In the first part of my retrospective on using RML models to help me with my home buying process, I covered Org Charts and Process Flows. In the Process Flow, we had explained up to applying for funding, which is where we’ll start!
Business Analyst Tip: For a downloadable Zipped file of models templates, see our website here: RML® Visual Software Requirements Models.
Requirements models are useful for more than software requirements models; that’s my main reason for writing this retrospective blog post. While I know things like getting a mortgage won’t apply to all our business analyst readers, I hope this helps some other business analysts and their families!
Here’s how I used models in getting a mortgage. Before the prospective buyer (in this case, me) makes the offer, they are usually prequalified for the mortgage. Now that you have the contract, once you choose a lender you can lock in your rates. The banks will want a lot of information about you before agreeing to give you a mortgage. While it’s out of scope to go into everything in the mortgage lending process here, I did make the process easier by creating a Business Data Diagram (BDD) (Chapter 19 in Visual Models for Software Requirements) albeit without relationships.
The model below basically tells you what all information the bank will likely want from you, with call-outs as to some specifics. After the bank has all of your information, they order an appraisal (at your expense) of the house. If the appraisal comes back and the house is worth less than the value of the mortgage, the bank won’t give you that much money, so you have to go back and try to negotiate the price down.
Closing is what happens after everything is in order: the bank has approved your mortgage, the title is free and clear and all negotiations have ceased. I haven’t gotten to closing yet, but supposedly all the parties gather in one spot, the title is traded for money, and a lot of documents are signed. For that part, you will need identification and your down payment.
So what specifically do you need in terms of documentation to give to the bank? As I mentioned earlier, I created a BDD to show what information is needed (as copies of or original documents) in order to secure a mortgage. In that diagram, shown below, there are boxes that show the information needed as well as notes on to how far back these are needed. You can see how using a BDD made this clearer and easier to manager.
Finally, to help people planning their home-buying experience, I created a State Diagram (Chapter 23 in Visual Models) to show all of the states you would likely go through when buying a house, and how you move from one to the other. You start in the “Looking for a house” state and can move to “Negotiating,” “Under Contract-Option Period,” “Under Contract-Non-Option”, “Closing,” and “Home-Owner.”
The State Diagram above just shows what the major milestones are in the process and the basics of how you move from one state to another. For instance, from negotiating, you can either reach an agreement and move to being under contract…or not reach an agreement and move back to looking for a house.
Here are a few parting thoughts from this experience; I encourage others to comment on whether or not these models are helpful, and whether they align with their own advice/experiences:
Find a good realtor: we found that our realtor was very helpful in finding houses in the area we wanted that had the features we wanted once she knew what we were looking for. She was also great at talking to us before we started looking at houses to go over the whole process with us end-to-end and explain what her role in the process was and a brief overview of what we would be doing at every step.
Create a checklist/Feature Tree: it doesn’t have to be an actual model like the ones in my previous posts, but any sort of list so that you know what you want in your dream home before looking at any others can help you prioritize houses and not fall in love with the first house you see. Bonus points if you can prioritize your checklist/features and assign monetary values to them!
Start gathering your documentation and talking to banks early: If you can get prequalified or even pre-approved, sellers are apparently more likely to take your offer seriously. Also having the documentation speeds things along for the banks and allows you to give better, more accurate information when applying for prequalification/pre-approval.
Don’t stress too much about everything: the home buying experience is extremely stressful, and I found throughout that I just needed to calm down sometimes and look more objectively at the process, and in our case, having the models really helped. The house we ended up getting a contract for we really liked when we visited it the first time. But just to be sure, we visited at least 4 other houses and compared them all using the Objective Chains (Chapter 4) I had created. It turned out our gut feeling was correct; the house we wanted also had the least cost per square footage for the features we wanted. So, have something objective to compare all the houses you look at and know that if one house falls through, there will likely be others!