Home Buying Process

The home buying process is laid out here for you as a guide.  I will be helping you however each step of the way so we can successfully get you in your dream home soon!

 Step 1. Set Your Budget.  Figure out what you want to spend at the end of the month including your principal mortgage amount, property taxes, homeowners insurance, homeowner’s association dues (HOA) if applicable.  This amount may be different than what a lender may say you can afford.  This amount you come up with is based on what you are comfortable spending and still allow you to take care of other expenses and include a little fun too!

Step 2. Get Pre-Approved.  The first thing you need to find out is what a lender is able to qualify you based on your financials and statements.  A mortgage broker will require certain information such as bank statements, employment verification and other items they feel will be helpful.  We will need to include your pre-approval letter when we submit an offer so it is very important to have a “current” letter for the amount we are writing the offer for.

Step 3. Make A Priority List.  I have a very helpful process I do to help buyers uncover their priority list in their next home.  It is not always easy to figure out what are your “must have’s” and your “live withouts”.  Before I go through this process with you, my suggestion is to evaluate your top 5 items you feel you would like and rank them.  Remember, buying a house is a process of elimination more than selection.  So, as you are making a list keep in mind you will need to balance what is important.  There will not be a perfect home, sorry but it is true.  You will have to determine based on your top 5 items what you must have and what you can compromise on.

Step 4. Start Looking At Homes! Notice that looking at homes did not come up until step 4!  I know this is the fun part but without the first steps we can not get you into a home successfully.  Realize there are some homes I’ll ask that you just drive by since they may not be everything you are looking for. Other homes that meet a lot of your criteria and other homes we will make sure we get you into right away. Those are the homes that meet your top 5 items!  Relax and have fun with this.  It is my job to keep us focused on your goals and to find you a home you can love.

Step 5. Once We Are In Escrow.  While you are celebrating we still have work to do so let’s get started! Escrow will be opened and you will need to get a deposit to the title company via check or wire transfer.  The title/escrow company is designed to be a neutral party to the transaction.  You can discuss any title company questions such as how to hold title in your new home, title insurance questions or how money will be moved into the escrow account. Get started with your lender and give them everything they ask you for and as soon as possible.  We are working against a clock at this point to stay true to the contract and make sure we close escrow on time.  The lender will also need to order the appraisal too.  I will be communicating with your lender also so we stay on track.

Step 6. Disclosures and Inspections.  The seller will be providing us disclosures within 7 days of our accepted contract.  A typical inspection and disclosure time frame is done within 17 days of acceptance however everything is negotiable and we may have set it for a different number of days.  This is our time to review all the items given to us and start asking questions.  We will also be conducting any inspections we feel we want to order.  It is recommended that you at least have a professional pest inspection ( which looks for pests and any wood rot damage) done on the home.  You may have heard of the term Section 1 or Section 2 work.  This refers to the follow:  Section 1 is “active” infestation of pests or “current” wood rot damage.  Section 2 are items that could “lead to” wood rot damage or items that could “lead to” pest infestation.  Sometimes the seller will have already done a pest inspection and if that is the case you can still order your own or use theirs.  In addition, a professional home inspection is highly recommended to learn more about the workings of the house.  Here we want to see what may or may not be working such as plumbing, electrical, HVAC, roof etc… and to also find out how the home functions.  It is your right and its encouraged to do any inspections your feel necessary.  Any items found on the home inspection may require further inspection which may make sense.  It is after we do all of our inspections and review all of the disclosures that we may choose to write a “Request For Repair”.  California is an “as is” state.  Meaning you are purchasing a home from the seller in it’s current state.  However, if there is a health and safety issue we may want to write a Request For Repair to ask the seller to fix it.

Step 7. Removal Of Some Contingencies.  Once all the disclosures, inspections have been reviewed and any items (if applicable) have been negotiated on a Request For Repair we are ready to remove our inspection and disclosure contingencies.  There are other contingencies that we will also need to address and removed such as: Preliminary Title Report, Natural Hazard Report, HOA Documents, CCR’s and Appraisal.  While we are in the disclosure and inspection period, all of the above mentioned items will also be given to you for review.  Once you have see all of those documents we are prepared to remove all of those contingencies as well.  What is left is basically your loan contingency and that is not removed until your lender tells us the lender has given us formal loan approval.

Step 8. Removal Of ALL Contingencies.  This is the final step in our investigation period.  Once your lender has given us “formal” loan approval (which means they do not have any other conditions in under-writing to meet and the lender is ready to give you the money) we are ready to remove ALL contingencies.  This is the point that you are fully committed to purchasing the house.  This is also the point where your deposit may be in jeopardy if you were to back out of the contract. This is the most important stage of the escrow process.

Step 9. Signing Off and Recording Title.  Signing off at the title/escrow company is when you meet to sign all your loan documents.  It is at this time you will be depositing your down payment plus closing costs into the escrow account.  You can wire the money into escrow or give them a cashier’s check. The amount you will owe is noted on your Estimated Closing Statement given to you by the escrow company.  You will need to bring your driver’s license and your patience.  There is a lot of paperwork if you have a loan.  Once you have completed the paperwork, the title company sends your loan package back to the lender for processing.  Depending on the lender and time of the day you do your sign off this can happen within 24-48 hours.  Once the money has been transferred from the lender into the escrow account we are set to record title at the county recorder’s office.  This can happen within a day and once it is recorded the home is officially yours and you get the keys!!