The Agent Free Guide

Initial Steps:

1. Get a pre-approval letter from a bank/lender so you know how much house you can afford.
• Call your current bank and ask them to pre-approve you. You can always shop for more rates later when you have a ratified contract. This normally requires a “hard pull” that can affect your credit score. However, credit bureaus are aware that potential borrowers will “rate shop,” so you generally have between a 14- to 45-day window, depending on which credit bureau, where all pulls are consolidated and considered just one.
• Ideal credit score for best rate is 740+. If your score is lower, you can still get a mortgage, it will just likely be at a higher rate. If you want to geek out, check out how lenders change their rates based on your score and LTV at the Loan Level Price Adjustment grid
• I like to go to bankrate.com to get a sense of where the mortgage rate is.

2. Identify properties you want to see based on your pre-approved amount. I recommend looking at properties in the area where you want to buy for about 6 months. That way you get a good idea of the inventory and market price.
• Most people use Zillow but I like Redfin.com’s interface. They have an easy user interface for tracking favorites, sharing them, and tracking the open house schedule.
• I use Realtor.com to get historical values of house. Most other sites blank this out. Note that Texas is a non-disclosed state, so sold properties normally show LISTED prices and not SOLD prices.
• Below is a map for visual effect:
• Legend: green = disclosed, red = non-disclosed, orange = somewhere in between

3. Leverage the seller's agent, after all they are getting paid to sell the house. Once you have identified the property that you want to see, do the following:
• Reach out to the listing agent and request for a showing
• Request a CMA (competitive market analyst) of nearby sales - I like to give them parameters (sold within the last 6 months nearby, similar size, etc) so they don't filter for only expensive comps
• Ask for the seller's disclosure; if it was a rental property, they might just disclosed N/A
• Note that the "as-is" clause does not relieve seller from their disclosure duties

If you want to pursue with the purchase:

1. Consider your situation and make sure you can provide a strong offer.
1. Add an escalation clause if need be
2. Ask for assistance with closing costs via a seller's credit if need be

2. Determine if you want to use an agent that you have negotiated with or go at it yourself. Here is an offer letter I’ve drafted to the listing agent:
📧
We are interested in and would like to make an offer for XXX of $XXX with the following contingencies:
• Home inspection = 10 days
• Appraisal = 18 days
• Financing = 21 days
• Closing: 30 days after contract ratification
A couple details on what we were thinking in terms of specifics:
• We are planning to represent ourselves without an agent in this.
• We plan to utilize conventional financing with XXX% down payment. Please see the pre-approval letter attached. I also retain the right to shop for other mortgage lenders for the best rate.
• Option period/cost would be $ for X days (I’ve done $100 for 5 days), with $ applied towards closing cost if deal goes through. (This allows you to walk away from deal for any reason.)
• Earnest money would be 1% of purchase price and can be placed at a mutually agreed upon escrow company.
Please let us know if this would be amenable to the sellers and we can proceed.

3. All offers are obligated to be presented to seller. So sit back and wait. If your offer is accepted, start the negotiation process (I.e. Replace a home warranty with seller's credit.)

Congrats! So your offer has been accepted, now what?

1. Schedule a home inspection. Find a home inspector or get referred one, just make sure they don't get kickback or any rebate by the referred agent. I used Thumbtack.com to find an inspector with a lot of reviews.
1. If you have a reliable contractor, see if that person is available to come with. This is your chance to find out any issues with your dream home.
2. Make sure to write down everything wrong with the house. Ours came with a video so we document and easily share with seller. This was helpful when we were asking for things to be fixed or to be credited at closing so we can fix them with our contractors.

2. Lock in a mortgage rate. Again, use bankrate.com, call your local lender, check out a few of the large bank offering rates, and ask family and friends for lender referrals.
1. Ask what the underwriting and origination fee is. Ask for the rate with no points. Ask for the rate with credit to cover some or all of those fee. Do the analysis and figure out what breakeven is and what you are comfortable with based on your finances. Need additional assistance, request a consult here: 📨Contact Us

3. Contact a title company if the seller doesn't have a preference. Shop for title companies, they all have different fees. Make sure you are comparing apples to oranges. I'll post a few examples of various Title Company Fees I've personally encountered.

4. Follow up on your lender to make sure the appraisal has been scheduled for. After all, if the house doesn't appraised, you will need to bring cash to make the difference or walk away.
1. Work with your lender to ensure that you can utilize all your closing costs. You can't get cash back and apply to the down payment if the lender intends to sell the loans to Fannie Mae and Freddie Mac. There are many ways to use this credit, check out Closing Costs and Credits for more details.

5. It is VITAL to stay on top of all the deadlines! I can't stress this enough. Coordinate with all parties involved to ensure you are on top of your deadlines. This might mean several emails to lender/title company/seller's agent a week. Obviously, be courteous, but insistent. After all, this is where you decided you could add value and not pay for an agent, so STEP up.