10 Steps to Home Ownership
The process of home ownership can seem daunting but the reward is a great investment.
Step 1: Are you ready?
Many people harbor secret fears about buying a home, and some of those fears are justified. Not everybody is cut out to own a home, and if you’re one of those people, it’s better to find this out now than when you’re under contract.
Renting vs. Buying
You might decide that renting is better for you than buying, because buying a home has its drawbacks.
RENTING BUYING
- can move anytime – committed to one location
- cannot customize your home – can customize to suit your needs
- repairs are paid by landlord – you will need to pay for all repairs
- no risks. – investment. able to earn equity
- no tax benefits – will provide tax benefits
Step 2: Hire an AGENT. Be sure your agent is a REALTOR
With so much information available online, you might wonder why you need an agent at all. But all local markets vary from one another, and a good agent can guide you by giving you information based on experience and market knowledge.
REALTORS are agents who adhere to a strict code of ethics and belong to associations that give their REALTORS access to exclusive tools and resources to help you through the maze of forms, financing, inspections, marketing, pricing and negotiation.
Team Balch is comprised of REALTORS that you can depend on.We are committed to working with you and for you in all the transactions. Call us today at 858-722-8640 so we can sit down with you and explain the process further.
Step 3: Get loan pre-approval
REALTORS suggest you start the mortgage process before previewing homes to ensure you are looking at homes within your price range and to be in the strongest position to negotiate as a pre-approved buyer.
Line up your financing, set aside a down payment and study the loan programs available. By doing your homework, you will know exactly how much you can pay and what it will cost you.
Order a Free Credit Report
Give yourself time to clean up a credit report that contains mistakes. Dispute errors. Try to reduce your monthly debt obligations now by paying down those loan balances. If you live in California, you are entitled to get a free credit report from the three major credit companies once a year.
Go to www.annualcreditreport.com
Find a Lender
Check out places to get a mortgage and compare rates and fees. Start with your own financial institution, then interview a few mortgage brokers and choose a loan product you completely understand.
Determine a Down Payment
The more you put down, the lower your monthly mortgage payment. At present, it is best to have at least 10-20% of the total price of the house as down payment.
Consider FHA Loans
FHA loans carry competitive interest rates, come with minimum down payment requirements and allow sellers to pay some or all of your closing costs.
Get a Pre-approval Letter
Showing the seller you are already pre-approved for a loan gives you an edge during offer negotiation. You can get this letter of pre-approval from any loan officer.
Step 4: Look at more than just the home
Research all the aspects that may be important to you when picking a neighborhood such as crime statistics, local school and proximity to parks, shopping and freeways. Utilize your REALTOR to make home suggestions that match all of your needs.
Step 5: Choose your home from many
Look at as many homes as possible. Team Balch can set you up with a House watch sent to your email so that you can quickly and easily view large numbers of homes, search a variety of prices, take video tours and view extensive neighborhood information. Email us at teambalch@gmail.com and provide us with your criteria
Step 6: Get funding
Buyers often end up spending too much in interest and closing costs. Always research mortgage options and costs; A quality mortgage broker or loan specialist will be able to discuss all the various options available to you.
Step 7: Make the best offer
In a typical transaction, you will complete an offer that your REALTOR will present to the seller and their REALTOR. The seller, will then accept it, reject it or make a counter-offer.
Step 8: Have inspections & review disclosures
Before closing always get a professional home inspection. Also consider termite, pool, roof and electrical inspections. Review the inspection reports and all of the disclosure documentation you receive from the owner, REALTORS or homeowners association regarding local area, natural hazard, and lead paint among others.
Step 9: Get insurance
Real estate insurance protects owners in the event of catastrophe and can be the bargain of a lifetime. Make sure you also receive Title Insurance to protect against undisclosed liens and ensure that you have clear title to the property.
Step 10: Closing – know what to hold on to
Before closing, buyers typically have a final opportunity to walk through the property and assure that its condition has not changed since the purchase agreement was signed. The final step to closing is the recording of the Grant Deed at the County Recorder’s Office. Remember that the papers you receive at settlement are extremely valuable – so hold on to them.
Last but not least, enjoy your home!
