The Buying Process

Buying a Home in Santa Clarita – The Buying Process

Buying a home in Santa Clarita (whether new construction or a previously owned home), involves a great number of very intricately interwoven activities.   Each activity either influences or motivates another activity.  All activities need to be successfully executed to guarantee the successful close of escrow.

Aside from these independent yet interwoven activities, there are many individuals whose diligence, counsel, attention to detail and anticipatory actions to avoid possible problems, enable an escrow to close with the least amount of stress. Participation and close co-operation in the process by you the buyer, your loan representative, your real estate professional, title company, escrow company, pest control company, home inspection company, appraisers, other inspectors and the seller, is also required to make the home buying experience a happy and successful one.

What is involved in making your home purchase a happy and rewarding experience?

There are several easily definable steps to take once you have decided that buying a home is for you.  Tips included under each heading.

Find out what you can afford

This is a changing and fast moving market (2013).  Everything has changed!  Inventory is extremely low and you have to be ready to make an offer when you find the home your have been looking for.  Multiple offers are common – very different from a year ago.  So, before you ever even go to look at homes, finding out what you can afford is by far the best approach. Get pre-approved with a lender – a pre-qualification letter is no longer sufficient to entice a seller to look at your offer. Begin the process early….it can take time getting all the paperwork together that is needed.  You will need to approve a run of your credit, and you will need bank statements and pay stubs if not self employed.  If self employed you will be asked for tax returns. The lender will give you a list of items needed, and be prepared, the list could be quite long.  Lenders are not making it easy. Know that it is an essential part of your preparation.  If you are a veteran, please make sure you have your eligibility paperwork in order well in advance.

It is very important to find the best loan possible given your particular circumstance. Just because your friend got one type of loan does NOT mean that loan is right for you. Each financial situation is unique. How you are taxed is important as well as how long you intend to stay in the home.  Speak with a knowledgeable loan representative who can give you several choices, and is willing to explain in detail what he has to offer and why it makes the most financial sense for you and your family situation. Always ask to see what the loan costs are going to be for you (get an estimate), and when comparing lenders, compare on the SAME DAY. Interest rates can vary from day to day.  Lenders all get the same rate sheets each day and calculate their costs accordingly.  Different lenders may quote the same rate but have greatly varying costs.

You , your real estate professional and a good loan representative can save you thousands of dollars over the life of your loan. It is very important.

Find a real estate professional who is responsive to your needs

Contact a Realtor who has a keen knowledge of your market, and who is “in touch” with the changes that have taken place nationwide in the real estate marketplace.  There is a big difference in how quickly you must decide and make an offer compared with less than a year ago.  It is a seller’s market (2013).  There are big differences in the way offers must be prepared for FHA offers, VA offers, Conventional loans, foreclosure property, HUD homes, short sales, or regular (standard ) listings.  Having a winning offer will depend greatly upon how qualified you are for each type of listing or loan.  Short sales in particular require greater knowledge and experience  from a Realtor.  Your Realtor should be a CDPE or Certified Distressed Property Specialist.  Pia Soper is a CDPE.

Identify neighborhoods and areas you like.

Do you like the area?  Are the schools important? Do you need a large yard? How far from the office will you be? Does it fit in with your life style.  Finding neighborhood listings is made easy on this site.  The site has listings by Category, Lifestyle, Area and more.  See the “Search” button on the navigation bar.

View specific homes

View specific homes and areas within the parameters that your loan representative has given you with your real estate professional. Listen to professional real estate advice – friends and family are wonderful for approving your final choice, but they are not the professionals.  View each home as an investment as much as possible during this emotion laden period. Often emotional decisions can lead to financial problems in the future. Keep in mind that you want to enjoy life as well as your home. If you financially overburden yourself by tweaking in those last few dollar a month payments, you may well regret it later. If you know for sure you are going to get a raise in the near future, it may be alright to stretch yourself to the limit. But if your job is not secure or there are known changes coming your way, it may be unwise to go to your loan limits.  A home is your place of refuge – if it becomes your burden your life can be severely impacted.

Always analyze the value of the home.

Make sure you see a comparative market analysis of the homes that are comparable to the one you choose to write an offer on.  Prices have fallen greatly in the past few years, but are now beginning to rise due to a lack of inventory and buyer pressue.  Be aware of what you are paying in comparison to those who bought before you and what has recently gone into escrow.  If you are selling your home prior to purchasing, also see the “Sellers” section of this web site for advice.

Making an offer.

In many ways, your offer will probably be structured around what you know of the seller’s circumstances. Is the home a foreclosure, a short sale, or a regular sale?  Does the seller have to sell?  Has the seller already bought another home? Does the house need a lot of work? How long has the house been on the market? Is the seller offering any incentives? including but not limited to carrying money? Are there other potential offers coming in at the same time as yours?  Multiple offers are happening in today’s market on foreclosures, short sales, and regular sales – especially if they are well priced.  You may find yourself not being considered if your offer is too low.  2013 is proving to be a market where many homes sell over asking price.  You must also be very aware of where an appraisal may come in.  An offer higher than an appraised value may be considered and accepted, but you will have to make up the difference.  Are you prepared or able to do that?  There are many more considerations, and your experienced Realtor can help you.

These questions are aside from those questions you should ask yourself. How much do you have to have this house? (remember, there are always other homes) How much do you have financially stretch to buy it and is that sensible?  What can you offer within the parameters of your loan commitment? For example, with a conventional, non jumbo loan offer, the maximum loan amount is currently set at $729,250. Unless you have extra cash or a rich uncle, you may not have the ability to offer more than a certain amount, no matter how willing the seller is to sell. If you have to have the house, you have to get another kind of loan, if you can afford it.

Negotiations are extremely important.

If your real estate professional is savvy at negotiating, you can save thousands of dollars on your purchase. Knowing the seller’s motivation and the market can make all the difference. However, bear in mind, that in the current market, the seller often has several offers to choose from. If you are pre-approved, have a sizable down payment, or have cash, and can close escrow quickly and efficiently, you can have your offer accepted even if it is NOT the highest offer on the table.

The escrow period

The escrow period is often one of the most exciting times aside from “moving in day”.  You can imagine yourself in your new home with your family!  However, it can have it’s ups and downs as well.Home inspections, waiting for the loan approval, appraisals, reports, paperwork, and getting ready to move from your current home add to the stress.  However, if you are well prepared in advance,your Realtor will guide you through it and if all goes smoothly, it will not add greatly to your stress level.  However,  don’t leave your packing, change of address, utility changes and insurance preparations till the last minute !  That garage always has more in it than you may think!

Listen to the advice of your real estate professional.

There are reasons things need to be done in the order and time that they are requested of you. Many items on the purchase contract are time dependent. You will see the phrase “Time is of the Essence”. If you do not perform your contractual obligations or use the time available to you to do your due diligence within these time frames, you will lose opportunities afforded you under the law and under your contract with the seller.

Signing Loan Documents

You have completed the requirements of the escrow, you and the seller have agreed to close escrow and it’s time for the signing of the loan documents.  These documents are long and there is a lot of “boiler plate” pages.  The MOST important page of all is the page where the specifics of your loan are laid out.  BE SURE to read each line.  Make sure the interest rate is what you agreed upon, and that points are accurate.  If they are not, do not sign.  These are legally binding documents and even a small difference can mean thousands of dollars!  Call your lender.

Moving Day

Moving day of course is the day you’ve been looking forward to! The day you get your keys and start a new life in your new home. Make sure that you co-ordinate your move with that of the seller well in advance. Call your moving company early in the escrow process and keep them in touch with the process. If you follow your real estate professionals advice, this should go smoothly. Always make sure that you have plenty of friends or other help to lift boxes!

 

Celebrate!

We all do that differently…….I’ll leave it up to you. Just enjoy!

 

Keep in touch with your Realtor. If you don’t, she will!

 

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