some perks that we weren’t really expecting like a GORGEOUS sunroom overlooking the well-landscaped backyard. After almost an hour of going from room to room, opening cabinets and closets, touring the backyard and Josh dutifully checking out the attic, we walked into the foyer and told Jason “We think this is the house.”

We left in awe and with lots to think about as we decided on our next steps—that was a Wednesday. On Thursday, we decided we wanted that house and told Jason we were ready to make an offer. We met with him at 7:30pm Thursday night to write up the offer.

It was at this point, and not a minute before, that Jason asked us to sign a contract for him to be our agent—which immediately said yes to and signed right away. We talked about Jason being our exclusive agent representing only us, meaning that he could not represent a seller on a property we were interested in. Then we went through all the legal mumbo-jumbo that is associate with house buying. He talked us through the whole process.

1. First we would make an offer—the sellers would probably counteroffer, then we might make a counteroffer until we were able to agree on a price. Once the price is agreed upon, the offer becomes a contract, which all parties sign and then the house is “Under Contract”. Next you enter a Due Diligence phase.
2. Due Diligence is a specified period of time where the sellers agree to take the house off the market, while the buyers are able to have the house inspected, appraised, and work on getting their mortgage loan approved. Typically, the due diligence period lasts around 4 weeks and during that time the buyer can back out of the contract for any reason at all, while the seller MUST keep the house off the market.  As an incentive, the buyer offers the seller a Due Diligence fee which is a small cash payment of around $100-$300 that the seller keeps even if the buyer backs out. It’s also typical for the buyer to offer a “Good Faith” Earnest Money deposit. This money, normally a couple thousand dollars, is held by the buyer’s agent until closing.
3. After the Due Diligence period has passed, the buyer can still back out, but they will lose the Due Diligence money and the Earnest Money, plus the money that was spent on the inspections and appraisal, so it’s a good idea to stick to the schedule and back out before the end of Due Diligence.
4. Closing usually occurs an average of 45 days after the contract is signed, which gives the buyer time to get their mortgage and the seller time to pack up and move.

We took a look at the seller’s disclosure, which would have disclosed any serious issues with the house, such as leaks in the roof or a pest invasion—luckily there were none. Then we looked at what the sellers would be leaving behind—their refrigerator, which I loved and we didn’t already have. Finally, it was time for the offer.

Jason told us that most houses in our area ended up selling for around 97% of the asking price and that after doing some research, he found that our house was listed at a very reasonable price. Josh and I thought about numbers and Josh tossed out 94% of the asking price. He reasoned that if we could get them down to 3% by the area standards, we would start out at 6% down and be comfortable when they countered. Jason agreed and thought we had a solid, respectable offer. We decided what our Due Diligence money would be and what our Earnest money would be. And then we signed around 50 pages of legal documents before could send the offer over to the sellers.

At this point, the ball was in the seller’s court and we’d have to wait to see how the responded.

Be on the lookout for Part 4: Under Contract

If you’re in the market for a house, recently bought a home, or want to own a house in the future—leave a comment and tell me about your experience or let me know if you have any questions!

–Mrs. Dominico

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