Buying a home or investment property is one of the most significant financial decisions a person can make. With an ever-changing real estate market, it is important to have a knowledgeable and local Realtor® guide you through the home-buying process. As a professional Realtor®, I will assist with every step of the home buying process, from screening current properties to negotiating the best deal. While the buyer receives all the benefits of using a local Realtor®, it is the seller who pays our commission!
STEP 1: The first step in buying a home is figuring out how much home you can afford. How much are you able to qualify for? How much can you really afford? There are many lenders available to “pre-approve” you for a loan. I have worked with numerous loan brokers over the years and can help point you in the right direction. In order to qualify for a loan the lender is going to want to know how much money you make and what your credit score is. It is important to know and follow your credit score as this is a big key to qualifying for a loan. There are many great loan programs currently available such as 100% Financing USDA loans as well as FHA and VA loan programs. Here is a list of some local lenders that I have worked with in the past:
KD Capital Mortgage Corporation
1305 Vine Street
Paso Robles, CA 93446-2269
Connect Home Loans
725 Creston Road
Paso Robles, CA 93446
There are also many great traditional lenders such as Wells Fargo and Bank of America, local lender Heritage Oaks Bank, as well as Credit Unions.
STEP 2: Now that you know how much you can afford it is time to start looking! You may already be looking and have the perfect home picked out. If not, you can contact me through email, phone call, or text message to discuss exactly what kind of property you are looking for. I will start sending you properties that match your criteria and you can start narrowing them down to the one that you want to see. You will receive the properties as they become available so you will never miss out on a new listing. If you see a property that you are interested in just let me know and I will take care of making appointments, gathering listing information, etc.
STEP 3: After you find the right home, I will work with you to write an offer to purchase and begin negotiations with the seller. Here are some key items when writing an offer.
Purchase Price – The purchase price is the most significant part of the offer and is largely dependent on market conditions. In a competitive market, buyers may actually offer a purchase price that is higher than the home’s listed price to ensure they get the home. In a slow market, buyers have more leverage and may be able to buy below a home’s list price.
Closing Date – This is the date that the home would officially be purchased by you from the seller. Typically, the closing date is 30-45 days from the day you write the offer to purchase. During that time a number of things happen. You finalize your financing, make arrangements to move, and secure homeowner’s insurance. The seller makes any agreed upon repairs and prepares to move. The escrow company prepares all the paperwork to transfer ownership from the seller to you.
Closing Costs – If the house you select is at the top-end of your budget, you may want to include a request for the seller to pay some or all of the closing costs. Like the purchase price, the request for closing costs and their amount are largely driven by market conditions.
Contingencies – Most offers are written with some contingencies. First, it is standard practice to make a purchase offer contingent upon you obtaining a mortgage. (In the offer to purchase, you list the type and percentage of financing you plan to use.) Next, most offers are contingent upon a satisfactory home inspection and/or certain repairs being done.
Keep in mind that market conditions influence how these items are handled from a buyer’s perspective. If there are a lot of homes on the market, you will have a fair amount of negotiation leverage. However, if there are many buyers and few available homes, you will have less room for negotiation.
STEP 4: Now that you have found a home and agreed on a sales price, we open escrow. Here are a few things that the buyer should expect during the escrow period:
7 Days – Within 7 days of the contract acceptance date the buyer must present a prequalification letter from the lender and, if requested, verification of funds for down payment and closing costs.
7 Days – The seller has 7 days to provide the buyer with all reports and disclosures. The seller* usually pays for the Termite Inspection and “section 1” termite repairs.
*this may not be true when purchasing a foreclosure/REO or a short sale property.
17 Days – The buyer has 17 days to complete all inspections. The buyer usually orders and pays for a home inspection. The buyer needs to approve all disclosures and reports as well as remove all contingencies.
10 Days to Close – Buyer should order homeowners insurance at least 10 days prior to closing.
5 Days to Close – Within 5 days prior to close of escrow the buyer will make a final inspection of the property.
At close of escrow the buyer’s down payment and fees must be paid with a cashier’s check. The escrow company will set the date for the buyers to come to escrow for the signing of all the documents including loan documents. The loan should fund 48 to 72 hours after the signing of the loan documents. Once the loan funds, then it is sent off for recording. Once it record, it is officially your home.
STEP 5: I will hand you the keys to your new home.
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