1. EMPLOY A REAL ESTATE EXPERT. To start the process off right, evaluate seasoned real estate agents in the areas you are interested to live in. At Taylor
Taylor Street’s 9 Home Buying Steps
Dated: February 20 2020
1. EMPLOY A REAL ESTATE EXPERT. To start the process off right, evaluate seasoned real estate agents in the areas you are interested to live in. At Taylor Street, our agents are market experts with decades of collective real estate knowledge and firm negotiating skills. Our experienced advisors will spend the time to understand your housing needs, develop and implement an individualized housing purchase plan, and continue to advise you throughout the whole process. We live by the words: “A goal without a plan is just a wish” (Antoine de Saint-Exupéry).
2. SHOP AROUND FOR A MORTGAGE. As referenced in our financing section, whether you use our recommended lenders, mortgage brokers, and bankers or select your own, spend the time to research for yourself. After studying lenders, programs, terms, and interest rates from a variety of sources, pick one that best suits you and your financial position.
3. PREQUALIFY FOR A LOAN. Once you select a lender and loan program that best fits you, go through the process and get prequalified for a mortgage. This is a highly important step due to the fact that sellers and their agents currently require that a buyer be prequalified prior to making an offer. This communicates that you are both financially capable and prepared for the responsibility of buying a home.
4. SKETCH OUT WHAT YOU NEED. As referenced in our search process section, discuss with our advisors what you need and what you want in terms of location, home qualities, neighborhood, community amenities, views, etc. It is important to distinguish between “must-haves” and “would likes.” After discussing and writing down your thoughts on both, your advisor will be able to provide a detailed and comprehensive market study of on or off-market homes based on your needs, wants, financial position, and price comfortability.
5. VISIT PROPERTIES. Once a list of desirable homes has been compiled, our advisors will facilitate appointments to view them. It is vital to arrive at each home on-time and with an open mind. Think not only what the house is currently, but what it could potentially come to be. Inside the homes, make a point to see every room in the house as well as walk around each home’s exterior. Whether the house fits or not, you can gather ideas such as architecture, room sizes, furniture, paint, decorations, landscaping, and layout.
6. RANK HOUSES. After visiting homes, compile a list with your advisor with the intention to try and rank the homes by what you like and don’t like. Depending on the activity on your selected list of homes and the tightness of the market, time may be of the essence to determine your top choices. However, if the dislikes outweigh the likes, the search may need to be broadened. After ranking homes, analyze price, location, and house quality to identify the best fit for you and make an offer.
7. MAKE AN OFFER. Once a house has been selected, our advisors will formulate an offering strategy to achieve the lowest price possible while still being competitive to have a higher chance of buying the house. We strive to negotiate from a position of strength by using market data and our collective decades of experience and expertise to achieve the best results for you.
8. CLOSING. When a seller accepts the offer, the closing process begins:
1. Earnest money is deposited with a title company.
2. A home inspection is ordered by the advisor and the inspector evaluates the property.
3. The inspection report is then sent. Any minor costs or repairs needed will be negotiated with the seller. If unexpectedly massive repairs are uncovered and cannot be resolved, then the contract will be terminated.
4. An appraisal is ordered by the lender.
5. The advisor and the seller’s agent will collectively work together to advise the appraiser with market data and home sales comparables.
6. Once the appraisal is completed with contract value, the loan and contract will go to closing. If the home does not appraise, then a price reduction may be negotiated.
7. The preliminary settlement statement will be provided by the title company - title agent and advisor will go through the terms on the statement.
8. Day of closing includes document signing, money transfer and delivery of keys.
9. MOVING INTO YOUR NEW HOME. The long-awaited day is here! Have a move-in checklist prepared with the timing of the delivery trucks, utility connections, etc. Then, settle in and enjoy your new home.
Before you begin the home buying process, you will want to evaluate your personal finances, credit history, down payment, and what you can afford on a monthly basis. When the time comes, prepare by following our 9 financing tips below.
- Review your credit history. Your credit history is a determining factor in getting a loan. Therefore, it is wise to check it in order so there are no surprises that will put an end to your home buying plans.
2. Save early for a down payment. Though 20% of the purchase price is a common down payment amount, in some cases, a home buyer may only need as little as 3% down. However, a lower down payment may mean a higher monthly payment. So saving early will come in handy in the long run no matter your circumstance.
3. Refrain from any near term large purchases or credit card activity. Any time you open a new credit account or buy something using a loan on credit, it will affect your credit score. Therefore, if you are thinking of buying a home in the near future, it is important to start being wary of your credit usage.
4. Know what you can afford. Figure out your gross monthly income and your expenses to determine what you can afford to buy. Use our monthly Payment Calculator to provide different estimates of what you can afford monthly as well as down payment options.
5. State and local assistance programs. Depending on your financial condition and location, there may be programs that provide financial assistance and even tax benefits. Be sure to explore these programs in case you qualify.
6. Budget for closing costs. In addition to knowing what you can afford, you will want to budget for closing costs which are typically 1-3% of the purchase price.
7. Budget for improvements and unexpected repairs. Depending on the age and condition of the home, there may be needed improvements and unexpected repairs.
8. Research mortgage options and compare interest rates. There are many options for loans with varying terms, amortizations, loan fees, as well as fixed and floating interest rates. Our recommended financial sources can help you. However, we advise you to do your homework and spend time understanding the different financing programs.
9. Preapproval letter. After selecting a mortgage program and lender, we strongly recommend getting a preapproval letter. This letter should also be received prior to a more serious search for a house, and most definitely prior to making any offers to buy. In our current real estate market, most agents and their sellers will not accept offers without a preapproval letter from the buyer.
The search process for a new home can be daunting, and at times simply frustrating. However, with proper expert guidance, focused effort, and an open mind, the right house can and will be found. Here are our steps on finding your dream home.
Start with hiring the right buyer’s agent. Because the real estate market is vast, dynamic, and notably non-transparent, a competent buyer’s agent who can facilitate the process and help you navigate the market in order to uncover your perfect home is hard to find.
At Taylor Street Realty, we are knowledgeable, experienced, and motivated advisors with decades of skill in understanding our client’s needs to help them find the perfect opportunities.
Location ideas. In determining location, there are several questions to ask yourself in order to then prioritize which are the most important to you:
- Cities and towns. Large or small, public amenities, public services, schools, employment areas, activities, taxes, and insurance costs.
- Areas. Downtown urban living, suburban, rural locations.
- Proximity. Schools, work, shopping, major streets, freeways, and public transportation.
- Neighborhood Location. Do you want to be near shopping, restaurants, bars or near parks, lakes, recreational activities or more open, quiet neighborhoods?
- Community Amenities. Gates, security, clubhouse, pool, activities, and home owner’s associations.
Home Qualities. What type of home will fit you and/or your family? New construction, just completed, renovated, 10 years old, vintage charm, needs work?
- Basic interiors: Numbers and size of bedrooms, bathrooms, garage spaces, offices, family rooms, living rooms.
- Kitchens: Open concept or closed, type of appliances, islands.
- Additional rooms: Game rooms, playrooms, basements.
- Basic Exteriors: Yards or no yards, patios, balconies, gated drive-ways, courtyards, city views, mountain views, pools.
- Landscaping: desert, grass, minimal work, trees, gardens, horse/animal areas.
- Construction style/mechanicals: Single story ranch, two-story, block, brick, stucco, large or small windows, pitched or flat roofs, central air, efficient ratings, flooring, ceiling heights.
- House Direction: In respect to the sun where does the house face: east, west, north, south? North/south houses have a higher value.
Amanda is the Sales & Transaction Manager and a Licensed Real Estate Advisor with Taylor Street Realty Services. Prior to Taylor Street, Amanda was a compliance auditor at a prominent law firm in Cali....