Does your home need updating to sell, but you don't want to do the renovation? We have cash buyers who will buy your home!
By: Ryan Huggins
Buying a home can be a complex process with many important steps and factors involved that you may not think of in advance. How do you actually find a suitable home and when should financing be arranged, for example? With the below step-by-step plan below you will know exactly what to expect when buying a home in California.
Table of Contents
This is the first and most important step. You need to think about what your housing needs are now and for the next 5-10 years and if your current home meets them. If not, then it is time to think about where would you like to live, how big the house and lot should be, how many bedrooms do you need, which facilities should be nearby? Once you have figured out your housing needs, you can look for your next home in a targeted and practical way. One tip for this stage: think about if you want a home that's fully fixed up and "move-in ready" or if you're willing to buy something that will need some work. There will be different competition with each type of home and your financing options may be limited.
The next, and probably most crucial step, is to talk with a good lender. A good lender will look at your financials and tell you what you can afford to purchase. They can also give you various financing options and let you know what type of houses will qualify for them. If you need a good recommendation for a great lender, give me a call or drop us a line.
The next step is to work with a reputable real estate agent/Broker to find you a home. While you can look at sites like Zillow, homeowners will not let strangers into their homes to tour them. That is where working with a real estate professional comes into play. With a realtor you can get access to the homes, see how they relate in value to other comparable homes, and even place an offer on a home.
Now that you've found your dream home it's time to make an offer. Your real estate agent will be able to write the contract for you, present it to the listing agent and assist you during any counter-offers and negotiations.
Once the offer is accepted, this is where the real fun begins! Now that you're under contract you have the legal right to have an inspector come out and examine the house to determine its condition and the condition of its internal components. In Southern California, you typically have a general home inspector and a termite inspector come and look at the home. If they recommend a specialist look at particular items (common ones being chimneys, air conditioning equipment, and pools) then it is up to you if you wish to have these inspected. The contract has a negotiated timeframe for you to perform all of your inspections and to negotiate any repairs, so it is in your best interest to start your due diligence as soon as possible.
Once the offer is accepted, your agent will send a copy to the lender. They will start getting the loan ready and will be in touch with you for anything they need. During this time period, it is IMPERATIVE that you do not open up new credit cards, even store ones, or take on any additional liabilities such as a car lease. These could have a significant impact on your credit worthiness and how much a bank is willing to lend to you and may cost you the loan! Wait until after you have closed on the house to do these.
During this step an appraiser will be contacted to give a valuation of the house. This is not a determination of the worth of the house, that you and the seller decided, but on what the bank is willing to lend you for its purchase. This is a complex and involved process and appraisals don't always come in, especially in rapidly appreciating markets. The amount of money you put down for the purchase of the house also has an impact at this stage. The more you finance (less you put down) the higher the house has to appraise for. If you are doing a zero down loan, it may be harder to appraise than a 20% or 40% down loan.
Once the lender is ready to fund your loan they will send over paperwork that must be notarized. You can use any notary you like to perform this, however escrow will be able to provide you with a listing of ones that specialize in loan paperwork. You may go into the escrow office to notarize, or they can send a traveling notary to you.
Once you have a commitment from the lender and your closing date is near, it is time to put the utilities into your name, hire a moving company, and get ready to enjoy your new home!
The actual closing process works differently across the country, but in California the escrow company will receive all of the funds and release the house to title to record. Title will go to the County Recorder's office and file the neccessary paperwork, the Grant Deed, to put the house into your name. Once this has been done title will give confirmation to escrow and you officially own the home! Congratulations are now in order!
