Process of buying a Home
Before you buy a home there are a few important things to consider. Ask yourself the following questions:
- Why do you want to move? What are you trying to achieve, is this a relocation, are you trying to move closer to work, etc.?
- How soon do you want to move? Timing can be crucial.
- How long will you be living in your new home? This is very important when making the decision to purchase a home; especially in todays market. Longer is better.
- What’s better for your situation, buying or renting? You may be better off renting and saving for a while longer depending on your situation.
If you’d like to discuss some of these points with me, I’ll be happy to meet with you and help you decide is buying is right for you.
Analyze your needs:
Once you’re sure that home ownership is right for you, we will meet to discuss your current situation in detail. Buying a home is a process; you quickly learn what are really "needs" and what are just "wants"; what desires are negotiable, and which ones are not? It is also important to determine how much do you want to invest in a home? A lender can help you to determine that more clearly. You should also take a glimpse into your future: will you be adding a new baby or are you "empty nesters"? Are you retiring soon or facing other lifestyle changes? Another important factor is "location, location, location"! Do you have your heart set on a particular location? Do you have a commute to think about? What about schools, is there a school district would you like to be in? All of these factors help me to understand your goals so that I can better help you achieve them.
As a buyer, it is essential to meet with a lender to discuss what is right for you. Not knowing how much you can afford before starting your home search is like flying blind. In this competitive market, where everyone wants a deal, you will need to be preapproved by a lender before submitting an offer. Most sellers require this upon submitting an offer. A lender will guide you through the preapproval process as well as the loan process. We work with a variety of professional lenders and would be happy to give you a referral from our preferred vendor list.
A home search can be overwhelming to buyers. There are short sales, short sale contingents, REO or bank owned properties; it can be confusing. I encourage buyers to ask questions. I also have a list of terms defined on this site as well as to help buyers to better navigate through their search.
As I have mentioned, along with being overwhelming, this market is also competitive so timing is everything! It is my job to stay on top of the game! We are seeing homes disappear with multiple offers within days of them hitting the Multiple Listing Service (MLS). My job is to set buyers up with an automated search in the MLS using desired criteria. It is crucial that there are not too many restrictions just to be sure nothing gets missed. I will check in on MLS several times a day to see if anything new has listed – I am always as ready as my buyers are!
Making an Offer:
Once a buyer has found a home they feel is right for them, it is my job to help them draft and submit an offer. I tell all of my clients to treat every offer as if it is the home they WILL live in. A real estate contract is never to be taken lightly and it is important that buyers feel committed to the home they are pursuing. I also tell my clients to expect to write more than one offer; in this market, it is very competitive so it isn’t uncommon to lose out to multiple offers.
Getting a Home in Escrow:
Escrow opens when the buyer and seller sign a sales contract, commonly called a real estate purchase agreement and receipt of deposit (here in Northern California this is usually 1%-3% of the purchase price). The contract, along with any additional instructions, serves as instructions for the escrow officer.
Escrow assures that the lender releases the home purchase funds at or about the same time that the deed is recorded to reflect new ownership. Escrow includes depositing, with a neutral third party, funds, documents and instructions necessary to complete the transfer
The escrow process is usually between 30-45 days with the first 17 days being the “contingency period”; this means that the first 17 days are spent doing inspections, getting an appraisal and getting the loan approved. Essentially, the deal is “contingent” upon the buyer being satisfied with their inspections.
Inspections and Disclosures:
It is always important for buyers to have their potential home inspected. It is also important to hire a reputable, qualified home inspector so as a buyer be sure to call around and interview different inspectors. Buyers may also want to consider hiring a “pest inspector” (a termite and wood destroying insect (WDI) inspector) to check out the home for any existing or latent problems. We have a list of qualified inspectors and we are happy to recommend a few to choose from. It is my job to guide buyers through this process and be there for all inspections. It is also important for buyers to attend inspections as well as to learn about the home.
Inspections are never limited to hiring a home inspector or a pest inspector. As a buyer’s agent, I review all the seller’s disclosures and reports with buyers. There will be reports that will reveal the area’s natural hazards (if any) and certain zoning disclosures as well as the annual taxes. There will also be a report that tells buyers about any items that have affected the title of the property; this is called the preliminary title report.
Aside from the reports, it is always good for buyers to do their own inspections as well. This includes but is not limited to looking up public information about the neighborhood the home is in. Here is a list of some other important items to look into:
- Is the home insurable? If so, how much will it cost?
- How much are the utilities going to be?
- Talk to the neighbors and ask about crime or noise factors in the area.
- If there is a school you want your children to attend, is there an opening at that school?
- Visit the home and neighborhood at different times of the day to see if there are any changes.
- Any other personal factors that may affect a buyer’s overall enjoyment of the property.
After the Inspections:
Once a buyer has performed all the necessary inspections, it is up to them to decide if they want to move forward and remove their contingencies. If major issues come up during inspections and the buyer feels certain repairs are imperative before they buy the home, it is my job to help them to make an appropriate evaluation. Since each escrow is unique and not all sellers are open to or even able to honor repair request or resolution to problems, a solution that may be the most appropriate for one escrow may not be the best resolve for another. Especially in a marketplace where there are many distressed sales; it is crucial to head these problems off at the pass and be as proactive as possible.
After the 17 Days:
Once the 17 days is up, the contingencies are removed; this is a very important part of the process. Between day 17-45 there is a lot going on behind the scenes and hopefully buyers are just busy packing.
This is where a buyer’s lender plays a critical role in the process. It is their job to tie up all the loose ends for the loan approval, meet the conditions the underwriters may have set forth and to get the loan documents to title.
Within the final days, the documents make there way to title and the then the escrow and title officers put together a final settlement statement for the buyer. It is my job to review this statement and be sure the numbers look right. It is at that point where the buyer will make an appointment to sign their loan documents.
Unfortunately, it is nothing like it is on TV – a buyer is not handed their keys over the signing table…no, instead, the waiting is the hardest part! Once the documents are signed buyers can wait up to a week for the house to close escrow. This is because after signing, the file goes back to the lender’s underwriting department for final review and then the file can be “released for funding”. Once the loan is funded it can be “released to record” and depending on the county, that can take a day as well. The good news is that once I hear the home is “on record”, I can hand a buyer their keys…that is the best feeling in the world for me as well as for my buyers! Congratulations….!
2050 Concourse Drive Suite 98
Office: (408) 573-1100