We make buying a home easy. Follow these quick steps to jump on the bandwagon to buying your next home:
Step 1: Get Your Financing Straight
I know you want to jump into browsing for homes to see what’s out there. But, trust me, you’ll just be wasting time. If you’re in browsing mode, no problem, but by the time you’re ready to make an offer, the homes you think you could afford at the time you’re browsing will have either increased (or decreased) in value by the time you’re ready to buy. So, you’re just going to get your hopes up.
Start with a NO HASSLE, NO COST Home Loan Pre-Qualification from a reputable lender. Most loan officers will provide you with a general estimate of how much you can afford. They will go over your current assets, income, and will estimate your mortgage and other payments based on your purchase price. Don’t skimp on the info. Make sure they ask you to give (or at least ask you for) items like your tax returns. A lot of loan officers will just tell you what you want to hear so that hopefully you will use them. But, if they can’t analyze your financial information properly, they can end up costing you thousands when your loan doesn’t get approved.
If you’re paying cash, great! Be ready to provide a copy of your bank statements verifying your assets. Your bank statement will need to be included with your offer.
- Tips for Getting the Best Mortgage: Consider the difference between fixed-rate and adjustable-rate mortgages. Fixed-rate loans have predictable monthly payments, while adjustable-rate loans may start with lower rates that could increase later. Understand your credit score and work on improving it before applying for a mortgage to get a better rate.
Step 2: Find The Community that Matches Your Lifestyle!
After assisting thousands of home buyers, we know the ones that love their homes the most are the ones that love their community! With Hyper-Local Expert knowledge in thousands of different communities and diverse lifestyles, our team of Local Community Experts can help you find something perfect for you.
What’s your lifestyle? The mission of our team is to only hire the top local experts that know their community and sell/promote their lifestyle. Whether you’re looking for the best community to raise a family, you want a social/active lifestyle, or you’re a beach bum, we can help you find the community that’s right for you. If you’re not sure of the right community, check out our Local Community Guides or call our Client Relations team who can answer your questions and connect you with a Local Realtor that shares your lifestyle.
- Community Spotlights:
- La Jolla: Perfect for Beach Lovers. La Jolla offers stunning coastal views, upscale shopping, and top-rated schools. It’s ideal for those seeking a luxurious seaside lifestyle.
- Mission Valley: Ideal for Families. Mission Valley boasts parks, family-friendly activities, and excellent schools. It’s a great fit for young families looking for convenience and community.
- North Park: For the Social/Active Lifestyle. Known for its vibrant art scene, nightlife, and trendy eateries, North Park is perfect for those who love to be at the heart of the action.
Step 3: Start Browsing Homes!
Okay, now that you know how much you can afford and what community you want to live in, it’s time to start browsing. Get set up with a home search account on the local MLS where you can set up and save your searches. We agree websites like Zillow or Trulia are good to double-check data, but those websites are strictly advertising-based and not regulated by the Department of Real Estate. The most accurate information comes from the MLS. Only an agent has access to all properties on the MLS; however, an IDX or RETS-powered website like the one in our Home Search will provide you with the most accurate information available to the public.
- Recent Market Trends: In California, housing prices have seen an average increase of 5% year-over-year. Understanding these trends will help you make an informed decision when browsing homes.
Step 4: Pick Your Local Real Estate Expert!
Now that you have an idea of what’s out there, I am sure you want to start checking out homes, right? You can search through our Associates with The Local Realty or, if you want to see agents from all companies, feel free to check out the International Network of Agents at LocalRealtors.com.
- Myths About Agents: Many think going directly to the listing agent to have them show you their listing might get you a better deal. The real truth is it doesn’t. Really! When a listing agent goes to list a home, they have a legal agreement called a Fiduciary Duty with the seller. This makes the agent work in the best interest of the seller. Instead, ensure you have the best buyer representation by working with a Local Realtor that knows your community and how to negotiate on your behalf.
- Client Success Story: The Johnsons were looking for a family-friendly community and had a tight budget. With the help of our local expert, they found a beautiful home in Mission Valley with great schools nearby, and the negotiation led to a final price well within their budget.
Step 5: Make That Offer!
Your offer should include your pre-qualification letter or a copy of your bank statements, along with a copy of your deposit check. If you’re unsure of who the escrow holder will be, your deposit check should be paid to the order of: __________________ Escrow. Leave enough space blank to fill in the escrow holder once your offer is accepted.
- FAQs:
- How Much Should I Offer Over Asking Price?: Depending on the market, offering 1-3% above the asking price might be necessary in competitive areas.
- What Are Common Contingencies?: Financing, inspection, and appraisal contingencies are common to protect you during the buying process.
Step 6: Open Escrow and Submit Your Deposit!
Congrats, your offer was accepted and escrow has been opened. The escrow holder will be responsible for coordinating the transaction and will be the 3rd party holder of all monies. Take that deposit check and get it into escrow!
Step 7: Get Your Financing or Cash Ready!
Talk to your loan officer or get your money liquid. Make sure that if you’re using a lender that they get the appraisal ordered ASAP. Your loan officer should provide you with a list of items they need to complete all conditions in order to approve and fund your loan. Make sure to get all items back ASAP to ensure your escrow closes on time, so you’re not penalized.
- Mortgage Comparison:
- Fixed-Rate Mortgages: Offer stability with predictable monthly payments.
- Adjustable-Rate Mortgages (ARM): May start with a lower rate but can fluctuate. Best for buyers who plan to refinance or move before the rate adjusts.
Step 8: Do Your Due Diligence and Order Inspections!
We recommend that you make sure to have a home inspection performed. The inspector should review the entire home, including the roof, plumbing, foundation, electrical, etc. They should provide you with a full report of their findings and make you aware of any issues with the home.
Step 9: Review and Sign All Disclosures!
You will receive all the seller’s disclosures which list what the seller knows about the property. These disclosures are to make sure that everything known about the property is documented. If the seller knows something is wrong with the property and they don’t disclose it to you, they can be liable for damages even after the transaction is closed.
Step 10: Fund Your Money and Close!
Now that all the paperwork is done, all that’s left is to fund your loan or send your cash to escrow. As soon as all of the money is transferred and documents are signed, the deed can be recorded.
- Closing Day Checklist: Make sure to bring a valid ID, all necessary paperwork, and be prepared to sign multiple documents. Once the funds are transferred, the deed will be recorded, and the home is officially yours.
Glossary of Terms
- Escrow Holder: A neutral third party that holds funds during a transaction.
- Contingencies: Conditions that must be met for a transaction to proceed.
- Fiduciary Duty: A legal obligation of one party to act in the best interest of another.
Congrats, you just went through the steps to buying a home! Now, let’s make it happen in real life, shall we?
