Home Buying Guide in Northern California
Stressful or hassle-free: buying a home in Northern California can go either way. Here is a guide to help you go through this process in the smoothest, most stress-free way possible.
Step 1: Find out How Much Home you can Afford.
You don’t want to find yourself in a situation wherein you’ve found the home of your dreams only to find out you can’t actually afford it. Determining just how much you can afford should be done as early in the process as possible. Once you have a budget and a price range, you can narrow down your options, which will save you a lot of time.
To determine your budget, you have to consider the following factors:
- Your income (and whether or not it’s going to change soon)
- Your credit rating
- How much you spend on a monthly basis
- The down payment
- Current interest rates
Step 2: Research and Compare Mortgages.
Once you’ve found out just how much you can afford, it’s time to research and compare available mortgages. There are different kinds of loan products out there. Researching and comparing loans allow you to choose the best plan for you.
When it comes to mortgages and loans, it’s important to ask questions. Don’t be intimidated to ask about fees, down payments, mortgage insurance, and other rates you may encounter.
Once you have every ounce of information you want and need to know, it’s time to negotiate with your chosen lender and get pre-approved.Why get pre-approved? Not only does this give you a concrete number, having a pre-approval in hand tells sellers that you’re a serious buyer.
Step 3: Hire a Professional
Finding the right real estate agent will help ensure the smooth running of the whole home-buying process. A good real estate agent will keep your best interests at heart and guide you the whole way, from helping you find the right home and neighborhood to negotiating on your behalf.
Step 4: Set your Criteria
Making a checklist of the features you want in your new home is a must. Knowing what you want and what you need allows you to stay within your budget or make adjustments. Should it have to have a master suite? A walk-in closet? Is a modern kitchen a must-have in your next home, or are you willing to compromise?
You should also include the kind of neighborhood that you want. Researching about different neighborhoods and their amenities helps you narrow down your choices. Keep in mind your short-term and long-term goals such as whether or not you’re planning on starting a family.
Knowing what you don’t want is also very important. Let your real estate agent know about any possible deal breakers.
Step 5: Check out Homes for Sale
With your checklist and your agent, it’s time to go and see houses that meet your specifications. Remember that sometimes you just can’t get everything you want and compromise is not a bad thing. Keep your budget and your checklist in mind, and you’re sure to find a house that’s right for you (and your finances).
Once you’ve found the home you want, it’s time to make an offer. Ask your agent to come up with a market analysis on the neighborhood you’ve chosen to see if the asking price is fair. Knowing if it’s right or out of line allows you to make a good offer that the seller will seriously consider. A really good real estate agent will negotiate for you so you can get a good deal.
Step 6: Review the Contract and Perform Inspections
The contract of sale is a legally binding document that sets forth the conditions of the home purchase; this is why it’s absolutely necessary for you to review it. Sometimes it’s necessary to retain the services of a lawyer to review the contract and its terms as well to make sure everything is covered.
Sellers are obliged to disclose any issues (i.e. problems with the title or deed, general conditions of the house, mold, termites, etc.) regarding the home, but of course you can’t just rely on the disclosure documents.
To be absolutely sure, hire a professional home inspector. Any problems found will allow you to renegotiate with the seller or cancel the purchase if you deem these issues unacceptable (this is one of those things that you’ll want to make sure is covered in the contract).
Step 7: Close the Deal
After the home has been inspected and the sellers have met the contingencies, you’re almost at the end of your journey. Before closing the contract, get a paid homeowner’s insurance policy as it is required to complete the settlement. A homeowner’s insurance policy will be in effect by the close of escrow.
Once that’s done, it’s time for more paperwork. To close on your new home, loan documents and closing papers will be signed. Your down payment along with closing costs will also be settled.
Finally, you’ll get the keys to your new home. Congratulations!