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Buyer

The Home Buying Process

INTRODUCTION

Buying a home is one of life’s most important investments and exciting adventures. As your Coldwell Banker Residential Brokerage Independent Sales Associate, I will guide you every step of the way by:

  • Helping you get pre-approved and establishing your purchasing power
  • Helping you determine your home preferences
  • Helping you determine your offer
  • Negotiating the offer and contract
  • Facilitating the financing process
  • Initiating the property evaluation and inspection process
  • Explaining the title search process
  • Preparing you for the close of escrow and associated costs

IMPORTANCE OF GETTING PRE-APPROVED

In today’s real estate market, it’s essential to get pre-approved before starting your home search as it allows you to:

  • Understand your financial condition
  • Understand how much home you can afford before you begin your home search
  • Strengthen your purchasing power when making your offer

Princeton Capital, Coldwell Banker’s mortgage partner—and a full-service mortgage company with a proven and trusted track record—can help you determine your purchasing power before your home search gets underway. The company will show you a variety of financing types (FHA, conventional, jumbo, super jumbo, etc.) and will determine how much you qualify for with each type. Based on your desired payment level and the funds you have available, Princeton Capital can determine your purchasing power and design a loan that will work for you.

THE POWER OF BEING APPROVED

  • Getting pre-approved helps put you in a better negotiating position by letting the seller know you are committed and the financing is not in question
  • In cases where there are multiple offers for homes, buyers who are pre-approved have a better chance of an accepted offer on the house they wish to buy—versus those buyers who are not pre-approved

BEGINNING THE PRE-APPROVAL PROCESS

Here are some of the current documents you’ll need to provide your lender to get your pre-approval started:

INCOME

  • Current pay stubs, usually for last two months
  • W-2s or 1099s, usually for last two years
  • Tax returns, usually for last two years

ASSETS

  • Bank statements
  • Investments/brokerage firm statements
  • Net worth of businesses owned (if applicable)

DEBTS

  • Credit card statements
  • Loan statements
  • Alimony/child support payments (if applicable)

DETERMINE YOUR PREFERENCES

FEATURES

# of bedrooms, # of bathrooms, Family room, Dining room, Formal living room, Kitchen, Floor plan style (i.e. single level, two-story, etc.), Square footage, Views, Architectural style (i.e. ranch, contemporary, traditional, modern, rustic, etc.), Swimming pool and/or spa, Garage, Deck/patio, Yard/garden, Condition (new, fixer upper, etc.)

LOCATION

Close to employment, Schools/daycare, Proximity to police, Recreational facilities, Public transportation, Freeway access, Shopping/dining

DETERMINING YOUR OFFER

Many factors influence the asking price of a home. To help you decide how much you feel comfortable offering for a property, I will gather critical information for you regarding the factors that impact how much you should consider paying for the home, including:

  • How long the home has been on the market
  • If the price has been reduced
  • The prices for other comparable homes in the area
  • If there are multiple offers
  • Other items that might be included in the sale – furniture, hot tub, etc.
  • The “list to sale price ratio,” an indication of how competitive the market is for homes in this area
  • Why the seller is selling
  • Whether the seller is offering an assumable loan or financing

NEGOTIATING THE OFFER AND CONTRACT

You may make your offer subject to certain terms or contingencies, including securing of financing or perhaps the sale of your current home. You may also make the contract subject to various inspections by both you and professional inspectors. Most contracts include some standard provisions, such as property taxes, insurance costs, utility bills and special assessments that will be prorated between buyer and seller. Others outline what happens if the property is damaged before closing, or if either party fails to go through with the sale. I will review every aspect of your offer and contract with you.

Together, we will plan a strategy for getting the most advantageous terms for you, the buyer, at the price you are willing to pay for the property.

NAVIGATING THE FINANCING PROCESS

  • You submit the completed application and any required supporting documentation to the lender (when you are pre-approved, this is already done)
  • The lender orders an appraisal of the property, a credit report and begins verifying your employment and assets
  • The lender provides a good faith estimate of closing and related costs, plus initial Truth in Lending disclosures
  • The lender evaluates the loan package with all of your supporting documents, issues a letter of commitment, loan approval and list of conditions, if any
  • You sign the closing loan documents and the loan is funded
  • The lender sends its funds to escrow
  • All appropriate documents are recorded at the County Recorder’s Office, the seller is paid and the title to the home is yours

PROPERTY INSPECTIONS

WOOD DESTROYING PEST AND ORGANISMS (TERMITE) INSPECTION

This inspection identifies existing or potential pest, dry rot, fungus and other structure-threatening infestation or conditions. The initial inspection fee covers only those areas which are accessible to the inspector. Inspections of inaccessible areas cost more and are subject to an estimate by the inspector. These inspectors must be licensed and can give estimates to correct noted problems, can make the suggested repairs and/or can certify that the work has been completed.
GENERAL HOUSE INSPECTION

This inspection identifies material defects in the essential components of the property based upon a noninvasive physical inspection. There are no licensing requirements for someone to be a home inspector. These inspectors are not allowed to give estimates to correct noted problems, nor can the inspector perform any of the repairs.

THE TITLE SEARCH PROCESS

A title spells out who has the right of ownership for a property. It is considered “clear” if there are no claims or liens against it. In order to make sure nothing will prevent transfer of the property to you, a title company will conduct a title search and prepare a preliminary report that indicates what recorded matters affect the title to the property and if the title insurance company is willing to insure the title. At the close of escrow, the title company will issue an Owner’s Policy of Title Insurance to protect you against losses that might arise from covered claims on the title.

PREPARING FOR THE CLOSING COSTS

A home purchase is a complex transaction involving many parties and associated fees. In addition to your deposit and down payment, there are a variety of other costs involved in the close of escrow, including:

  • Loan origination fees, appraisals and reports
  • Surveys and inspections
  • Mortgage insurance
  • Hazard insurance
  • Taxes
  • Assessments
  • Title Insurance, notary and escrow fees
  • Recording fees and stamps

The lender will provide a good faith estimate of these costs prior to the close of escrow, so that you will know in advance what to expect. Some of these costs may be negotiable items with the seller. Naturally, I’ll walk you through each item in your closing to make sure you understand every detail.

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