Patience and Preparation
Buying a home in California can be an exciting, but intimidating process. If you are a first-time homebuyer, terms like mortgage insurance, counter offer and escrow can be enough to make you reconsider the upside of apartment living. However, with a little preparation you can glide through the steps of buying a home in California with confidence.
Assess Your Needs
Make a list of items you need and want in a home, such as which neighborhood you want to live in, the size of the home and any amenities. Look through the realty section of the newspaper and find out what the average cost of your ideal home is, then estimate the mortgage payment. Your mortgage payment should ideally be no more than one third of your monthly net income.
Speaking with a real estate and/or mortgage loan professional right away can save you time and frustration. A knowledgeable professional can give you current information on the California real estate market and answer any questions you have. They can also assist you in the process of pre-qualifying for a home loan. Homebuyers who have pre-qualified know exactly how much money they will be able to borrow and it can increase a buyer’s chances of having his offer accepted during negotiations.
Touring houses for sale is one of the most enjoyable steps in buying a home. Work with your realtor and try to have fun in the process.
Make an Offer
In California, making an offer on a home does not automatically obligate a buyer to purchase. The title to the home must be clear and the home must pass inspection by a licensed inspector.
It is common to receive a counter offer from the buyer, sometimes asking for a higher price or a division of the closing costs that is more favorable to the seller. At that point a buyer can accept the counter offer, submit a counter offer of her own or reject the counter offer at no penalty and continue house hunting.
Before you will be allowed to close the loan and officially take ownership of your new home, you will have to buy homeowner’s insurance. A typical home insurance policy protects against theft, fire and liability, but if you live in an area of California prone to earthquakes, consider paying extra for a policy that will also cover earthquake damage. If you do not already have an insurance provider, your realty expert or loan agent can refer you to local agents.
Closing is often referred to as “escrow” in California. The typical period for escrow is 30 days; however, you may have agreed to a shorter or longer escrow period during negotiations. During escrow the transaction process becomes finalized. Title records are checked for errors, taxes and other claims must be settled, loan and title documents are signed and the buyer is allowed a final walk through to make sure the condition of the property has not changed. After all the necessary paperwork is signed and filed and escrow has closed, the new owners receive the keys to their new home and are free to move in.