The Steps to Buying a Home in San Diego Ca...
...Enjoy the journey. You will find the destination puts you "at
home."
It is exciting to know that one of the homes you look at today
will be your home tomorrow!
No one buys a fireplace, a deck or a 2 car garage. They buy love,
security, privacy, and romance. Think about why you want to buy and
imagine yourself in your new home.
Unless you are ready to buy today-don't look at homes today.
Until you are ready to buy, watch ads, drive by, go through open
houses and keep track of the sold prices in the areas that interest
you.
The journey will be both exciting and stressful.
The purchase of a home may be the largest purchase you will ever
make. Don't let anyone "talk you into" a property that doesn't feel
right to you. In my 25+ years in the business, I have never sold a
home. The home sells itself as it speaks to its new owner.
You will know that you are home when you walk in. Let your
feelings rule. You shouldn't be buying specifications. You should be
buying your motivations: comfort, independence, security, future
profits, self fulfillment, pride, social acceptance, convenience,
and feeling of comfort and love. Get in touch with why you want
to buy before you try to decide what you want to buy.
STEPS TO TAKE BEFORE BUYING YOUR FIRST HOME
From Scripps Howard News Service
When buying a house, many people discover they can't afford as much
as they had hoped and past financial sins come back to haunt them.
If you're among those considering a housing purchase this year, here
are some points to consider from the Fannie Mae buying guide,
"Opening the Door to a Home of Your Own";
* If you haven't been working steadily for at least two years, you
may have trouble getting a mortgage unless there's a reasonable
explanation, such as recently finishing school or military service
or seasonal work that leaves a gap in your record. "If you have been
fired for cause such as excessive absences, have long gaps in your
employment record or have dips in your income level that are
difficult to explain, you should probably delay buying a home,"
Fannie Mae says.
* Lenders are wary of people who don't pay their bills on time. Your
record is right there for all to see on national credit reports.
Before you set out to buy a house, clean up your credit record, that
is, establish a two-year record of paying bills on time. You can get
a copy of your credit report from the three national credit
reporting services, The fee is generally $10-20, but call the
toll-free 800 numbers for details. They are Equifax, (800) 685-1111;
Experian, (800) 682-7654; and Trans Union (800) 916-8800.
* For most mortgages, you'll need a down payment of at least 5% of
the purchase price. On a $120,000 mortgage, that would be $6,000.
You also may need several thousand dollars more for closing costs.
* Before you start house hunting, figure out how much you can afford
to pay. As a rule of thumb, count on spending no more than 28% of
your gross (before taxes) monthly income on housing
expenses-principal, interest, insurance and property taxes. All your
monthly debts should come to no more than 36% of your gross income.
DETERMINE WHEN YOU WANT TO BE IN YOUR NEW HOME
If you buy today, you will probably close in 30-45 days from today.
Does this time line fit your projected moving plans?
FIND OUT HOW MUCH YOU SHOULD INVEST IN YOUR PURCHASE
Arrange a counseling session with a competent REALTOR® or a
prequalification appointment with a lender.
TO CHOOSE A LENDER, ask a real estate professional for referrals.
The experienced REALTOR® will have the names of lenders who have
proven themselves regarding service and commitment.
WHAT WOULD YOU LIKE TO BUY?
A. LOCATION, LOCATION, LOCATION.
The three most important elements of your purchase. You can usually
change anything except location. Consider geographic and social
aspects of location.
B. SIZE
Consider the size. If its smaller than you had hoped for, can you
deal with the size or can it be expanded within your budget
parameters?
C. STRUCTURE
Is it sound? Does it need repairs that you can handle? Are the
necessary repairs and upgrades in your budget? Will the necessary
changes be good investments in the event you have to sell later?
D. AMENITIES
Does the property have any or all of the amenities you want? If
missing, are they important. If important and missing, can you fix
it?
WORKING WITH A REALTOR®
Did you know?
Very few homes sell through Open Houses. 1 in 400 homes sell through
classified ads. Only half of the homes for sale are in the ads and
Open Houses.
If you are serious about buying a property, it makes sense to
work with a professional. The professional can make it easier. The
first meeting is important. It is your opportunity to interview and
get acquainted with the REALTOR® and you can help the professional
understand your reasons for buying and the things that are important
to you. Be sure to be candid about your motivations.
WHAT SHOULD YOU EXPECT FROM THE REALTOR®?
1. The REALTOR® will review the properties available and select
those that meet your criteria.
2. The multiple listing service will provide access to most homes on
the market.
3. The REALTOR® will arrange the showings.
4. The REALTOR® will provide property and finance information.
5. The professional will provide upon request enough information
that will help you establish market values.
6. The REALTOR® will prepare your sales contract.
7. The REALTOR® will arrange for the presentation and negotiation
with the seller.
8. The REALTOR® will assist you with financing.
9. The REALTOR® will help you arrange inspections.
10.The REALTOR® will insure all government forms & sellers
disclosures are provided
11. The REALTOR® will follow through and will help take you through
the closing.
HOW MANY REALTORS® SHOULD YOU WORK WITH?
REALTORS® work on commission. The best REALTORS® will only commit to
you if you commit to working with them. The best REALTORS® will
"back-off" if you are working with others. One good REALTOR® will
benefit you by reciprocal loyalty. You will get better service if
the REALTOR® knows you are loyal.
When previewing homes: Be sure to look at the property and not
the condition.
HOUSE HUNTING WITH CHILDREN
From the Orlando Sentinel
* Take special care to talk to your children about the upcoming
move. Deal with their concerns as they come up.
* Leave young children with friends, family or a baby sitter during
the initial house hunt. House hunting is stressful enough and
details of individual houses tend to blur after tours through
several. Fidgety children can complicate matters. Going alone also
will eliminate the potential embarrassment of having to ask the
seller for bathroom privileges for your youngster.
* Include your older children in the house-shopping process as much
as possible. Keep them occupied by letting them plan and pack a box
or two of their special things. Seek their input on new décor and
room design, and what kinds of features they would like to see in a
new house and in the neighborhood. Make sure you inform your
children that just because they would like an indoor Laser Tag arena
that you may not be able to make good on such a request.
* Investigate the community. Track down the children. Locate things
such as recreation centers, churches, movie theaters, etc.
* Once you have selected your dream home, if possible, bring your
children along for a tour of the house and neighborhood. If this is
not possible, take plenty of pictures of your new place, cool
haunts, schools and share them with your kids.
SOME "INSIDER" SECRETS TO GETTING WHAT YOU WANT
1. GET PRE-APPROVED.
To make the strongest offer possible get "pre-approval." The process
takes a few days to a few weeks. With your pre-approval certificate,
it's like taking cash to the seller. If you are competing against
other offers you will have a definite advantage.
2. DAILY SEARCH
When you are serious about buying, find a REALTOR® who is serious
about helping you. Get your agent to do daily MLS searches.
3. SPEED IS IMPORTANT
don't think you can look tomorrow or on the weekend. Look
immediately and be prepared to make you offer on the spot.
4. WRITE A "GOOD" OFFER.
Write your offer to be accepted; not countered. While you are
in-counter, someone else could be buying your home. Negotiation is
only important to you when you get what you want.
5. THE PRICE
Asking price used to be what the seller hoped for. In a "hot"
market, there may be multiple offers. The actual sale price can be
more than asking. If you have done your homework before-hand, you
will feel more secure when negotiating your offer.
6. BEST OFFER
If you are the only offer when you write, other offers may come in
after you have written. Even if you end up in a multiple offer
scenario, the seller may choose your offer, because you started
better than the rest. It's not scientific, but it can work!
7. THE BIG PICTURE
If you get what you want, you are the winner. The couple thousand
dollars you might save could cost you what you really want. When you
move in-you'll look back and congratulate yourself.
NOW, LET'S WRITE AN OFFER
Remember: Once you choose, everyone else in the world will want it,
too.
* Write your highest and best offer. (Across U.S. & Canada, the
average property sells within 97% of asking.)
* It's a "good deal" if you want it and you get it!
* The offer should be drafted carefully. Some guidelines follow:
* WRITE YOUR BEST OFFER Anytime you play "We will start here" you
risk losing the property to another buyer.
* EARNEST MONEY The more earnest money you offer, the more
confidence the seller will have in your commitment to the
transaction.
* INCLUSIONS If you want an item included, it must be stated in the
offer. Whether or not it is shown on an MLS print-out, it isn't
included unless it is stated in the offer.
* TIME IS OF THE ESSENCE This means that the dates are extremely
important. The "next day" isn't good enough! Midnight on the day
named is the "drop dead' deadline. (Watch especially for loan
commitment deadlines.
* OCCUPANCY AFTER CLOSING It is a good idea to offer to allow the
seller at least a few days after closing. That way they aren't
forced to be "on the truck" at the closing. The seller usually
prefers to have money-in-hand before they move their large items.
* INSPECTION - It is not required...but, you would be VERY
FOOLISH not to have your future home go through a
professional inspection PRIOR to the transfer of
title!
* ADDENDUMS - Many companies use their own. Items are covered that
may not be addressed in the offer, i.e. Asbestos, Lead, Lead Based
Paint, Radon, Safe Water, Well and Septic Inspections, Home
Warranties, Code Compliance, Surveys or Boundary Maps, etc.
Whether the seller or the buyer is dealing with the offer, the
choices are the same: "Accept", "Reject", "Counter".
Upon an accepted offer, upwards of 30 people are part of the
transaction. There are lenders, loan officers, appraisers, credit
checkers, inspectors, processors, and more.
If you work with a REALTOR®, follow the steps, do your homework
and provide the information needed by the lender, you will be
comfortable with your decision and should live "happily ever after!"
EXTRA NOTE:
It is important that you don't make any changes between the time you
make an offer and the closing.
Job Change:
Don't make job changes without the blessings of your lender - before
the fact. A "new job" could kill your transaction, affecting the
"time on the job" criteria.
Marital Status:
A divorce can reduce your income. A marriage can change the loan
application. If your new spouse has past credit problems, you will
likely have a problem with credit scoring requirements. As with a
contemplated job change, make no marriage plans without your lenders
blessings. Poor timing could jeopardize your transaction.
Major Purchases:
Buying a car or other major item on credit can significantly change
your debt ratios. Again, no major changes while you're buying a
home.
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