Globenex Realty
Shelly Hu

What to do When Buying a Home

Buying a home is a long and (usually) stressful process. Here is an outline of the process so that you know what to expect when you are buying a home.

  1. Hire a Buyer’s Agent
    • A buyer’s agent will represent only you and have a fiduciary responsibility to look out for your best interests.
    • Buyer’s agents may ask you to sign a buyer’s broker agreement, but it is the seller who pays the commission.
    • Interview agents until you find an agent you trust and with whom you feel comfortable.
    • Once you have settled on an area, try to hire a neighborhood specialist.
  2. Get Pre-Qualified / Pre-approved
    • Order a free credit report online and fix mistakes, if any.
    • Ask your agent for a referral to a mortgage broker, but also compare rates offered by your own bank and / or credit union.
    • Ask the lender to give you a loan pre-approval letter, which means it will verify your income and pull a credit report.
    • * Determine your maximum loan amount, but choose only a mortgage type that you understand and a payment level with which you feel comfortable, which may very well be less than the maximum for which you are approved. *
  3.  Look at Homes for Sale
    • Ask your agent to look at homes for you before showing them to you.
    • Narrow your search to those homes that fit your exact parameters to find that perfect home.
    • Ask your agent to give you MLS print-outs of comparable sales in your targeted neighborhood.
    • Consider all homes on the market, including fixer-uppers, REOs, foreclosures, short sales and those overpriced homes with longer DOM.
    • Observe open house etiquette.
    • Tell your agent which online home listings you are interested in previewing and ask for additional input.
  4. Write a Purchase Offer
    • Consider writing seller’s market offers in sellers markets and buyer’s market offers in buyer’s markets.
    • Select a home offer price based on the amount you feel a seller will accept or counter.
    • If you are considering a lowball offer, ask your agent to substantiate this price for you.
    • Prepare for multiple offers if the home is considered desirable in a hot location.
    • If your offer is rejected, ask your agent to explain why and don’t repeat that mistake with your next offer.
  5. Negotiate and Write Counter Offers
    • Expect the seller to issue a counter offer.
    • If the seller counters at full price, continue to negotiate.
    • During offer negotiation, share personal information about your family to give the seller a reason to care about you.
  6. Make an Earnest Money Deposit
    • When your offer is accepted, deposit your earnest money check with the appropriate party.
    • Do not ever make your check payable to the seller.
    • Your offer should contain contingencies that will return your earnest money deposit to you if you cancel the contract.
  7. Open Escrow / Order Title
    • Your agent or transaction coordinator will open escrow and title, if the listing agent hasn’t already done so.
    • Ask for the escrow officer’s name, phone and escrow file number.
    • Give this information to your lender and your insurance agent.
  8. Order Appraisal
    • Your lender will require an advance payment for the appraisal.
    • If you receive a low appraisal, discuss options with your agent.
    • Ask for a copy of the appraisal.
  9. Comply With Lender Requirements
    • Lenders may ask for additional information.
    • Do not make home buying mistakes such as altering your financial situation while in escrow.
    • When the file is complete, the lender will submit it for final underwriter approval.
  10. Approve Seller Disclosures
    • Read and question items you do not understand on the TDS, Seller Property Questionnaire, natural hazard report, pest inspection / completion and other documents such as a preliminary title policy.
    • Realize you have 10 days to cancel if lead paint is a health hazard.
    • Read every document in its entirety; ask questions about all seller disclosures.
  11. Order Homeowner’s Insurance Policy
    • Order your homeowner’s insurance early.
    • Sometimes previous claims by a home owner can make it difficult to get insurance.
    • Get replacement coverage.
  12. Conduct Home Inspection
    • Hire a reputable home inspector.
    • Bring a home inspection checklist with you.
    • Attend the home inspection.
  13. Issue Request for Repair
    • If the home inspection turns up health and safety issues, issue a request for repair by asking the seller to address those issues or give you a credit for them.
    • Realize no home is perfect, and the inspector will find faults.
    • Be reasonable.
  14. Remove Contingencies
    • By default, California C.A.R. contracts give you 17 days to remove contingencies.
    • Make sure your loan is firm and the appraisal is acceptable before removing your loan contingency.
    • If you do not remove contingencies, the seller can issue a request to perform and then cancel the contract, on top of demanding your deposit.
  15. Do Final Walk-Through
    • Do not pass up doing a final walk-through.
    • Inspect the property to make sure it’s in the same condition as when you agreed to buy it.
    • If you find a serious issue, address it now before you close.
  16. Sign Loan / Escrow Documents
    • In southern California, you will sign escrow documents shortly after opening escrow.
    • In northern California, you will sign escrow documents along with your loan documents near closing.
    • Bring a valid picture ID.
  17. Deposit Funds
    • Bring a certified check payable to escrow.
    • Expect escrow to pad the amount, so you will receive a refund after closing.
    • Consider asking your bank to wire the funds to escrow, saving you the hassle of waiting in line at the bank.
  18. Close Escrow
    • Your property deed, seller’s reconveyance and deed of trust will record in the public records.
    • Title will notify you and your agent when it records.
    • After recordation, unless your contract specifies otherwise, the property is yours — change the locks immediately.

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