Home buying can be a daunting process, especially if you are a first time
homebuyer. However, with the right guidance, it can be a smooth, enjoyable experience leading to a great place to live
that's also a fantastic investment.
If you're new to home buying
or if it has been a while, I encourage you to check out some home buying tips.
What is the Process?
Pre-Approved for a Mortgage Loan
If you're planning on buying a home, the first
thing you need to do is check on your financial situation. You need to get pre-approved for a couple of reasons.
1) You need to find out how your credit is.
Many times there can be a mistake or older negative accounts that can come back to haunt you. If you run into one
of these problems and you are working with the right lender, he or she will give you tips to improve your credit so that you
can purchase your home as soon as possible. Even if it takes a few months to a year, a good lender will hang in there
with you while you increase your credit score. I encourage you to check out the mortgage lenders on the mortgage tab
above. All of them are exemplary and will work for your benefit.
2) You need
to know how much you can afford. One of the most frustrating experiences is to fall in love with a home and then find
out that you can't afford it. The pre-approval process allows you and your agent to only view homes that are in your
price range, thus allowing you to make a choice you can be confident in.
Once you find the home of your dreams (or the home you'd like to live
in until you can afford the home of your dreams), it's time to make an offer. This is where having an agent is extremely
important. A good agent will provide you with information about similar homes that have recently sold in the neighborhood
for comparison (also called comps). This enables you to see what kinds of prices other buyers have paid for similar
homes and will help you decide what to offer on the one you are buying. You and your agent will talk about the condition
of the home and features that may make it worth more or less than other similar homes.
This is also the time to consider when you want the close of escrow
to be, what kind of earnest money you will put down and whether or not you will have a home warranty on the new home.
The purchase contract is a binding contract so it is important that you understand it. In California, this is a ten
page document, so make sure you ask your agent to explain anything that is not clear to you. A good agent is willing
to spend as much time as necessary for you to understand what you are signing.
Once you put in your offer, the sellers may submit a counter-offer.
This means that they accept all the terms of the offer except for the ones listed in the counter-offer. You then have
the choice to accept their counter, make your own counter, or back out of the purchase. Usually, buyers and sellers
come to an agreement without too much difficulty and before you know it, you are under contract and on your way to owning
your new home.
When you wrote your offer, you agent will have collected a check from you for your earnest
money. Now that you are officially under contract to buy a home, your agent will open escrow at a title company.
The title company will cash your check and hold the funds until the close of escrow, at which time, they will credit the money
to your closing costs.
If you choose to cancel the contract in a manner not provided
for in the contract, you may have to forfeit the earnest money to the seller as damages.
Once the buyer and seller have agreed upon the terms of the sale, the inspection
period begins. Unless otherwise stated in the contract, the inspection period is 17 days long. The buyer is allowed
to do any and all inspections he wants to do within this time period. I recommend doing a general inspection and a termite
inspection to begin with. The general inspector can give you an idea of what areas you may need to inspect further.
You can then choose to hire other professional inspectors as necessary.
After the inspection, you may request any repairs to sellers,
however selller is not obligated to respond to your repair request. And at that point it is your decision whether
to go on with the purchase or cancel the contract. On the 17th day after acceptance of contract by the seller, you
must remove all contingencies or cancel the contract.
Note: These time frames may be different if your contract indicates
a different amount of days. Your agent is responsible to keep track of when things are due and ensure that you have
the appropriate paperwork turned in.
Walk-Through & Signing
Throughout the escrow period (time between opening
escrow and the date that the house is officially sold), you will be working with your mortgage broker to ensure that he or
she has everything needed to process your loan. You will also provide information to the title company so that they
record the new deed in your name correctly.
The seller is required to complete all agreed repair before
the close of escrow. This is also the day that you, the buyer will sign the paperwork. Before signing, however,
you need to do a final walk-through. You and your agent will go to the home and check to be sure repairs were made as
agreed and that the house is in generally the same condition as it was at the time that you went under contract.
If something is not right NOW is the time to speak up. Your agent will have you sign a form that indicates that the
home is acceptable or that there are some items you disapprove of.
After you have done your walk-through and everything is satisfactory, you will go to the title
company and sign documents to transfer the home in your name and documents to take out a mortgage on the home.
Close of Escrow
On the close of escrow date, the mortgage company will send funds to the title company, which will then distribute
the funds as they are instructed to do. Once the funds have changed hands and the title company records the transaction
at the County Recorder's Office, you will receive the keys to your new home. Congratulations! You're the owner
of a brand new home!!
Of course, this is just a summary of the process of purchasing a home. If you
have more questions or would like to talk about looking for a home for yourself, you can call me at (858) 344-2709 or Email Me.
Below are some links that are helpful during the buying process.
How to Choose a Neighborhood
How to Choose a Home
The Basics of Making an Offer
Why Choose a Realtor® with a GRI or CNE designation?