The home buying process can be a bit intimidating if you haven’t bought a lot of homes. Even if you’ve bought a couple of homes in different parts of the country, the home buying process is always unique to a local real estate market. This podcast gives you an overview of the home buying process from A to Z.

Home Buying Process

As I said on this podcast, you really need to do a good job with your due diligence. Buying a home is not a time to make any big mistakes, especially if you are retiring. Who wants a nightmare in retirement? So I always recommend finding a very professional buyer’s agent with experience and integrity, and I always recommend hiring a local mortgage broker. Buying a home is hard enough without mistakes or lack of knowledge that could cost you your dream home, and when I say “lack of knowledge,” I’m not referring to you, but to the professionals you hire.

Master the home buying process with the right professionals, and everything will go as smoothly as it possibly can, which still means no transaction is going to be a cake walk.

Possibly Related Posts:

• Sequim Buyers Pause
• How Does a Bump Clause Work?
• Election Year Slows Home Buying
• Digital Signatures on Real Estate Documents
• Architectural Chaos

Sequim Buyers have paused slightly as we go into the fall months, but not because of the seasons of the year. There is a reason many Sequim buyers have hit the pause button on their plans to retire in the Sequim area and buy a home. Can you guess what that reason is?

Sequim Buyers and Weather

The vast majority of Sequim buyers are retirees coming from all over the country and a small number are from Europe. That means that our buyers come from New York to California, from Alaska to Florida, and Hawaii and almost every other state in the Union. These buyers are typically selling their current home, or they’ve already sold it, and they have been looking at the Sequim area for months and very often for years. Such a move is a major transition for anyone, of course, and takes planning and time to coordinate the sale of a home, the purchase of a home, moving a lifetime of personal possessions, and making all the other transitional decisions necessary.

So what happens when there is a hurricane that devastates a major metropolitan area? It interferes with plans to sell homes and move to the great Northwest. What happens when there is a once in a lifetime hurricane that hits Texas and gulf states, followed up by another massive hurricane that hits Florida and eastern states? 

Sequim Buyers Pause

Epic natural disasters not only hits the pause button for Sequim buyers from those states, but look at how many states are effected:  Texas, Louisiana, Mississippi, Alabama, Georgia, Florida, and South Carolina. And now a third hurricane is threatening to hit the east coast, so add North Carolina, Virginia, and all the way up to New York. And Californians are on edge with the recent 8.1 earthquake in Mexico and a series of small quakes across the fault lines in California all the way up to Alaska.

Of course, none of this will affect the Sequim buyers who already sold their homes and are sitting on cash, need to find a home to live in, and can pull the trigger quickly when they find it in Sequim. But that is a smaller percentage of the buyers compared to all the buyers affected by the hurricanes. 

What does this mean for the Sequim real estate market? It means we are seeing a slight pause for Sequim buyers, and so the hot market is cooling a little for a period of months. Eventually, we will get back to normal and find balance in the demand and supply curves.

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• The Home Buying Process
• How Does a Bump Clause Work?
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• Digital Signatures on Real Estate Documents
• Architectural Chaos

A bump clause is a special clause in an addendum to a purchase and sale agreement that gives a seller the right to continue to accept other offers and possibly bump the first offer out of the picture entirely. This means a bump clause can either help a seller or hurt a buyer. In this article I’ll explain when and how to use a bump clause.

Bump Clause Favoring the Seller

When does a bump clause come up? When you make an offer on a property, you may offer all cash or maybe you’re going to apply for a loan. There is no bump clause involved in those cases, but if you are going to make an offer contingent on the sale of your existing home, there is a bump clause in that addendum. 

Not all sellers will accept an offer contingent on the sale of the buyer’s home, but if they do, the form in Washington is a “Form 22B Buyer’s Sale of Property Contingency.” The bump clause gives the buyer a specific number of days to get the sale of their current home under contract, and if they don’t have it under contract, the entire transaction is terminated. While it is pending, the bump clause gives the seller the right to accept better offers and give you, the buyer, a notice that you can either waive your contingency or the transaction is terminated and the seller will sell the home to the other buyer.

Some buyers will cross this bump clause out so the seller cannot bump their offer, but a seller may reject that, too.

Bump Clause Favoring the Buyer

If you get a seller to agree to accept an offer that is contingent on the sale of your current home with a bump clause crossed out, like in the image above, then that clearly favors you as a buyer. Who wants to get bumped, right? On the other hand, a seller doesn’t want to take his home off the market for several months waiting for you to sell your current home either. 

All of this boils down to whether it is a seller’s market or a buyer’s market, and how motivated the seller is to accept an offer with a bump clause. 

Possibly Related Posts:

• The Home Buying Process
• Sequim Buyers Pause
• Election Year Slows Home Buying
• Digital Signatures on Real Estate Documents
• Architectural Chaos

This election year has substantially slowed down home buying in the Sequim area (including Port Angeles and Port Townsend). A presidential election year typically has a brief negative impact on home buying in retirement areas, and Sequim and Port Townsend are major retirement areas for residents from all over the U.S. But this election year in particular has had a huge impact on home buying. Here is what is happening in this small real estate market this election year.

Election Year and Home Buying

When we experience major economic effects, like a big slow down in home sales, the cause is rarely one thing. We often find the answer in a combination of contributing factors. Election year is one factor, albeit a major factor, that has caused buyers to postpone their home buying decision in an area like Sequim.

The slowed pace of home sales can be attributed to these factors, and each of them are significant, but combine them, and you have a substantial impact on home sales.

First, this is probably the most tension filled presidential election year in our lifetimes, and it is extremely contentious, and the future of our freedom and the foundation of this nation hinges on the outcome. No matter who you plan to vote for, everyone agrees on the importance of this election year. With so much uncertainty, buyers’ default position is to postpone their home buying plans until after the election, and perhaps after the new year when the dust has settled.

Second, the inventory of homes retirees want in the Sequim area is so low, it is at a crisis level. Buyers are having a hard time finding the home of their dreams, because there are so few in the MLS (multiple listing service). This clearly inhibits home sales.

Third, retirees around the country are worried about our economy and their retirement mutual funds, because there are rumors of rumors of a massive stock market bubble that is about to pop. Who knows whether there is any truth to that, but the concern adds to the uncertainty that people already are feeling.

Fourth, retirees always slow down or postpone their home buying decisions as we approach Thanksgiving and Christmas and New Year’s Eve. 

Election Year Good News

There is good news this election year for home buyers in the Sequim market. You have an advantage if you are coming to look at homes in Sequim between now and the end of the year, because many buyers are staying away. For those who stay away, the home they dreamed of buying will be sold to those who do dare to come to Sequim despite all the uncertainties of life and despite this crazy election year. Wait until spring, and the home you have been watching on the MLS will almost certainly be sold.

The best homes in the best areas are selling now, and there are not very many of them in this current inventory crisis. Use me as a resource to gather information until you come. Email, call, or text. It may be a crazy election year, but I’m still working hard for buyers making their plans to retire in Sequim.

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• The Home Buying Process
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• How Does a Bump Clause Work?
• Digital Signatures on Real Estate Documents
• Architectural Chaos

Digital signatures have become the mainstay in signing real estate documents, at least for rural retirement areas like Sequim, Washington. Buyers come, look at homes, and either sign an offer while here or soon after with digital signatures when they arrive back home. Even after mutual acceptance there are documents that will need acknowledgement or approval with initials, and that can be done with digital signatures.

Remember Teletype machines? You may be too young to remember them, but surely you’ll remember the early fax machines. I remember when faxes came out, I said something I laugh at now. I said, “Wow, what are they going to come up with next!” I had no idea. Computers and the Internet have launched us into hyper space compared to the old fax machines. And digital signatures are part of your future if you plan to buy a home.

Digital Signatures in Real Estate

There are a number of digital signature systems, and if you’ve used one, you’ll have no problem using another. They are very similar. When you receive a document for digital signatures, you’ll receive an email with a link that will ask you to authenticate that you are the correct recipient. Then you’ll choose your signature font, and most people just use the default choice. Then you’ll use your computer mouse to click on each signature or initial, and the software will take you through the process until you have completed your digital signatures everywhere they are needed.

Digital Signatures – No Printing – No Emailing

Once you complete your digital signatures, the sender will automatically receive the completed form back immediately. You don’t have to email anything back. You don’t have to scan and email, and you don’t have to fax anything. The final document is a pdf, and can be emailed to anyone, including the other Realtor and the escrow company. This technology simplifies and speeds up the paperwork process for everyone. I love coordinating documents with digital signatures.

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• The Home Buying Process
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• How Does a Bump Clause Work?
• Election Year Slows Home Buying
• Architectural Chaos

There is such as thing as architectural chaos. It’s hard to define, but I’m reminded of how Justice Stewart Potter described pornography in a 1964 Supreme Court case. He famously said, “I know it when I see it.” That’s how architectural chaos is. It would be virtually impossible to define, but I definitely know it when I see it.

Architectural Chaos

I showed three homes yesterday to a couple who are very excited about moving to the Sequim area, and each of the three homes was unique and substantially different than the others. The first home was nice and fairly traditional, but as we walked through the home, nothing happened. In other words, it wasn’t emotionally thrilling, exciting, or moving. It was just a floor plan. Nothing weird, but nothing particularly noteworthy. 

The second home we walked through was a delight from the moment we walked in the front door. There was no architectural chaos in this home. This was a home built in the ’70s, but the floor plan was especially pleasing. It was a little different than the traditional living room, dining room, kitchen combo, but it was somehow very pleasing on a deep emotional level. The kitchen and dining room had been remodeled nicely, and everything seemed to flow. This is what really wise architects do. A great architect creates a floor plan that flows and is pleasing to the emotions and the subconscious. On paper, the average person cannot tell the difference, but when you walk through a home with architectural chaos, your spirit will know it immediately. You may not be able to define it, but when you see it, you’ll know it.

Architectural Chaos Not Limited to Older Homes

The third home we viewed was a modern home, probably 40 years newer than the second home, and it was built with excellent materials and workmanship. But . . . this home instantly sent messages of architectural chaos to me and my clients. It was subconscious at first, but then as we walked around the home and discussed its features, the good, the bad, and the ugly, we began to recognize the architectural chaos we were feeling deep inside.

A good architect will not create architectural chaos, but clients often have an idea they will insist an architect put to paper. What’s an architect to do if the client insists on a certain floor plan if the client is the boss and the client is signing the checks? 

This home had a combination of big archways Spanish style adjacent to contemporary obtuse angles and something that appeared to be a combination of several architectural styles. The result was architectural chaos that you could feel, but not necessarily describe. No wonder this home had been on the market for a long time. While no one probably understood why this home had not sold for a long time in a very hot market when almost everything was selling, I believe the reason had more to do with architectural chaos than anything else.

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• The Home Buying Process
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What if a buyer and seller talk directly without their Realtors involved as intermediaries? This can happen, sometimes unintentionally, and sometimes before closing a buyer and a seller have an occasion to meet each other and talk. What are the pros and cons of a buyer and seller talking to each other?

Buyer and Seller Talking! OMG!

Most Realtors get paranoid at the very thought of a buyer and seller talking to each other. Realtors want to “control” their clients, because they fear their clients will say something wrong. There are many stories about the seller who says to the buyer, “Since we got rid of the termites, we haven’t had any issues.”

Buyer and Seller and Ethics

There is an ethics issue for Realtors. A Realtor cannot communicate with the other Realtor’s client directly or indirectly. That’s why a seller should communicate through his listing agent, and the buyer should communicate through his buyer’s agent. But the clients themselves are not subject to the Realtor’s Code of Ethics, so if they talked to each other, they would not be in violation.

As a general rule it certainly is not a good idea for a buyer and seller to talk directly with each other during negotiations. But I have had buyers who did talk to a seller to get instructions on how to operate an irrigation system.  And frankly, if buyers and sellers have to go through their Realtors just to say, “Hello,” or something else that does not effect the transaction, especially when the buyer and seller get along very well, a Realtor would be hard pressed to stifle the clients when it would just be rude and offensive.

I believe there’s a bigger danger. If a Realtor does not communicate well with their own client, and they are making poor decisions on behalf of their client without telling their own client what is really going on, the Realtor can be the cause of a transaction dying.

Good communications between the buyer and seller are important, and that also means that both Realtors need to be good communicators, too.

Possibly Related Posts:

• The Home Buying Process
• Sequim Buyers Pause
• How Does a Bump Clause Work?
• Election Year Slows Home Buying
• Digital Signatures on Real Estate Documents