Buying a home in California can be an exciting, but intimidating process. If you are a first-time homebuyer, terms like mortgage insurance, counter offer and escrow can be enough to make you reconsider the upside of apartment living. 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.
1. Assess Your Needs Help prepare yourself for a positive experience in California real estate 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. The experts at Royalls Real Estate report that a mortgage payment should not be more that one third of your monthly net income. If the cost of your ideal home exceeds your financial reality, adjust your expectations and begin the homebuying process with realistic goals.
2. 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. She 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 a home. Prequalification can increase a buyer’s chances of having his offer accepted during negotiations.
3. House Hunting 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.
4. 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 such as that the title to the home must be clear and the home must pass inspection by a licensed inspector. Your real estate expert will assist you in making the most reasonable offer, based on his knowledge of the current California real estate market.
5. Negotiating It is common to receive a counter offer from the buyer, sometimes asking for a higher price or a division of the closing costs that is more favorable to the seller. At that point a buyer can accept the counter offer, submit a counter offer of her own or reject the counter offer at no penalty and continue house hunting.
6. Get Insurance 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, consider paying extra for a policy that will also cover earthquake damage. If you do not already have an insurance provider, your realty expert or loan agent can refer you to local agents.
7. Closing Closing is often referred to as “escrow” in California. The typical period for escrow is 30 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.