If you’ve decided that 2018 is the year you’re going to take the plunge and become a San Diego homeowner, you might be feeling a little overwhelmed You might not know who you need to talk to first or where to start. Taking it step by step will make the experience feel manageable, which is why I created this Total Beginner’s Guide to Buying a Home to serve as your roadmap through the process!
Step 1: Find a Realtor
If you’re just starting to think about buying a home, it may feel like it’s too early to involve a Realtor. Not true! I’m there for my clients throughout the entirety of their home buying journey. Even if you don’t plan to buy for six months to a year, you will likely have a lot of questions I can answer. I can also advise you on certain things you will want to do (or not do) if you are serious about becoming a homeowner in the near future. I can also provide you with referrals for a few reputable lenders.
Step 2: Create Your Home Shopping Wish List
Take some time to sit down with the people who will be involved in the home purchase to create a wish list of things you’re looking for. Typically this will be your partner or spouse. Get everything out on the table: what kind of property you want to buy, the neighborhoods you’re interested in, the number of bedrooms and bathrooms you ideally want, if you want a yard, etc. Then go through your list to separate your wants from your needs. If you get stuck, take a look at my recent blog post for help.
Step 3: Meet With a Lender
Before you start searching for a home, meet with a couple of different lenders to discuss your financial situation and the different programs they offer. You will walk away with a lot of information to mull over so make sure you don’t rush this step. Your lender will also instruct you on what they will need from you in order to get you pre-approved for a loan.
Step 4: Clean Up Your Credit
You’re probably aware that having good credit is an essential part of the mortgage process. Your credit score not only affects your ability to qualify for a loan, it can also help you secure a more favorable rate. You will want to take some time to review your credit report and verify that there are no errors. Make sure there are no incorrectly reported late payments and that the balance on each of your open accounts is correct. You will also want to make sure you’re practicing good credit habits: pay your bills on time, keep balances low, and don’t open a bunch of new credit cards. Avoid making big purchases or purchases that might require a line of credit, like buying a car.
Step 5: Gather Necessary Pre-Approval Documents
Most lenders will want to see quite a few different documents from each person who will be on the loan. Every lender is different, but you should be prepared to present the following:
-Proof of Income in the form of W-2 statements from the last two years, recent pay stubs, proof of any additional
income you receive, and the two most recent years of tax returns
-Proof of Assets in the form of bank statements, investment account statements, and any cash reserves
-Social Security Number
Step 6: Get Pre-Approved For a Loan
Once you’ve selected a lender, you will want to set an appointment to get pre-approved for a mortgage. You will present all the required documents for the lender’s review and they will issue you a pre-approval letter that is normally good for 60-90 days. When you make an offer on a house, the pre-approval letter will be submitted to show that you are a serious, qualified buyer.
Step 7: Search For a Home
Now that you’ve selected a lender, been pre-approved for a loan, and have your home buying wish list together, we can get started on the fun part: shopping for your home! I’ll send you available properties in the MLS that match your criteria and schedule a showing for any that you want to see. I’ll also be networking with other agents to find off-market properties or properties that are not yet listed in the MLS for you to consider. As we view the properties that are for sale, you may want to make changes to your home buying wish list. This is perfectly normal and part of the process! My job is to find you what you’re looking for, no matter how many houses we have to see.
Step 8: Make an Offer
Once you’ve found the one, it’s time to make an offer! I will guide you through this process to craft a strong offer and present it to the seller’s agent. I will negotiate on your behalf and work hard to present you as someone the seller will want to work with. We may go through several counter offers, but if all goes well, we will reach an agreement with the seller and open escrow.
Step 9: Open Escrow
During escrow, the escrow company serves as a neutral third party. Their job is to make sure both sides are satisfying all the terms of the purchase agreement so the property can legally change hands.
Step 10: Inspect Your Purchase
Depending on the terms of the purchase agreement, you will have only a certain number of days to inspect your purchase and request any needed repairs prior to the sale. The two standard inspections most properties go through are the termite inspection and a general home inspection. Additional inspections may be ordered based on their findings or on the unique features of the home. I will help you negotiate any repair requests with the seller.
Step 11: Get Final Mortgage Approval
Before you can close escrow, the lender will need to issue final mortgage approval. It is absolutely crucial that as you go through the escrow process, you don’t do anything that could jeopardize your loan approval. Changing jobs, making expensive purchases, or opening additional lines of credit are all things that can affect your final mortgage approval.
Step 12: Attend the Final Walkthrough
Once the inspections are done, the repairs have been completed, and your mortgage is approved, we will have a final walkthrough. This is your last opportunity to ensure that all repairs have been completed satisfactorily and that there are no new issues with the property. If everything looks good, we’ll continue to the close of escrow.
Step 13: Sign Closing Documents
To officially close escrow, you’ll sign the final documents that are needed to make the property yours.
Step 14: Pick Up Your Keys
With all the conditions of the escrow met, the final documents signed and recorded, and the loan funded, I can deliver the keys to your new home. Congratulations!
If you’re ready to get started on your home buying journey, contact me today! I would love the opportunity to guide you through the process and help you become a homeowner.