WANTS, NEEDS & AFFORDABILITY
Before starting your search, get pre-qualified for a loan. This is an informal interview with a loan agent. The loan agent reviews the information you provide, and can help you establish price parameters.
Pre-qualification is different from pre-approval. In a pre-approval, the loan agent makes an actual verification of your income, assets and creditworthiness. To get pre-approved, you must provide your mortgage broker with information for a detailed background and financial review including tax returns, credit check and income history. You'll then get a letter from the lender stating the amount of your pre-approved loan. This commitment is usually valid for about 60 days.
In evaluating your budget, know what you can spend on a down payment as well as monthly expenditures like maintenance or HOA fees, real estate taxes, monthly mortgage, utilities, parking, etc.
Purchasing a home is exciting but there's a lot to consider and can seem overwhelming. Once you have narrowed down your price range, take time to define your other search parameters like location preference, type of ownership (condo, townhouse, detached home, duplex, etc.), size of property and building amenities, if applicable. Prioritize your needs (i.e., space, light, atmosphere, schools, commute to work, etc.) but try to be flexible.
Find the right real estate agent to help navigate you through the process, speak with a mortgage lender to obtain written pre-approval for a loan once you have started to narrow down your wants, needs and affordability.
OPEN HOUSES
Open houses are held to showcase a home for sale to the public and are visited by serious buyers, browsers and neighbors. Some are very crowded while others are more intimate. The real estate agent hosting the open house should have prepared information on the property and be available to answer any questions. This is a great opportunity to view the home without pressure. Try to look beyond the owner’s décor if it’s not your taste because the home could still have great potential.
Many homes are now professionally staged, so you can also get an idea of the ideal use of the spaces within the home.
If you want information on history, comparables, upgrades or other specifics, don’t be afraid to ask the seller’s agent. And if you’re interested in a private showing, make an appointment to come back at a different time of day then the open house, if possible.
ADDITIONAL INFORMATION |
IMPORTANCE OF AN ACCURATE CMA
To determine an accurate measure of home value, we can supply you with a comparative market analysis (CMA), which provides information on recent selling prices of similar properties in the same marketplace.
CMAs also include information about area homes that failed to sell in recent months along with their listing prices.
MUTIPLE OFFER SITUATION
Currently, with inventory being low, it is common for a buyer to deal with a multiple offer situation. There are some things you can do to make your offer more appealing like offering your best price, a large downpayment, longer or shorter escrow period and non-price concessions. Be sure that your agent delivers the offer before the deadline set by the listing agent.
CONTINGENCY CLAUSE
A contingency clause in a purchase contract is a clause that states a specific condition that must be met before the purchase of the property can be finalized.
Contingencies are common in real estate purchase contracts. The standard California real estate purchase contract provides for a 17 day contingency period. The buyer and seller can set a different amount of time by mutual written agreement.
The standard California real estate purchase contract also requires contingencies to be removed in writing. If the buyer does not remove them in writing within the required time period, the seller may then make a written demand on the buyer to perform and vice versa.
When purchasing a distressed property, contingencies are not generally accepted, as the property is sold “as is”. In those cases, we will discuss the options that are available to protect you prior to making an offer.
Professional Inspection Process
The mutual written acceptance of the final offer initiates the inspection period. The default time period in California's purchase contract is 17 days; although the parties may agree to a longer or shorter inspection period by mutual written agreement.
Be prepared to attend the inspection which could take 3 or 4 hours, or more, depending upon the size and condition of the home.
Make a list of anything you noticed during previous visits to the home that you want to ask the inspector about. Bring a camera or use your cell phone to make a visual record of any particular conditions the inspector points out. Most inspection reports will include photos taken by the inspector, but it is also useful to have your own photos for reference.
In addition to the general inspection, some buyers also obtain inspections by specialists for foundation, chimney, sewer line and a geological review.
If defects are discovered in the inspection process, you can choose to accept the property “as is”, or you can request that the seller make repairs or financial concessions, or you can choose to cancel the purchase. This must be done in writing, within the agreed time period.