A good buyer’s agent will be your navigator throughout your journey to purchase your dream home. A realtor has a fiduciary and professional responsibility to protect your best interests. Make certain you are comfortable with your choice, as you’ll likely spend a good deal of time together in the coming months.
Ask your agent for a referral to a professional mortgage planner that will assist you in determining what kind of loan is the best fit for you. Ask the lender to give you a loan pre-approval letter, which means your income will be verified and a credit report will need to be run. Decide on your maximum loan amount, but choose only a mortgage type that makes sense for you, and a payment that is manageable.
The estimation of your borrowing power from a lender and can be accomplished with a simple phone call.
The pre-qualification is based on:
1. Income and debt levels that you provide to a lender.
2. Possibly (but not always) a credit check.
A pre-qualification is a determination on whether the prospective loan applicant would likely qualify for credit under a lender’s program and standards, or a determination on the amount of credit the prospective applicant would likely qualify.
A written commitment issued by a lender after a comprehensive analysis of the credit worthiness of the applicant, including verification of income, resources, and other such matters as is typically done as part of a normal credit evaluation program.
Conditioned upon the following:
1. Identification of a suitable property.
2. No material change in the applicant’s financial condition or credit worthiness prior to closing.
3. Limitations not related to the financial condition of Credit worthiness of the applicant that a lender ordinarily attaches to a traditional mortgage application, such as completion of a home inspection, acceptable title insurance binder, certification of clear termite inspections, etc.
The issuance of a pre-approval letter implies that a credit decision has been rendered and a mortgage commitment letter is available which also means that the loan has been submitted to underwriting.
The pre-approval is a more complete and formalized process where the borrower actually meets with the lender and supplies him with the last 2 years income tax returns, bank statements, W2’s, etc. The lender asks about employment and runs a credit report. A pre-approval helps take the guesswork out of buying. There is a firm figure that you, the purchaser and seller can work with in confidence. Securing the commitment from the mortgage company is much closer to reality with a pre-qualification than with a pre-approval – which is of tremendous benefit during deal negotiations. By speaking with a lender, affordability parameters and appropriate loan programs are identified. Details such as the amount of cash required to close are also determined which is essential information for the purchaser of the property.
Narrow your search to those homes that fit your exact parameters to find that perfect home. Consider all homes on the market, including fixer-uppers, foreclosures, short sales and traditional sales. Let your agent know which homes you are interested in viewing and ask for additional information.
We’ve got a few tips and tricks to help you with your home search. Remember that this can be the most fun, looking for homes and you don’t want to miss any opportunities on homes that are not public listings.
Consider writing offers on homes you’d like to purchase. Select an offer price based on the amount you can comfortably afford. Market conditions may call for more or less aggressive offers.
If a seller refuses your initial offer, be prepared for a counter offer. Keep in mind, a seller is not always obligated to respond to an offer. The negotiation will continue until a mutually acceptable price is determined.
When your offer is accepted, you’ll need to deposit your earnest money check to escrow. (California is an escrow state) The offer should have contingencies that will protect your EMD should you decide to cancel the contract.
Our team will open escrow and title through a Transaction Coordinator, but typically, this is completed by the listing agent.
Your Mortgage Professional will require payment for the appraisal of the property. The appraiser’s analysis will determine the value of the home. This value can further determine how our team will negotiate on your behalf. (Should it come in lower than the contracted price, we go to work trying to get you that price!) Remember to ask for a copy of the appraisal.
Your Mortgage professional may require additional information. While in escrow avoid major credit related activities and purchases, as it may affect your loan. When the file is complete, your mortgage professional will submit it for final underwriting approval.
Review disclosures items such as the TDS, Seller Property Questionnaire, natural hazard report, pest inspection / completion and other documents such as a preliminary title policy.Review every document and ask questions about anything you don’t understand.
Find a highly reputable home inspection company to check the home. It’s a good idea to be present during this step.
Should there be issues with the home inspection, such as building code violations, safety hazards etc. You can ask the seller to address the issues prior to the close of escrow, whether it’s through a credit, or repairing the specific issues. Think of this as a wish list, because does not have comply.
A standard default in the California Residential Purchase agreement gives you 17 days to remove contingencies. Be certain that the loan is solid and your appraisal is an acceptable number. After this 17 day period, the seller has the right to issue a notice to perform, meaning they can cancel the contract if you do not adhere to the terms. Only when contingencies are passed and signed off by the buyer, can they call for your Earnest Money Deposit should you wish to cancel.
This step is very important. Inspect the home and make sure any repairs the seller committed to are completed. In short be sure that the home is in the condition you agreed to buy it in.
In San Diego County, as a rule, you’ll sign general escrow documents early into the process; with your loan documents coming near the end of the escrow. You will require valid identification to sign.
Use a certified check making it payable to escrow. Bring a certified check payable to escrow. Expect Escrow companies typically pad the amount required to close, this will be re-funded shortly after. The easiest way to get monies to escrow is through a wire, it’s cheap, and saves you time.