For years you’ve rented apartment after apartment, slept on friends’ couches, or ping ponged from your parents’ place.  That was fine when you were younger, but now things are different.  Maybe you’ve got a family now and that lifestyle just doesn’t work any longer.  Making the decision to purchase is just the first step and while it feels good, unless you’re a real estate wizard, you probably don’t know the first thing about how to go about it.  RRSV is here to demystify the buying process for you.

  • Get Pre-approved for a mortgage: If you’re really serious about buying a house, the first thing you need to do is get pre-approved for a mortgage.  There are several reasons for this.  First, it gives you an idea of how much house you can afford.  Picture this–you’ve found the perfect house, a 3 bed, 2 bath house with an in-ground swimming pool, a large yard, and room to add on should you wish to expand your family, and you’re all ready to put in an offer on it when you find out that the $1.3 million dollar price range far exceeds your budget.  You’d have wasted everyone’s time and you’ll be disappointed that your dream house and all of your plans for it have gone up in smoke.  If you are pre-approved for a mortgage, you’ll know just how much you can spend, which informs not only the type of home you can buy (house, townhouse, condo), but the areas in which you can look for a house.  Plus, it makes the whole process go much smoother when you can email the listing agent your pre-approval letter when you make the offer.


  • Set Aside Money for the Down Payment: One of the most important things you have to do is make sure that you have the money put aside for a down payment.  Most of the time, this is about 20% of the purchase price.  Your loan from the bank won’t cover your down payment, so you need to know what you have available to you.  You also need to be able to prove that you have this money — you knowing it won’t be enough, so be prepared to hand over your most recent bank statements, 401k Statements, and any other account statements over to your agent, so they can submit it along with your offer and pre-approval letter.  Without it, your offer won’t be accepted.


  • Talk to an Agent: You may think that the only thing you need to shop for is the house, but that’s not true.  Before you get into that, you need to find an agent to help you close the best deal possible.  Not all agents are made equal and you want to make sure that you find the one that will best represent your wishes.  When it comes to finding a real estate agent, you want someone who meshes with your personal style, someone you can trust.


  • Preview the House with Your Agent: Possibly the most important thing you can do is going to see the house in person.  Pictures may be worth 1000 words, but if you really want to get an idea of what a house is like, you have to see it in person.  Pictures can hide a lot of things, cracks in the walls, mold, water damage, but it is much harder to hide when you’re actually at the house.


  • Request Inspections and Reports from the Listing Agent: This is especially important because you can’t always tell what a house’s problems are just by looking at it–even if you’ve seen the house in person.  These reports tell you things such as whether there could be lead paint on the walls, termites/termite damage, or even if there is foundation issues.  If you don’t thoroughly examine the reports, you are more likely to find yourself with a money-pit full of expensive repairs.


  • Get a Market Valuation: One of the first steps in understanding how much money you should offer for a house is knowing what other houses in that same neighborhood have sold for recently.  You may not like it, but a large part of what you’re buying when you purchase a house is the location.  Because housing prices vary based on the location, you need to be aware of what is a normal price for each area in which you are interested.  If you don’t, you might get laughed out of negotiations.


  • Discuss Purchase Price and Terms with Your Agent: Obviously, if you’ve been pre-approved for your mortgage, you aren’t looking at anything outside of your price range, but that is only one consideration.  After doing the market valuation and reading all of the reports sent by the Listing Agent, your agent will have a decent idea of what price will get you the house.  Things like how long the house has been on the market and how much work is needed to make the house livable will play a large part in how much you should offer.  You may also want to find out if the seller will be willing to pay for any of the repairs mentioned in the reports, however, if a house is being sold “As-is,” you will have to take care of it yourself.


  • Submit the Offer and Keep to the Contract Timelines: You might think that once your offer has been submitted and has been accepted by the seller, you can sit back and relax until the Close of Escrow, but that is not the case.  Depending on the terms of the contract, there will be contingencies to be removed and the disclosures that you received before making the offer have to be signed and returned to the Listing Agent.  Most of the time, Close of Escrow is anywhere from 30-45 days after Acceptance, although we’ve had clients close on a property in as little as 10 days.  Usually, that only happens when the offer is for cash (no mortgage) because there are less contingencies to be removed.  However, that is not the norm and while each contract has the option for a standard timeline, not all of the offers stick to it, so you have to be cognizant of what is due when.  Thankfully, your agent should be on top of this for you.


  • Keep Track of the Loan Process/Paperwork:  If you’ve made a cash offer, this doesn’t apply to you, but most of the time, buyers need a loan to pay for the house. For the most part, this is on your agent. He or she will coordinate with your lender and the Escrow Officer to make sure that all of your paperwork is ready in time for Close of Escrow.  Unfortunately, the paperwork isn’t always ready, so your agent will have to file an Extension of Contract with the Listing Agent, however, this doesn’t seem to happen all that often.  Usually, the paperwork is ready about a week before Close of Escrow and your agent will schedule a time for you to go into the Escrow Office to sign it.


  • Review Final Documents for Closing, Bring in Final Funds, and Prepare for Closing: At this point, the end is in sight.  You can just about see the finish line and are chomping at the bit –okay, that’s enough horse racing metaphors for one blog post–but in all seriousness, this is it.  You’ve spent, at minimum, a couple of months looking for your perfect home and all of your planning is coming to fruition.  Just take a breath and trust your agent to get you across the finish line.  All that’s left to do is pick up the keys and move into your brand new house!




About the author

Shan Saigal

Shan Saigal

Broker Associate

- Ask about our Seller Commission Schedule: Sell Your Home with 1% to 6% commission -Short Sales, Real estate Homes for Sale, Buying and Selling homes, Foreclosure information, search MLS listings through my website. -Community information, Local schools. Properties for sale. -I help Buyers looking for Real estate Values in the San Francisco Bay area. - Ask for Free Short Sale & Foreclosure information. - Free & Confidential Information/Consultation to Discuss Your Situation! - If you need help with Bank Owned REO property, I can help. - Buyer Down Payment Assistance Program to Buy Your Home

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