These are some idea/tips for you if you are looking to purchase a home. We know that purchase of any large value item, is not ever an easy decision, but hopefully these steps will help you smoothly through the process of purchasing a home.
Keep in mind, research is key for any large monetary purchase. The internet is your friend. You found our website, and there are many more like it to help you answer your questions. Google your questions. Whatever it takes to get the answer.
Before looking for a home, ask yourself these questions
- Price range - check out some websites to estimate what you are willing to afford. You must know what kind of down payment you have available and what your monthly expenses are. Consider what financial benefits you may receive from purchasing a home. Interest paid for a home loan is tax deductible. However, HOA fees are not. Use this site and enter your income and other parameters to get a rough idea. Click here
- Location - what area is ideal for you? how far do you want to live from work, shopping and other lifestyle activities? schools?
- Size - decide how large your family is and your future family? how many bedrooms do you need?
- Amenities - do you need a garage? yard? swimming pool?
- Length of time - how long do you plan to stay at this home? 5 years? 20 years? how long do you plan to keep the home? rental property?
Once you have answered these questions, there's more questions to be asked, but we'll ask those when we get there.
Real Estage Agent
Find an agent. If you are new to this process, this will be very important. The agent will help you explain the advantages and disadvantages of purchasing a townhouse/condo or a single family home. Keep in mind, even if you had previously purchased a home 10 years ago, the rules of the real estate game have changed since the high rate of homes that are foreclosure property or short sales. An agent who is familiar with these types of sales will be highly beneficial.
Also they know the home values of each area within San Diego. They can assist in giving you the right ideas on budgeting for the right homes. There's really no point into looking at homes that are "out of your league". Make sure to be realistic about your budget. Take into account HOA fees and utilities and insurance and property tax. These are all questions that your real estate agent can help you with obtaining.
A good agent is willing to provide easy to understand knowledge about the home purchasing process. They should never pressure you to act quickly. They should be willing to show you qualified homes within your budget and criteria within a weeks notice. Never decide your interest on a home without looking at the home visually. You need to be in the area and location and within the unit to see the picture. Photographs of the phone online are not always representative of the actual home. Home sizes and specifications can be misleading. For example, the layout of the house.
Financing
When you have found your agent, you'll also need to do your homework regarding a loan. You can use BankRate.com to check out competitive rates. Keep in mind, that not all loans are created equal.
You maybe confused by rates that are approximately 0.5% less than others. They use terms such as 1 pt or 1 point. Some banks will charge you 1 points or 1% of your loan amount, which they refer to buying your loan rate down. This buying points is beneficial if you plan to own your home for extended period. You should speak with a financial adviser or loan officer to determine if that is an optimum option for your financial needs. Ideally it is best to compare rates with 0 point options.
We recommend you find 2-3 different lenders. You do not have to pick a lender until the start of escrow. Ideally, its usually good to start with a bank that you have a checking or savings account with currently. Go to your local branch and speak with a loan officer.
Once you have several lenders selected, start conversations with them regarding getting a pre-qualification letter. This will require some of the documents below provided to the lender.
- Tax W2 forms from the last 2 years
- Most recent pay stubs, typically the last month of pay stubs
- Most recent bank account statements, typically last 2 months
Browsing
Ask the agent to put you on a daily email listing. You will need to provide your agent with the exact criteria you want in a home.
- Price ranges
- Number of bedrooms
- Number of bathrooms
- Square footage
- Condo or single family
- Area - provide zip code or locations where you would like to purchase
After you start looking through listings. Try to be as specific or "picky" about which homes you like. Come up with a list of approximately 5-7 homes that are look like potentials. The reason behind 5-7 homes, is because, usually some of those homes will already have offers or might already be sold. Send this list to your agent and see if she can arrive to show these to you over a weekend. Plan approximately 2-3 hours of time to see 5 homes. Try to see a variety of condo/townhomes and single families, just to allow yourself the chance to see whats out in the market. Some key items to keep away from or keep an eye out for, HOA fee's and other fee's including Mello Roos. Mello Roos fee's are not tax deductible, and they are additional fee's on top of your property taxes.
After your first day of "browsing" for homes, take 30 mins and talk to your agent to review the homes you browsed through. Explain to the agent what you liked and disliked about each home. Try to be specific. A simple, "don't like that home" is not enough. Provide the agent with specifcs like, "the home was not large enough" or "we do not like the layout" or "we don't like the location of the home". Also provide feedback of what you liked about each unit as well.
From these comments, the agent can help you isolate what your looking for and maybe revise the criteria that you provided them before.
Go back home and start the process of looking through listings and take into account the comments and homes you saw from the first browsing day. In the next week or 2, come up with another list of 5-7 homes again. Schedule another browsing day with your agent once you have found some homes that meet your new criteria.
If you still have not found exactly what your looking for, we recommend you take a break from it all. Browsing online and going to homes can be a very tiresome task.
Found it!
After finding a home that you like, double check to make sure you truly like it. Take some time to think of what you have fun from the big picture perspective. Look on Google maps to do research what is surrounding your potential home. Take a quick drive around the area, make sure its easy to get to the freeway, how long it takes to get to your work place. If you have a dog, make sure there's a good place to walk to the dog. Find everything good and bad about it.
After you have done that, there's still more to discover. Take look at the going price for homes surrounding the home. Pull com parables for your potential home.
Keep in mind all the features included with the unit. Is the appliances included? Are all the light fixtures included? All the little things can add up quickly with you need to purchase them yourself. Keep in mind, foreclosures and short-sales often do not include many of the fixtures and appliances. But no fear, you just have to make sure you budget all those things. We will consider those expensives financial obligations that you will need "cash on hand" to purchase.
Refridgerator - $700-1500
Washer and driver $700-1500
Chandelier - $100-250
Make an offer
Now that you have found the good and bad of the home, and you have decided that you truly want this as your home. Its time to sit down and talk with your agent and determine what the home is worth, and what you are willing to pay for it.
Closing
You need to get a spreadsheet from your lender that will show all the loan's closing costs. Make sure you account any HOA fee's and other fee's. You want to make sure you know all the total costs of closing the home. If your lender can not provide you a detailed list of all the fee's, you should find a new lender.
Add up any appliances or fixtures or repairs that maybe needed to get your home into move-in ready condition.