Silicon City Realtors Home Buyer’s Guide
Buying a home might seem complicated at first, but really, it just boils down to a few steps that should be taken in order. Here is a handy guide for the entire process of buying a new home.
1. Choose the Right Agent
The most important step in purchasing your new home is to choose the right agent – someone who not only answers all your questions but who proactively looks for homes that meet your needs. While it may be easy to find homes for sale via online searches and social media, it’s a better idea to select the right agent first, because she may already know the latest homes on the market. From the start, Leanna can help you pinpoint the right home based on your objectives as well as identify off-market opportunities and even screen properties during “broker tours” so you get quick access to the latest homes even before they hit the websites.
2. Get Pre-Approved for a Loan
After picking an agent, the next step should be to get pre-approved by a mortgage broker or a local lender. Why? In Silicon Valley, pre-approval is necessary if you want your offer to be seriously considered by home sellers. Also, knowing the loan amount will help determine financial parameters and narrow down the neighborhoods you consider. In case issues show and your credit score is lower than expected, applying for the pre-approval early will give you time to address and resolve these issues.
3. Find a Home and Review Disclosures
Leanna will help you to find and visit potential properties, ensuring a smooth selection process that makes the most use of your time and handling coordination with home sellers on dates when there are no open house opportunities. When you find the desired property, she will help clarify and review the disclosures provided by the seller and listing agent. Furthermore, Leanna will summarize the important points and highlight all issues in order to make your review of the disclosures more efficient. Only after you feel comfortable with the information on the following disclosures should you plan on making an offer:
A. Property Inspection Report
The inspector’s analysis of the condition of the property’s plumbing, electrical systems, foundation, roof, and overall condition. It lists all issues the inspector finds. Issues found in this report are not addressed by the seller, so repairs will be the responsibility of the buyer.
B. Termite Inspection Report
Lists damage to wood caused by termite infestations and/or damage caused by water. This report will include cost estimates. It describes damages as Section I or Section II issues. Section I is damage that impacts the structural integrity of the home. Section II are future problems – conditions that will probably lead to future damage, and these are the buyer’s responsibility. (Note: if you purchase homes in “as-is” condition, you will be responsible for both Section I and II repairs.)
C. Seller’s Disclosures
Contains all known material problems that a property might have, including whether remodeling has been done and whether it was done with permits
D. Title Report
Typically issued by companies such as First American or Chicago Title, this document ensures that the seller can sell the property without any liens in the way. All liens on the property (for example: unpaid property taxes) are listed here.
E. Homeowners Association (HOA) Documents
Typically come with townhouses or condominiums and contain important information on the HOA, including the size of financial reserves, whether any litigation or special assessments are looming, and if there are plans to increase HOA fees. Unlike the interest on your mortgage, HOA dues are not tax deductible.
4. Make the Offer
Even before the offer is made, Leanna will take the preparatory step of speaking with the seller’s agent to determine what the seller wants, and see if you can offer anything of value that may sweeten the deal, at little cost to you. This step displays your seriousness and desire to work with the seller – often this step helps convince a seller you’re the best buyer for his property. Then, before you offer an opening bid, Leanna will provide a comparable market analysis showing the prices of comparable properties as well as the market value of the property you want to acquire. Finally Leanna will work drafting the offer with your input, and will update you on how the process is going, giving you the interest level of other parties and whether you are entering a multiple offer situation.
5. Acceptance, Rejection, Counteroffers
After the offer is submitted, the seller may accept it, reject it or will give you a counteroffer. Leanna will work with you through this entire process, drafting your response or acceptance of the counteroffer and advising you every step of the way. A counteroffer can be given to one party or to multiple parties. If only one counter offer is given and it is accepted by the buyer, then you both enter into a binding contract. If however there are multiple counter offers, (which may have the same, or different terms). In most situations, the buyer that gets the home is the first one to respond positively to the counter offer or counter the seller by with terms that are agreeable to him.
6. During Escrow
Once both you and the seller enter into a binding contract, the escrow period begins. The escrow company is a neutral third party intermediary between buyer and seller that involves taking the buyer’s money and exchanges it with the seller’s property. In Northern California, title companies handle both title and escrow responsibilities. And escrow periods typically last for 30 days, though there are some periods that range from 14 to 45 days in total. In the case your contract has contingencies (for example: a property contingency), Leanna will bring in inspectors to view the home during the contingency period. During this period, you have the option of continuing with the purchase or backing out due to a reason related to the contingency — in which case you’re entitled to a full refund of your “good faith deposit.” Leanna will also work with your loan officer to schedule the appraisal as well as ensure that the loan proceeds arrive on time.
7. Day of Closing
Once the escrow period closes, the escrow company transfers your funds to the seller and records the deed (ownership document) in your name with the county clerk’s office. When your name is officially on record with the county, you will receive the keys, garage opener, and access codes to your new home, if any. The official deed will be sent to you within three months or less. Typically, manuals for appliances and other instructional materials are left on the property.