Whether This Is The First Time Or The One Hundredth Time Purchasing A Home, You Have Come To The Right Place!
Getting Started!
Depending on which type of buyer you are, the process is a little different for each category. In most cases, you will need to speak with a lender (unless you are paying cash) to see how much money you are able to borrow as a mortgage. This is based on your current income, credit scores, and outstanding debts. Speaking with a lender will also help you decide which type of loan you want to get (FHA, VA, Conventional), and the lender will help explain which loan will work best for you.
Once you know how much you can afford, keep in mind that what you can afford and what you want to afford are usually two totally different things.
One EXTREMELY Important Warning
Once you have been approved for your loan to purchase your home, DO NOT open any new credit cards or get a loan of any kind. Do not make any big purchases (appliances, furniture, etc…) without first consulting your lender. The same goes for CLOSING any accounts you have. Opening or Closing any new accounts will have a severe impact on your credit and debt to income ratios. I have seen many people open or close an account during the home buying process, and as a result, they are no longer able to purchase a home.
Picking The Right Property For You
There are a lot of factors to consider when you are narrowing down your search for homes. Below is a list of things to consider when you are looking for a home that will fit your needs:
Price: The number one factor should always be price — you don't want to start looking for homes that are above your comfort level.
Area: After deciding on which price range you are comfortable in, you should then start narrowing down the areas (which neighborhood, city, or part of town) you would like to live in. If you are a move-up buyer, you may decide that the area is the most important factor, then look in that area to see if you are able to afford living there.
Amenities: After price and area it is time to start looking at amenities. How many bedrooms do you want? Do you want to be on a corner lot or cul-de-sac street? Do you want RV access, block wall fencing, a single-story or two-story home, a pool? If you narrow your search down too far, you may want to go back through the amenities list and look at wants versus needs, and decide what features you are willing to do without.
Timing: Depending on how much time you have before you need to make your move, you may want to eliminate viewing certain sale types. A normal time frame to close escrow (after placing, and having an offer accepted on a property) is 30–45 days — this usually varies based on your financing type. A Standard (Equity) Sale is usually a pretty quick process; however, if the seller can't move until a certain date then this may not work for you. Foreclosure and Flip (Investor Owned) properties are a close second for speed and can sometimes close even faster than a standard sale. Short Sales and Probate Sales typically take the longest, but in some cases they can move as quickly as any other sale if they have already been approved.
Once Your Offer Has Been Accepted
This is when the process becomes real to most people. This is where you have to start writing checks and coming out of pocket for inspections such as the home inspection and appraisal. Below is an overview of the life of an escrow — however, every deal is different and some parts of the process are out of our control.
Out of Pocket Expenses: You will need to write a check to the escrow company for the deposit amount we negotiate in our offer with the seller. The deposit is refundable as long as we cancel before we release our contingencies, which typically happens about two weeks after we open escrow. If you choose to do a home inspection (highly recommended) you will need to pay the inspector at the time of inspection — inspections start around $250.00 and prices will vary based on location and size of the home. The cost of the home inspection is not refundable. If you are obtaining a loan you will also need to pay for an appraisal (ordered by your lender), which typically costs around $600.00. The appraisal cost is also not refundable. Then, about a week before we close, you will need to bring in the balance of your down payment and closing costs.
Opening Escrow: Once your offer has been accepted (the seller has signed the offer or counter offer), the contract is sent to a third-party Escrow Company. The escrow company handles all receiving and disbursing of funds, orders a couple of reports, and helps the buyer and seller with completing the appropriate paperwork to transfer ownership and record the information with the County.
Deposit Check: Once the escrow company has received the contract and provided an Escrow Number, you will need to write your deposit check payable to that escrow company for the amount agreed upon in the purchase agreement.
Inspections: We will need to order a home inspection (highly recommended) — if you don't know of any home inspectors we will be happy to provide you with a list of people to choose from. Other inspections would include a roof inspection/certification, septic inspection/certification, termite inspection, heating and air conditioning inspection, pool and spa inspections, etc. You will also want to research public information about the neighborhood, and drive through it at various times of the day and on different days of the week.
Appraisal: As soon as we have the executed contract, we send it to your lender and have them order the appraisal. It usually takes 7–10 days for the appraisal to come back, unless it is a VA appraisal which takes around 15 days. These time frames are subject to change based on the appraiser's schedule, which is why it is so important to get it ordered as soon as possible.
Disclosures: The seller has a list of disclosures they need to complete and provide to us for you to review and sign. The number of forms required will vary depending on the sale type (standard, flip, probate, short sale, foreclosure). If there is a homeowner's association (HOA), Mello-Roos (special tax assessments), or any other material fact affecting the property, the seller will need to disclose that information. We highly recommend getting the Natural Hazards Disclosure Report as well — this report will let you know if the property is located in any Natural Hazard Zone (fire, flood, earthquake zones) that may require additional insurance policies. The seller and escrow company will also provide a preliminary title report showing any items affecting the title such as liens, tax assessments, or pending easements.
Request For Repair: If there are any items we would like the seller to repair (items called out on any inspection or appraisal report), we must submit our request to the seller within 17 days of our offer being accepted. The seller is not obligated to complete any of these repairs, but it is definitely a negotiation point. If we cannot come to an agreement, you are able to cancel the escrow and get your deposit back (as long as everything was completed on time). Usually, however, the seller will complete repairs called out on the appraisal since they need to be completed in order for you to obtain your loan — as long as the costs are not a large dollar amount.
Contingency Removal: This is the turning point of the escrow process. After our 17-day inspection period has ended, the seller may require us to sign a form called the Contingency Removal. This form (in a nutshell) states that we have completed all of our inspections, received the appraisal, reviewed the disclosures, and are completely satisfied with the information we know about the property. By signing this form, your deposit becomes jeopardized if you do not close the escrow. This is a topic best explained in person, and we will be more than happy to discuss it with you at any time.
Signing Loan Documents: This is the last big task for you. Signing your loan documents takes approximately two hours and is the last chance for your payment and loan fees to change (as long as we close escrow on time). This will include your payment amount, a breakdown of the payment, and commits you to pay the mortgage on your new home. Typically, we are able to close escrow within one week of signing the loan documents — some lenders are able to do it quicker.
Final Walk Through: A few days before we close escrow we take one last walkthrough of the house to make sure everything is still as it should be — that the home has not been vandalized, the seller has not removed anything they weren't supposed to, and there are no unexpected damages from issues like a roof leak or plumbing malfunction.
Funding: This is the last event before closing. After your lender reviews the loan documents you signed and confirms everything was done correctly, they will wire their funds to the escrow company. You will also (usually, unless you are obtaining a VA Zero Down Loan) need to bring your closing funds to escrow in the form of a cashier's check — unless you were instructed to provide it when you signed your loan documents.
Closing: Closing typically occurs the next business day after escrow confirms they have received both your closing funds and your lender's funds for the balance of the purchase price. Once the County confirms receipt of the paperwork transferring ownership into your name and records it in the public record, we will be notified that the file has RECORDED! This is when we have the wonderful opportunity to deliver to you the keys to your new home! We often like to celebrate this event by taking your picture in front of the home and giving you a copy to share with your friends.
After Closing
We will stay in touch with you to answer any questions you may have as you go through the process of owning your own home, and provide you with any resources we have to help you with changes or repairs you wish to make.
Our goal is to provide you with such great service, and make the process as easy as possible for you, so that whenever you hear anyone talking about buying or selling a home you tell them that they have to call us because of the great job we did for you.