BUYING A HOME

 

STEP 1:  Unless you are paying CASH for your home or property, the first step is to contact a lender and find out how much you qualify for. It doesn't make much sense to go look for a $125,000 home only to find out that your lender will only give you $95,000. Contact several lenders and compare both service and rates. Your current bank or credit union is a good place to start. Be sure to ask for an estimate of their closing fees since some lenders charge more than others. Once you find the lender that's right for you, be sure to obtain a "pre-approval letter". Make a copy of this letter to give to your San Jac Real Estate agent (it's usually sent to you by email as a pdf file)
Tip: have your W-2's, employment history, contact information, credit and banking information, etc. handy when you contact the lender to speed the approval process up. For a list of reputable lenders, contact your San Jac Real Estate agent.

 

STEP 2:  After obtaining your pre-approval letter you're ready to start looking for homes.  You need to get a "Buyer's Agent" who will represent you and assist you in the home buying process. It costs you nothing to choose a buyer's agent (San Jac Real Estate does not charge any fee but some other companies do) and once you've chosen your buyer's agent you can start to look for that perfect home. Your agent will assist you by searching the MLS (multiple listing service) for all available homes that meet your requirements (price, size, area, schools, etc.)  Your agent will also make appointments to view the homes that seem like potential purchase candidates. After you have selected a home, your agent will assist and advise you on how much to offer and will deliver the contract/offer to the seller/seller's agent. Your agent will also assist in negotiating counter-offers from the seller. Once the offer has been accepted and all parties have signed, the contract is binding and is taken to the title company for processing.
Tip: You will be sent new listings by email every time one becomes available. You will look through the available properties online and notify your agent which ones you like and want to go see. It is best to drive by the homes on your own before contacting your agent to see if you really are interested because some homes look great in the photos but when you drive by they don't look so great. Your agent can show you as many as 8 homes in one day and it is best to schedule more than 1 home each time you tour. Give your agent as much notice as possible (preferably 24 hours notice) because it takes a while to schedule the appointments when some sellers or agents are busy and cannot respond right away to the appointment request. Many new buyers get very excited about purchasing their home. Don't tell the sellers that "this is the perfect house and we just have to have it". This could cause the sellers to be less likely to negotiate with you on the price. Allow your agent to do all the talking and negotiating on your behalf. Your agent is trained to do this and work to get you the best deal possible.

 

STEP 3: While the contract is at the Title Company waiting for all of the paperwork needed to sign at the closing you will be conducting inspections on the home to make sure that there are no major problems with the home.  You will need to hire and pay for a home inspector to do an independent home inspection. The home inspector will give you a detailed report (around 10-15 pages) that will show what is wrong with the home.  Usually there will be minor things that can be easily corrected by the seller or yourself, but occasionally there are major items that appear on the report such as foundation cracks, faulty wiring, roof, etc. If a major problem is found you can ask that it be corrected by the seller or you can cancel the contract (sometimes there is a penalty if you cancel after the inspection period known as the option period). You should also have a pest control company inspect for termites which can be treated before the closing. These inspections take place during what is known as the "Option Period". During the option period you can cancel the contract at any time or for any reason and only lose what you spent on the inspections (around $475) and your "Option Fee" (usually around $100). Once the inspections are completed and the Option Period is over your lender will also order an appraisal (around $400 and is sometimes paid upfront) and a survey which will be included in your closing costs.
Tip: Every home, even brand new ones, has faults. Don't get upset when the inspection report shows lots of problems. Discuss each item with your agent who can explain which items are serious issues and must be fixed and which items are minor issues that may be "grandfathered" code issues or small things that can be fixed by you with little effort. Also, when dealing with your lender during this stage of the transaction, it is important to stay in constant contact and make sure that you provide all of the documents and information they ask for in a timely manner, otherwise it could delay or even kill the deal. Don't go out and start opening new credit or make any major purchases at this time either.

 

STEP 4: Once all inspections are completed and cleared and all parties are happy with the condition of the home a closing date will be set.  The Title Company will obtain all of the required documents needed to sign to complete the sales transaction. When they have received all needed documents they will call both the buyer and seller to set a closing date.  It is not necessary that the buyer and seller sign the documents at the same time as long as they both sign the papers. You will receive a "Closing Disclosure" on the closing costs a few days before the closing. This paper will explain all of the costs incurred by you and the seller and will tell you exactly how much money you will need to bring to the closing (cashier's check). You will need to forward a copy of the Closing Disclosure to your agent so that they can review it for accuracy and any errors. Your agent will more than likely attend the closing with you to assist you and answer any questions you may have and assist in case something goes wrong. Once everyone has signed the papers and the lender has wired the money you will become a new homeowner and will receive the keys to your house.
Tip: Be sure to bring your drivers license to the closing, as all documents will need to be notarized. Also, when you get the final closing cost amount from the Title Company, you need to bring certified funds (cashiers check), not a personal check. Also, it is a good idea to do a "walk-through" a few days before the closing to make sure that nothing in the house has changed, is damaged or is missing.

 

BUYER'S AGENCY FLYER                              BUYER'S AGENCY AGREEMENT

 

Frequently Asked Questions By Buyers

Do I have to have good credit to get a loan?  Answer

How much money do I need as a down payment?  Answer

What are closing costs and what is a HUD1? Answer

Are there any programs to assist first time home buyers or lower income buyers?  Answer

Why do I need a buyer's agent? Can't I just call the agent that is on the sign in the yard?  Answer

How can I find homes for sale online?  Answer

Are foreclosure homes a good deal?  Answer

What lender should I use? Are some better than others?  Answer

What should I offer on this home?  Answer

What is mortgage insurance?  Answer

What is a home warranty?  Answer

Do I need flood insurance?  Answer

How much do home inspections cost and what do they cover?  Answer

Why should I use a real estate agent to help me buy a brand new home from a builder?  Answer

Where can I get general information about the buying process? Answer

 

If you have a real estate question, email us at

Dave@SanJacRealEstate.com

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The information contained on this page and website was written and produced by Dave Turnquist and is the sole property of San Jac Real Estate. No unauthorized reproduction or use of this information is permitted without the expressed written consent of Dave Turnquist, Broker/Owner of San Jac Real Estate