How Home Buying Works in Springfield, MO

Not we scared everybody with hey you need a bunch of money. There are there are ways one particular way in primarily that's used very commonly in our market to offset those closing costs. Right. Yes. And so in the contract we call that a concession. And essentially what we're doing is we're asking the seller to give us a credit to offset those costs at closing. So it comes out of the seller's pocket. It is extremely common in our market. It is something especially in the, you

know, lower to mid-range of the market. Sellers are pretty conditioned to know that that's an ask. Um, but you do have to factor that in when you're if you're asking for a bunch of money off the purchase price and a concession. That typically doesn't fly in our market. you have to kind of choose one or the other or a combinate a smaller combination thereof, you know, and and as our market changes, if we get into much more of a buyer market, I'd say we're pretty balanced

right now, but uh that may change, right? And that's why it's important to have a really good lender and a really good realtor that knows how much you can get by with, right? Because my goal is always for my buyers to to save them as much money as possible. But there are programs have limitations on what you can ask for. Generally, very true. Our costs are pretty low, like our origination part, which is really the only thing we control, keep that low.

We do high volume and so we try to keep that on the low end. But I have seen some lenders that are more expensive and then there's a limit. The loan programs limit how much seller concessions you can ask for. Probably the biggest one where it comes up is like a conventional loan, low sales price, you're limited to 3% unless you're putting 10% down or more. It's weird, but Fanny and Freddy, which really control the conventional market, have this thing where if the borrower is

putting less than 10% down, you're limited to 3% of the sales price. So, if it's a $100,000 loan, take that times 03, you get three, you know, $3,000 that you could ask for um in seller concessions, which is probably not going to be enough. Whereas, if it's a, you know, $200,000 home, 3% down, you know, you're getting close. You could probably cover pretty much all of them. But then you have FHA, which allows you to do up to 6%. Right. Which is going to be

more than you'll need. Yeah. So, yeah. I don't think I've ever hit a cap on FHA. Yeah. But we we have certainly ran up against that on the the lower end of the pricing market on conventional loans. And so, something that definitely is an issue. But, you know, we do I would say a lot, but we do a fair amount of transactions where we get people into a home with literally no money out of pocket. Like, you know, they don't they don't bring

a single penny to closing and they are a homeowner. No, I'm not advocating for that or saying it's a bad idea either way. I like everything, it all depends on an individual's specific situation and there's a time and place for everything. But, you know, again, pros and cons to everything, right? you don't bring any money down, you're financing a lot of money and you're, you know, you're paying for that over 30 years and so typically 30 years. And so that's just something that again, you kind

of have to decide if that's the way you want to go. But I have helped people recently with rent being as high as it is, purchase a house, bring no money to closing, and actually have a house payment that's within five to 8% of what their rent is. Sometimes a little above, sometimes a little below. It just kind of depends on what they're what they were renting. But we have done that several times in the last really 12 to 24 months.

I I do want to mention something that I get asked a lot is just like time frame. And of course I know all of this isn't controllable by you or me, but you know, I get asked a lot, okay, so how how long it by from the first call, how long can I can it be before I move into my new house? Yeah. And so of course some of that it's I'll take my end of it first and then I'll let you handle it. Some of

it's how quickly we find the house, right? Um cuz you might look for homes for for 3 days. I mean, shoot, I've I've gotten people under contract I've met them and got them under contract on a house in 24 hours. Uh but that's not common. Most of the time it takes, you know, weeks or sometimes months. It just depends on what you're looking for and and what what is available in the inventory in the market. Um but taking that aside, assuming that, you know, we find

you something relatively quickly, what does that time frame look like, Adam? So, it certainly helps if they're pre-qualified in advance because we've got everything already for the most part. We might get some updated items. Also depends on the loan program. You know, for your specialty programs like MHDC and Essex, I usually recommend you know, like a 40-day closing if you can, like an on or before because certainly with those programs, especially MHDC, we underwrite it then that file also goes to MHDC for them to

review a few things. So, I would say in general, generally speaking, most people do like a 30-day closing. That's you know, that this is like what I do all day. So, we fully focus on things. You and I I think have had deals where there's been kind of extenuating circumstances and they've needed to close in like a couple weeks. Yeah, yeah. Yeah. Sometimes there's an existing appraisal out there where they started with somewhere else it didn't work out and we're able to transfer it

over and that really helps speed things along, but people wonder like, well, what what's the lender actually doing for 30 days? We're doing a lot. So, we we contact the title company to make sure that the title of your house is free and clear. We don't do that, but we make sure that the title company does it. We get the appraisal going, which appraisers, you know, they're they're just like anyone that's any any professional that's good at what they're they do, they're going to be busy.

So, that might take 5 to 7, sometimes we get up to 10 days just depending on how busy it is, unless you want to pay for a rush fee. We have to send you, you know, collect documents from you, get that turned into underwriting, if we don't already have those things. So, there's actually a lot for us to do. Yeah, so, you know, we say you get pre-approved, and that can be done Adam's going to going to cringe, but that can be done like within

literally hours if if there is an extenuating circumstance, but typically we we see, you know, 24, 48, 72 hours, kind of depending on when during the week and what's going on. W-2 salary, decent credit scores, like everything makes sense. We've had people turn an application in and within an hour they've got a pre-qualification letter. The only reason it'll take longer is because we're just trying to, you know, like a borrower should feel like realize that we're working for free at that point. It's not like

the easy thing for us would be just to tell everyone they're they're good, but that's not the right thing to do. It's the easy thing, but it's not the right thing. Uh, yeah. When it comes to uh Yeah, so, I think I you know, then you find the house, you get it under contract, it's a typically like like Adam said, 30 to 45 days. Again, we there's there are ways to do that much faster if it's necessary, but it's it's it costs you a little

bit more. There's a lot of factors in that, but 30 45 days, you go through, you know, your inspection process, the appraisal process, and then you go to closing, and then at at closing, once you sign the paper, you get the keys and it and the house is yours. There's a little more to it than that too even on your end as a buyer. But but yeah, typically I mean we can we can turn you around from start to finish in 30 to 45 days. And

again, if you can't find a house, you can't find a house. It takes a little longer, but but that's a good kind of a time frame for people to have in their minds, especially if they're renting right now and you're trying to figure out, hey, I got to turn in my 30-day notice, right? But I need to find something or my lease is ending. I tell people all the time contact me three or four months before your lease ends Definitely. so that we can

get the process started. And once you're at that point of like 60 to 75 days out, we can go find you a house, get you under contract even if that contract period extends to 60 to 75 days. A lot of sellers will do that. Not all not all of them, but a lot of them will. Most of them won't do much longer than that. But there are ways to kind of do that so that way you have some peace of mind. If your lease is ending,

you already have a house under contract. You probably already been through inspections and you may have already had an appraisal by the time you turn in your 30-day notice. And that's the safest way to do that where, you know, you're not going to be homeless because that's when those extenuating circumstances Adam and I talk about are typically people that are going to be without a home. They they're not going to have a house if they don't get this done in a certain period of time. And

so we will always do everything in our power to accommodate that, but but you can often avoid avoid being being put in that situation cuz that's not a not a low-stress type of deal. So One one final thing that I'd want to encourage people on if they're watching this is that there's sometimes there's anxiety with people on will I qualify or will I not? I don't want to waste you know, they're thinking they don't want to waste their time. They don't want to waste our

time. I tell people like I would say 10 to 20% just kind of depends on the season of people initially apply and they don't quite have everything working in unison enough to qualify, but our philosophy is it's never no, it's maybe not right now. So, we'll actually oftentimes build a path forward and sometimes that's just a couple weeks of things that they maybe they need to save up a little bit of money to to you know, pay something off or whatever it might be. Maybe it

take a few months because they just started a business and they need to to have that business for so long before they'll qualify. Don't feel bad about having us look at your situation and then developing a game plan for you. Actually, it's really rewarding to help people that maybe they've been told by two or three other lenders lenders didn't really give them any direction. They get over to us. We, you know, check things out. Sometimes we're able to help them right away and then other times

we're able to build them like a game plan on what they need to do in order to qualify in the near future.