Step 1. Organize and Understand Your Finances
Get organized…understand where you are at financially. A credit report is an overview of how you manage your finances. A prospective home owner must know what their credit reports say about their financial history before applying for a mortgage. Credit reports play an imperative role in the mortgage approval process and in determining the interest rate and other loan terms that a lender offers you. Educate yourself on credit reports and how credit scores are calculated http://www.myfico.com.
It might suprise you to learn that errors are common in credit reports…so review yours. For a free credit report follow this link…http://www.freecreditreport.com.
Step 2. Familiarize Yourself with the Mortgage Industry
Finding a proper loan and lender is detrimental to your home buying success. The prospective buyer must determine which lender is best for their particular needs. It is always smart to educate yourself about the loan process before speaking with a lender. Questions such as what type of loan are you eligible for, etc. can be answerd here Educate Yourself and through other reading and online material. You should also get at least one competing mortgage offer from a major industry player.
Step 3. Getting Pre-Approved for a Mortgage
First things first… what kind of property do you want to buy and how much you can afford to pay in monthly installments. Try using an online mortgage calculator, just remember it will only be an estimate, not an actual pre-approval amount. Why do you want to get pre-approved? You want to be pre-approved for a loan before hand because if you were making an offer on your dream home and the seller recieves a similar offer in the same day from people who are pre-approved and ready to move forward…who wins?
Step 4. Determine What You Want, Need, and Must-Have
Buying a home does not have to be as difficult as you might think. The process will be easier if you get familiar with the San Diego Real Estate market and narrow down your wants, needs, and must-haves before you start physically visiting houses. Here at 92101 Urban Living, we offer a full consultation and Downtown San Diego tour to assist you in this process 92101 Urban Living
Step 5. Find the Right Real Estate Agent or Realtor for You
Narrow the field. If you are interested in a certain area of your city, find out who the real estate experts are in that area of town. They will be better informed when specializing in a specific area. The 92101 Urban Living Team are Downtown San Diego specialists so you cant go wrong with one of our experienced professionals!
Step 6. Start the Search for Your Dream Home
Your agent (hopefully us!) will go over all applicable listings. The 92101 Urban Living Team goes over and beyond by providing an initial consultation, a tour of Downtown San Diego neighborhoods, and a thorough and skillful search. Surf the web… For example 92101 Urban Living website offers all MLS listings on the downtown San Diego market. As you shop for homes, keep in mind what you do and don’t like…and always communicate those feelings to your agent. Its your home.be expressive. Don’t let cosmetic or minor remodeling problems discourage you. Many remodeling jobs add incredible value to a home.
Step 7. Considerations, Pre-Offer Issues
Deciding whether or not you want to buy a home involves an evaluation of its structure and its features and more. Possible resale value? Existing and future developments in the area? The age of the building? HOA dues? 92101 agents educate on all of these issues.
Step 8. Make an Offer
When you find the home you want, your agent will write a purchase contract commonly known as an offer. Your offer will display what you are willing to pay for and what you are not, when you want to close, and when you want to take possession of the home. Your offer will be made after inspections. If the inspection reveals a problem, you and the seller can renegotiate the purchase price if you are still interested in buying the property.
Step 9. Putting Down Earnest Money
When you make your initial offer, you should also include an earnest money check. Earnest money is a ‘good faith’ deposit that shows a seller that you are submitting a serious offer. (Generally 1-3% of total loan amount) The check is then deposited into an escrow account by a closing attorney or real estate broker and is held in trust until either closing or the check is returned to the buyer. If you purchase the property, the full amount of the earnest money check is applied to your standard closing costs. If you decided not to buy the property in question, the check is returned to you if you fulfill the contract in full and both you and the seller agree that your negotiations are at an end.
Step 10. Counter Offers
The first offer you make most likely will not be accepted as is (especially with a low offer) and the seller will submit a counter offer. There is a timeframe in which each party must respond to the original offer and all suceeding counter offers. You will need to remain available to your agent. There can be several rounds of counter offers, but it usually does not a terribly long time.
Step 11. Home Inspections and Other Tests
Home Inspections are generally completed within 17 days of the acceptance of an offer in a normal contract. The inspection can reveal some problems. If so, these are problems that must be fixed or the home cannot be sold. The seller then has to arrange to pay for the repairs, or have the repairs paid out of the contract proceeds at close. Before you can truly set the closing date, the repairs have to be made and approved by the buyer.
Step 12. Final Contract
As soon as the seller agrees to the final contract, you should start following through on your loan. Get the final contract to the lender to start the loan process in earnest. If you have been pre-approved, much of the work has already been done and your loan will process more quickly.
Step 13. Home Apraissal by Your Lender
The lender arranges to have the home appraised, which can affect whether the loan is granted. The likelihood, however, of a home selling for more than a lender is willing to lend is very slim in this market. The real estate industry not only keeps up with how quickly homes sell, but how much they sell for in an area. Most lenders will have a ceiling on the price per square foot per home they will lend. If a home is overpriced, it will quickly be obvious. You can then go back to the seller and renegotiate a lower price.
Step 14. Avoid Last Minute Problems
At this point, as you are nearing closure, everyone involved in your real estate transaction should check its progress. This is an important factor to remember because if there is a problem, it’ll be caught immediately. Remeber some do’s and don’ts as well: do not make any major purchases until your home closes; do not change jobs unless it is absolutely necessary; do not let your emotions take over; and do not panic if your appraisal comes in lower than expected. Remember, if a problem arises, your agent has probably seen and dealt with it before, they are there every step of the way to coach and guide you towards a rewarding transaction.
Step 15. Closing and Taking Possession of Your Home
You are on your way to closing, the event that transfers ownership of the property to you. Until closing, and even during closing, anything can happen. You might find out that your closing costs are higher than you thought because some additional service fees have been added by your lender. A glitch could come out in your credit report that delays the sale; a problem the owner was supposed to fix wasn’t repaired in time; the homeowner can decide that she or he doesn’t want to pay for the home warranty after all; the appraisal may come in the day before closing and be short of the asking price of the home. If so, the buyer, seller, and their agents have to figure out how to make up for the shortfall. How will last-minute problems be handled? Again, this is where an experienced agent can really help!
It’s all over. All of the papers are signed. The home is yours. Congratulations, here are your new keys!!