I have watched with interest the rise in popularity of shows like House Hunters, where the host, Suzanne Whang highlights the process of a home buyer or a couple buying a condo who are shown around to 3 homes by a real estate professional. After seeing the three homes and a regularly placed commercial break the home buyer comes to the real estate professional office to fill out a one page contract form. After another strategically placed break, viola, the buyer has the home and we get the opportunity to drop in on them 1-2 months after they have moved into the property they selected. All of this half hour, made for TV house hunting got me to thinking, How authentic is the House Hunter to the actual home buying process?

This is part three of a nine part series.

Lets review. At this point the home buyer has been working with a real estate professional and has viewed 3 homes and they are prepared to make an offer.

The buyers have made their decision and are prepared to make an offer to the seller. We as the viewing audience have been left in the dark as to which property that the buyers are truly interested in. This leaves us guessing which one that the buyers are selecting. What we are shown is that the agent has prepared a very thin folder that has a single page contract offer in it that is presented to the buyers. The buyers then sign this one piece of paper and we then are taken to commercial. This begs the question, Is it really that easy? Most first time home buyers that come to us believe that it is that easy and they along with the show could not be further from the truth.

The current Northern Virginia contract form for the base regional contract is 10 pages long. When you end up adding the addendum and contingency forms to the overall contract offer, the entire pacakge is over 20 pages in length. Why so long? Lets take a moment and see what the contract offer is made up of.

The offer to purchase contains the names of all of the parties involeved in the potential transaction along with the names of the parties that they are using as their agents, the definition of the property and the legal description of what is actually being sold along with all of the items that will be staying in the house. The buyer will put on paper what they are willing to pay for the property along with how they are planning on paying for the property with the down payment amount and the mortgage amounts and terms. The buyer may also ask the seller to pay for some or all of the buyers closing cost. The offer will also show the seller how much of an earnest money deposit the buyer is depositing with the buyer agents brokerage. The offer may contain a contingiency that will allow the buyer of the property to perform a home inspection along with an opportunity to void the contract if the buyer finds something that is not to the buyers liking. One of the most important factors of the offer is the proposed settlement date. This will establish when the seller will need to move out and when the buyer can expect to move in, along with when the buyers mortgage company needs to have the loan completed.

The show never lets you know what the buyer offered or how much the sellers ended up selling the property for. House Hunters also doesn't show you how they came up with the price that they offer.

How it really works: In the real world, we take the time to do a comparative market analysis of not only what is active and available on the market, but more importantly, they take a look at what has actually sold during the past 3 to 6 months in the Northern Virginia Real Estate Marketplace and for the specific community that the buyer is interested in. This gives the buyer a true indication of what home have actually been selling for an what buyers are actually paying. We also get an indication of what subsidies in the form of repair credits or closing cost credits that the home sellers are paying on behalf of the home buyer. This step should ensure that the home buyer is not overpaying for the property of their choice.

Although 20 pages sounds like a lot of information and a waste of trees, most of the contract offers is designed to a). protect the parties and b). explain what will happen if one of the parties does not do what they promised to do.