The home buying process in California can be stressful even during the best of times, and while the pandemic is on, it might feel positively overwhelming. Although there are things that are different now, the essence of it stays the same. This means that understanding the key steps will help you reach your goal and make your dream a reality.
So, regardless of when you plan to buy, there are a few things you should be aware of. For starters, the average time that the home buying process takes is about six months. This may seem like a long period, but there’s a lot to do here. Not only do you need to tour homes and find the one that suits you the most, but you also have to review your financing options, hire a real estate agent, make offers, prepare to move, and eventually close on your new home.
As you have probably realized by now, it’s best to be prepared for every step of the process if you want everything to go well. So, here’s what you should focus on.
Check your credit score
The first thing you want to do when buying a home, not only in California but anywhere else, is to check your credit score. Even before you permit a lender to do it for you, do a thorough review of your credit report on your own. If there are any errors in it, make sure to dispute them as soon as you can. This way, these can be resolved before you apply for financing.
The higher the credit score you have, the lower the interest rate you’ll receive. Anything above 720 is considered to be very good, but it depends on the specific lender. Most of the time, you can get approval with a credit score of 580 or higher.
Find a real estate agent
Most buyers are eager to move to their new homes as quickly as possible. And if you have already found an ideal place in your area, you probably don’t want to waste any time. However, to be able to relocate with the best possible help as you should, you need to have a professional real estate agent on your side. And if you know that sellers typically fund the buyer’s agent commission, there’s no reason not to get one.
If you’re still wondering where a buyer’s agent can help you exactly, here’s the answer:
- Market insights. Professionals can identify home value trends, developments, and the overall state of the market.
- Offer price. They can help you to make an initial offer that will be competitive.
- Negotiating. Agents know when to argue for a lower price and how to negotiate it.
- Professional recommendations. These people can provide you with referrals for trusted lenders, attorneys, or contractors if you need them.
- Experience. The experience agents have in the field will simplify the process for you, so you’ll always be on top of due dates and paperwork.
Start the home search
Finally, we come to an exciting part of the home buying process in California. An online search of available homes is the best way to start. According to research, 90% of buyers use online resources when purchasing a home. So, it’s obviously a good path to follow. Additionally, your agent will send you listings and schedule showings.
However, the most important thing when you’re trying to choose a house is to stay flexible. You’ll have to adjust your criteria a little bit, but that doesn’t have to be scary. Here, we’re talking about things like sacrificing an extra bedroom to be in the desired neighborhood.
Don’t be afraid to experiment with your search parameters. This is a great way to discover what your money can get you if you change your wish list a bit.
Make an offer
Once you find the right home, it’s time to make an offer for it. It should be based on a comparative market analysis (CMA) done by your agent. In a few words, CMA is a calculation of a home’s market value, based on recent sales in your area that are comparable. This is also the time when you and your agent together decide if you should leave some room for negotiation.
Now, we understand that you’re more than excited to call a reliable moving company like Go Movers Bay Area and relocate to your new house. However, know that not every offer works out. You may have to submit a few of them before you successfully close on a home, and that’s completely normal.
Secure your financing
Even if you’ve managed to get pre-approved, which is advisable if you’re a first-time homebuyer, there are a few additional steps you need to take to submit the mortgage application officially. After you complete all of these, you’ll receive the clear to close. This means that the lender has approved your purchase.
The loan application is the first thing you’ll need to do here. During this part of the process, you want to respond to requests as quickly as you can. It’s in your interest to do so as waiting can get you a delay in your closing.
After you’re done with your application, the lender will hire the appraiser. There’s not much you can do here but to wait. When it’s over, both you and your agent will get copies of the appraisal report. So, you can check the market value and see how the calculations have been done.
Close the deal and move
Most buyers choose to have a final walkthrough, usually on the morning of closing. Buyers do this to ensure the home is in the same state as when they made the offer or that the repairs they agreed upon have been done.
On the closing day, expect to spend a few hours signing the paperwork regarding the house. Also, know that you’ll have to bring the funds needed for closing costs. These range from 2-5% of the sale price, and paying these concludes the home buying process in California. Congratulations, the house is now yours!