So you are looking to buy your first home, and you don't know how to go about it? And even worse than that, as much as it is a dream for you, the fear of disappointment can make you not want to even try! What if you find something and fall in love with it only to find out that you can't buy it? What then?
That is a common fear and I am here to tell you that we have helped hundreds of people just like you get into their first home!
Here are our top 12 tips on how to buy your first home!!
Tip 1: Find an Agent to Help You Find Your Dream Home
Of course we would LOVE to help you, but if not us then find someone you are comfortable with to help you find you a new home. It costs you nothing to use and agent, and if they are good at what they do you will be in your dream home in no time.
Tip 2: Get Pre-Qualified Right Away
Your agent will recommend a good lender that specializes in the type of loan that might be good for you to use. We refer our clients to our direct lender who we know delivers the same great customer service as we do, and can perform. Credit unions are great - but they also are very hard to get loans completed through it, so take wise counsel from your agent and start the process. Best of all it is FREE!
Tip 3: Once You Are Pre-Qualified (and never before), Go Look at Homes with Your Agent.
This is the fun part of the process! You get to go look at homes and start to see yourself as a homeowner. It is exciting and can also be a little disappointing when you realize that while you want that beachfront home with granite and a pool you cannot come close to affording it for your first home!
Tip 4: When You Find Your Dream Home, Your Agent Will Advise You on What Offer You Should Make on the Home.
I cannot stress this enough to you, but really take wise counsel from your agents. Many times people want to "low ball" an offer and the home is sold out from under them or they make the seller upset so they won't sell to you at all. I am also not saying to overpay for your home, and the Residential Purchase and Sale Contract takes care of that issue because of the appraisal contingency that would be in your offer (meaning the home must appraise at the purchase price of the home in order to close). I will run a competitive market analysis for our clients on a home they are considering and many times I will have already spoken to the listing agent on the home and know how far we might be able to negotiate on the property. So please take wise counsel from your agent (and it is hopefully us who are representing you-shameless plug, I know - but I have to put it in there)!
Tip 5: Don't Freak Out!
It is about this time that first time buyers get scared. The reality of becoming a homeowners is suddenly coming true! They have what is called "buyers remorse" and they haven't even bought anything yet! It is 100% common and normal. Suddenly "foreclosure" and "short sale" start flashing in front of your eyes. "Will that be us?", you ask yourself. If you are having those fears please contact your agent and have an honest discussion. Most the time it is just panic and it will pass. I pride myself in helping people who move into their home and they love it. They post pictures on social media about their home and I get to see their families grow - what I don't want is for someone to call me and say "I made a big mistake", which by the way, has never happened. And for the record, I know people who get buyers remorse just buying a t-shirt so don't feel bad if this is happening to you!
Tip 6: Sign the Offer and Wait for the Reply.
Many times it might take a seller 2 days, 5 days or even a week to respond. Your agent will be following up and letting you know what is happening, however, we are at the mercy of the seller and the listing agent.
Tip 7: If Your Offer Doesn't Get Accepted....
Typically if you are in the running for a home there will always be a counter from the seller, many times it is to clean up the offer, and other times it is because they want different price and terms. Your agent will walk you through that. But what if your offer was not accepted and they took someone else's offer? The biggest advice is not to lose heart, and after doing this for a long time everything happens for a reason. If you didn't get this one then it is because you weren't meant to own that home.
Tip 8: Your Offer is Accepted!
Once your offer is accepted the fun begins! Typically you have 3 days to put your deposit into escrow and your "due diligence" will begin. Your home inspection will be scheduled. If financing your home the lender will need a full copy of the executed contract, which your agent will provide to them.
Tip 9: Your Lender Will Need More Information than You Think They Need....
Once you think that you have given every document to your lender they will need something else, like a recent bank statement or pay stub. Please get it to them as soon as possible so your final approval is completed and you will be cleared for loan documents. I know it can be a hassle, but in the end it is worth it right?
Tip 10: Your Deposit Only Becomes Non-Refundable When Your Sign the Contingency Release Form
Once you have completed your inspections, you have your loan approval, and the appraisal is complete you will sign a contingency removal form making your deposit non-refundable. This is so the seller knows they can move, and you won't be backing out of the transaction. The inspection period is normally 17 days and the loan approval is 21 days unless there is something else stipulated in the purchase agreement.
Tip 11: Your Loan Documents Are In Escrow!
Congratulations, you are 1 step closer to being an owner! Escrow will contact you and ask to schedule an appointment to sign your loan documents. You will be asked to bring your California ID (passport or drivers license) for the things that need to be notarized. You will be given an amount to be wired into escrow. (Note that you cannot write a personal check or bring in cash for the closing. It either has to be in the form of a wire or a cashiers check drawn on a California bank). The signing is actually quite quick and easy because you have already been disclosed all the information with your loan officer.
Tip 12: You are Cleared to Close!
Once your loan documents are signed and your money is in we then need to have your loan company fund, and so escrow will be providing conditions and asking for the funding. At this point all you need to be doing is packing and getting ready to move! Your funding will typically happen by 12:00 and then it is released for recording. We will not receive confirmation of this until around 5:00. Your keys will not be released to you until the confirmation is happening, so if you are moving right away please schedule it for the next day and never on the day of closing.
We love helping first time buyers purchase their home, and it is something that we specialize in! If you would like a list of homes that are currently available in your market, for free and with no obligation, please click HERE and we will get right back with you! If you would like to call us, we can be reached at (714)749-2179, and would love to speak to you!
Buying a home is fun, exciting and a great experience! Make sure to check out our other blogs for more valuable real estate information!