908 Melbury Court Redlands, CA

What to expect when buying a home

Owning a home is a big part of the age-old American Dream. Not only does it give you a place to call your own, but you can customize your dwelling to represent your family’s personality.

Several studies conducted by the National Association of Realtors have shown that 87% of a random sampling have listed “homeownership” as the number one criterion that defines “the good life.” This means that for most people, the single largest purchase of their lives will be their home—which is why selecting the right house and getting the right mortgage loan requires careful thought, reliable information, and diligent follow-through.

The Home Buying Process

Location and Pricing Research
You probably have an idea of what kind of home you want for yourself and your family. But depending on the area you are choosing to buy in, you may need to balance what you want with what you can afford.

The best way to figure out reasonable goals for home buying is to simply look around. Look at local listings to find the price ranges in the area. Look for patterns to see which sets of amenities and features correlate with a certain price range.

This way, when you begin to work with your realtor, both of you will be well informed with what type of home you want to purchase.

Loan Qualification
Don’t wait until you’ve found a house to start looking at financing! Your entire home buying process will go much more smoothly if you have begun the loan qualification process early. Start setting aside paperwork of your bank accounts, investments, paycheck stubs, tax returns and other financial information as your loan officer will soon be requesting these.

You’ve done your research on the homes in your new area, so once you get a feel for the price range you can afford and that works best with your needs (and remember to think a few years ahead!), find a loan officer you trust to help you get pre-qualified for the right kind of mortgage loan. Then, when you find a house that fits, you will already be able to disclose to the seller that you can afford this home and that you are well within the loan approval process.

This is especially crucial if the home buying market is competitive. Pre-qualification can help buyers stand out to sellers.

Finding the Right Home
You may now have a short list of properties that you can afford and that will fit your needs. When you’re ready to make an offer, your realtor will help you put together the terms that work best for your family and then present the offer to the seller’s realtor.

Presentation and Negotiation
As an offer is made, be prepared to give “earnest money,” a deposit set aside that is typically 1-3% of a home’s purchase price. (This will later be applied to your down payment.)

The seller may or may not accept your first offer. But don’t worry—this is a common step in the negotiation process. Realtors are used to negotiating and should be looking out for your best interests. The seller may present a counter offer, or simply ask you to make a new offer. Whatever the case, your realtor can guide you through these proceedings.

bruce herwig photo redlandsEscrow is Opened
After an offer is accepted, it is now time to deposit the “earnest money” into escrow. There will also be several documents to sign for both seller and buyer. These documents will be held in escrow until the closing date of the home sale, which is the estimated time it will take for all requirements of buyer and seller are met.

During this time, you may also be exploring home warranty options and signing documents for the title company.

Loan Approval
You may still be working within the approval process for your mortgage loan. Loan underwriters need a paper trail for several different types of transactions, so you may have additional requests to fulfill before your loan is fully approved.

Homeowner’s Insurance
If you don’t already have homeowner’s insurance, you will need to obtain a quote from your preference of insurance company. If you don’t already have a preference, your realtor will likely be able to recommend good insurance agents to get you some quotes to compare.

Whichever insurance company or agent you choose, the policy will need to be in effect at the close of escrow.

Closing
After papers are signed and your loan approved, you will begin the closing process by providing your down payment as agreed upon by the terms of the loan. You will deposit this payment into escrow, and the lender will send the balance of the purchase price to the title company. The deed is then recorded with the County Recorder’s office, and then it’s official!

The seller hands you the keys, and the home is yours!

Note: The above is general information only. This information is gleaned from RE/MAX Redlands. Your situation may differ. You may contact me below for details about your specific situation.