Buying a home in California
Buying a home in California can be an exciting, but intimidating process. However, with a little preparation and experienced professionals at your side, you can glide through the steps of buying a home in California with confidence.
Assess Your Needs
Prepare yourself for a positive home buying experience by making a list of items you need and want in a home, such as which neighborhood you want to live in, the size of the home and any amenities. Look through the realty section of the newspaper and find out what the average cost of your ideal home is, then estimate the mortgage payment. Real Estate Broker’s, such as myself, report that a mortgage payment should not be more than one third of your monthly net income. If the cost of your ideal home exceeds your financial reality, adjust your expectations and begin the home buying process with realistic goals.
Consult the Experts
Speaking with a real estate and/or mortgage loan professional right away can save you time and frustration. A knowledgeable professional can give you current information on the California real estate market and answer any questions you have. He can also assist you in the process of prequalifying for a home loan. Homebuyers who have prequalified know exactly how much money they will be able to borrow for a home and are backed by the “cash” a Lender is willing to provide as a loan. Prequalification is a minimum requirement in today’s market and preapproval should be in place to increase a buyer’s chances of having his offer accepted during negotiations.
Touring houses for sale is one of the most enjoyable steps in buying a home. With the help of your realty expert you can save time by limiting your search to homes that meet your financial and personal criteria.
Make an Offer
In California, making an offer on a home does not automatically obligate a buyer to purchase. Included in the offer are contingencies that protect your interests. Such as that the title to the home must be clear, the home must pass inspection by a licensed inspector and a myriad of required disclosures from the seller which provide recessionary rights. Your real estate expert will assist you in making the most reasonable offer and insuring all contractual contingencies are met on time including obtaining all the seller disclosures. It is vitally important to work with a Broker who is experienced in all the nuances of the transaction as well as the specific disclosures for the area you are purchasing in.
It is common to receive a counter offer from the seller, sometimes asking for a higher price or a division of the closing costs that is more favorable to the seller. Today we see multiple offers on homes and counter offers are very likely. When the inventory is such that multiple offers are a regular occurrence buyers should be ready to provide the best offer they can that entices the seller to work with them. The ultimate goal is to get the property under contract to gain control and determine if it is the home for you. If for some reason it does not fit your needs then you can cancel the contract, get your deposit back and move on to another opportunity.
Before you will be allowed to close the loan and officially take ownership of your new home, you will have to buy homeowner’s insurance. A typical home insurance policy protects against theft, fire and liability, but if you live in an area of California prone to earthquakes, the lender will require a policy that will also cover earthquake damage. If you do not already have an insurance provider, your Broker can refer you to local agents.
Closing is often referred to as “escrow” in California. The typical period for escrow is 30 – 45 days; however, you may have agreed to a shorter or longer escrow period during negotiations. During escrow the transaction process becomes finalized. Title records are checked for errors, taxes and other claims must be settled, loan and title documents are signed and the buyer is allowed a final walk through to make sure the condition of the property has not changed. After all the necessary paperwork is signed and filed and escrow has closed, the new owners receive the keys to their new home and are free to move in.
Article Provided By:
Jim Dolan, CBL#01137565
San Diego Real Estate Broker
Serving San Diego County since 1991