The Home Buying Steps/Process –20 Steps and Process to Buying a Home in California

Home Buying Steps – 1: Make Sure You Are Ready to Buy a Home.

There is being financially ready to buy a house. But are you emotionally ready? Even if it is just going to be your starter home, you are making a big financial commitment and putting down some roots. Make sure you are prepared to become a homeowner before you start looking at properties or comparing mortgage choices.

• Financially ready.
• Emotionally Ready.
• Understanding what you can afford.

Step-2: Calculate How Much You Can Afford to Buy a Home.

Once you decide you are ready to buy a home, it is time to set your housing budget. Look at your current debts and income and consider how much money you can reasonably afford to spend each month on a mortgage.

• Decide where to live in California.
• Get your financing in order.
• Learn financing options and eligibility requirements.
• Check your credit.

Step-3: Create a Budget, Save For the Down Payment and Closing Costs.

If you are planning to buy your dream home, start saving money for the down payment and closing costs. A little advance planning can help a lot. Knowing exactly what fees are required at closing can help you prepare for the big moment. And knowing when, where and how to save on closing costs could help lower the total amount you will pay.

• In addition to your down payment, you will need to accumulate money for “closing costs” that typically add up to 2% to 5% of the purchase price of your first home.
• Loan origination fee.
• Underwriting fee.
• Credit report fees.
• Appraisal fee.
• Home inspection fee.
• Title insurance policy and fee.
• Private mortgage insurance (PMI) and mortgage insurance premium. (MIP).
• Homeowners insurance.
• Prorated property taxes.
• Recording fees.
• Escrow fees/Settlement agent fee.
• HOA dues and more.

Step-4: Hire an Experienced Local Real Estate Agent.

There are multiple parties involved when buying a house. Your real estate agent is your representative in the home purchase transaction. Property buying and selling are major financial decisions you need to make in your life. It is extremely important to hire a professional to handle the transaction on your behalf. Although many real estate agents are readily available, hiring the right one will give you a hassle-free and successful experience. Consider working with Faruk Bhuiyan. Faruk has proven track records of success and are at the top of their field, so you know you’ll be getting expert information. Call Faruk Now.

When searching for a real estate agent, you need to consider the following:

• Years of experience.
• Number of transactions in the past 12 months.
• Experience in your price range and chosen neighborhood.
• Overall review score.
• Individual review and complains.
• Choose an experienced, honest, and full time local real estate agent.
• He will guide you through the home buying process.

Step-5: Decide What Type of Mortgage is Right for You.

Before you can apply for a mortgage, you’ll need to decide what the best type of loan is for you and which one you’ll qualify for. Look into your mortgage options. Homeownership is a powerful financial investment that can help your family build wealth and equity for generations to come. But the decision to buy a home is not taken lightly, especially when it comes to borrowing a six-figure mortgage that you may be repaying for decades.

Choosing the right type of home loan can save you thousands of dollars over time. With so many mortgage products available, it’s important to fully understand your options before you take out a home loan. Get familiar with the different types of mortgages below, so you can set yourself up for long-term financial wellness.

• Conventional Loan.
• Government Backed Loan (FHA Loan).
• VA Loan.
• USDA Loan.
• First Time Home Buyers Program.
• Fixed Rate Mortgage (FRM).
• Adjustable-Rate Mortgage (ARM).
• Jumbo Loan.
• Renovation Loan/Rehabilitation Loan.
• Interest Only Mortgage.

Step-6: Choose a Lender and Get Pre-Approved for a Home Loan Mortgage.

Pre-qualify before you begin shopping. When you are ready to start house hunting, it’s time to get preapproved for a mortgage. It can be hard to shop for a home without knowing how much you can afford. Mortgage preapproval lets you shop smarter and make stronger offers. Let us look at what it means to get preapproved and how to get started.

Mortgage preapproval is the process of determining how much money you can borrow to buy a home. Lenders look at your income, assets and credit score and determine what loans you could be approved for, how much you can borrow and what your interest rate might be.

To get pre-approved you need to apply with your lender, may need to provide proof of income, proof of assets, credit score, employment verification and government issued ID and Social Security card. You can show your preapproval letter to your real estate agent so they can help you find homes within your budget. Contact Faruk to Get pre-approved from a Lender.

Step-7: Create a Wish List.

A wish list helps you narrow down your search and keeps you on track so you can find homes that include the characteristics that are important to your family. Whether you are buying a new home or buying an older home, it is important to focus on your priorities. Here is how to create your house hunting must-haves checklist so you can find the home of your dreams.

• Prioritize your wish list to fit your budget.
• Get organized.
• Breakdown you must haves.
• Be reasonable with your top priorities.
• Focus on factors that cannot easily change.
• Consider location. You cannot change location.
• Remember your price range.
• Talk to a real estate agent.
• What type of home will best suit your needs?
• Which specific home features do you want?

Step-8: Begin House Hunting.

Your real estate agent will help you hunt for houses within your budget. Your agent will then show you homes that fit your criteria. It’s a good idea to make a list of your top priorities, some of which might depend on whether you’re looking for a starter home or forever home and what type of houses you are looking for.

Here are some things you might want to consider when shopping for a house:

• Home price
• Square footage
• Home condition and possible need for repairs
• Access to public transportation
• Number of bedrooms
• Number of bathrooms
• Kitchen and Dining Room
• Living and family room
• Backyard
• Swimming pool & SPA
• Local entertainment options
• Local school district ranking
• Property value trends
• Property/real estate taxes
• Mello Roos and Special Assessment
• HOA Fees

Step-9: Shop for Your Home and Make an Offer.

When you have found the right home, it’s time to write an offer. Before writing the offer, you should always look at “comps” (comparative sales) for the neighborhood in which you are buying. The comparable will give you a good idea of the actual market values in the area, and they will provide you with a good baseline of where your offer price should be. One thing to note: Do not focus on list price. Instead, focus on comparable sales prices.

• Look for comparative market analysis (CMA).
• Once we have established value through CMA, determine how much you would like to offer (Offer price).
• This decision is based on a combination of actual market value, your perceived value of the property, and property condition.
• Make sure your offer is strong contender.
• Keep in mind the sellers’ market and buyers’ market.
• Keep all Contingencies in place. Each of these contingencies help protect the buyers by giving them enough time to do their due diligence, get home appraisal and get financing in order.

Step-10: Get Your Offer Acceptance and Open Escrow.

Seller accepted your offer? Hooray! So, what happens now? The time between offer acceptance and entering escrow is a very precarious one that can leave buyers wondering what’s to come. Not to worry, we’ll walk you through what can happen after a seller accepts your offer.

While offer acceptance might seem like the end of your house hunting journey, it’s also the start of another – the journey to closing. Working with your agent to establish a post-submission game plan can be a great way to prepare yourself for the multitude of things that can happen between “yes” and closing.

• Receive the wire instructions from the escrow.
• Wire transfer initial deposit to the escrow.
• Do not pay cash or check.

Step-11: Perform Due Diligence.

It’s important to know all the facts about the home you’re about to buy before you fully commit by signing the dotted line. This means learning about the home’s financial background, structural safety and even the neighborhood. This is all part of the due diligence process, which protects buyers when they’re buying a house.

• Check out the area.
• Review property history.
• Investigate various aspects of the property within a specific timeframe between entering the contract and closing, known as a due diligence period.
• Due diligence inspection-get to know the area.
• Get a wood destroying pest inspection/Termite Inspection.
• Lead Based Paint Inspection.
• Radon Gas Inspection.
• Defective Drywall Inspection.
• Check permits with the city.
• Read and understand the sellers’ disclosures.
• Check the HOA covenants, conditions, and restrictions, If any (CC&R).
• Have the property surveyed (If needed).

Step-12: Get a Professional Home Inspection.

Before you buy a home, it’s always a good idea to get a professional home inspection. In most cases, you can make your purchase contract contingent on a satisfactory inspection. That means if you do not like the inspection results, you can cancel the contract, get your deposit back and walk away from the deal. Or you can negotiate with the seller to cut the price or make repairs to problem areas uncovered during the inspection. During home inspection:

• A professional home inspector will inspect, discover the true condition of the property you are about to buy.
• Attend inspection.
• Look for the health and safety concerns.
• Items that need to be repaired.
• Negotiate any Repair or Credit with the Seller.
• Review sellers’ disclosures.
• Title Search-review preliminary title report.
• Review Natural Hazard Disclosures (NHD).
• Once satisfied, remove inspection contingency (CAR Form CR).

After you view your inspection results, you might want to ask your seller to correct some of the problems you found. You can do this in one of three ways:

• Ask for a discounted purchase price considering the results.
• Request that the seller give you credits to cover some of your closing costs.
• Ask that the seller have the problems fixed before you close.

Step-13: Get a Home Appraisal. Loan Processing and Underwriting.

• After an offer is accepted, it’s time to apply for a mortgage. You typically have 30 to 35 days to fulfill your purchase contract—so you will need to act fast, locking in your interest rate and giving your lender time to order a home appraisal.
• The lender will arrange to have the property appraised. This is an upfront charge that the lender will collect at loan application. A professional, licensed appraiser will research the value of your home.
• Remove appraisal contingency once appraisal come at value and completed.

Step-14: Remove Contingencies, Purchase a Homeowner Insurance Policy.

• Once you have the property under contract the due diligence period begins.
• Your goal during this period is to systematically remove all contingencies. These contingencies are short periods of time to get your financing in order (loan conditions), verify that the property condition is acceptable (inspection objection) and to make sure the title is clear and merchantable (title objection).
• Contact your insurance provider and get a loyalty discount.
• Compare homeownership insurance.

Home Buying Steps – 15:  Work with The Mortgage Loan Officer, Get Conditional Loan Approval and Fulfill all Loan Conditions.

• Once your mortgage is approved and at least three business days before you close, you will receive a closing disclosure (CD).
• Meet funding requirements.
• Buy homeowners Insurance.
• Lender will do your employment verification.
• Letter of explanation.
• Sign closing disclosures.

Home Buying Steps-16: Do a Final Walkthrough.

One of the last steps before you sign your closing papers should be to look over the property one last time. Prior to attending the closing, walk through the property one more time to make sure any contractual inclusions are still at the property. You want to make sure that no damage has occurred since your last home inspection. Make sure the property condition is acceptable, prior to the Seller receiving funds.

• Verify final repairs.
• Check for all items included in the sale.
• Open windows and doors.
• Carefully inspect the bathrooms.
• Review the conditions of the kitchen.
• Check ceiling, walls, and floors.
• Test all the appliances.
• Try out the heating and air conditioning.
• Test the electrical system (Light, switches, and electrical outlets).
• Check water pressure and temperature.
• Tour the property.
• Keys for all doors and combination for garage openers and smart lock.
• Verify final repairs. Check all agreed upon repairs have been completed.
• Line up utility accounts.
• Look for signs of pests.

Home Buying Steps – 17: Sign Final Loan Documents/Closing Documents.

There are several documents you will need to sign at closing. Here are the documents you will encounter at closing:

• Proof of homeowners insurance.
• Closing disclosure (CD).
• Loan application.
• Loan estimate/Final settlement statement.
• Mortgage or deed of trust.
• Promissory note.
• Initial escrow statement/disclosure.
• Right of rescission.
• Certificate of occupancy (Newly Constructed Home).
• Title document.
• Remain available to sign final closing documents.
• Read and realize before you sign.
• Keep your driver’s license ready to show the Notary.

Home Buying Steps – 18: Safely Wire Closing Funds to Escrow.

It’s time to wire the down payment and the closing costs to the closing attorney. But keep this in mind: you can now see the light at the end of the tunnel; the finish line is right there ahead of you!

• Obtain a copy of the wire instructions – these should come directly from escrow and are usually sent via an encrypted email which you will need to download.
• Confirm the dollar amount of funds that need to be sent is correct
• Call the escrow/title company to verify wire instructions, bank, and account information before sending funds.
• Double check that you or your financial institution inputted the wire information correctly in your wire request.
• Once you send the wire, follow up with escrow and ask them to confirm receipt.
• Do not share any confidential information via an email that you don’t recognize and always confirm the recipient of your funds first before sending any funds.
• Do wire transfer. Do not pay cash or check.

Home Buying Steps-19: Close the Transaction/Close on Your New Home.

• Once the loan closes—which may take a couple days—the funds go to the seller, you get the keys and the home is yours!

Home Buying Steps – 20: Recording Confirmation with the County Recorder Office.

• Your settlement agent will confirm the recording.
• After recording is confirmed, you’re officially a homeowner.
• Get the keys to your new home.
• Inform all utilities of a starting date for their service and get the account switched into your name.

Get the Keys and Move in! Congratulations.

Once you are done with all the paperwork, it’s time to celebrate. You’re officially a homeowner now.

Final Thoughts on Buying a House

The steps to buying a house can make for a long overall process. First, you’ll need to be ready to be a homeowner and set a budget. Next, you’ll work with a lender to get preapproved for a mortgage. Then, you’ll start shopping for properties, ideally with a trusted real estate agent at your side. Once you find a home, your agent will help you submit an offer and negotiate with the seller. When you reach an agreement, you’ll get an appraisal and inspection. If the inspection turns up a major issue, you may want to negotiate repairs or credits with the seller. You’ll also do one more walkthrough in the house before you buy it. If everything looks acceptable, you can finally move to close and enjoy your new status as a homeowner.

Do you think you’re ready to buy a house? Contact Faruk Bhuiyan today to get started on a mortgage approval. You can also give us a call at (562) 213-8892. You may discover how the home-buying process works in California by following the steps given above. A reputable real estate agent makes the process more manageable. With careful research and determination, the keys to that dream home can be yours. Happy Buying!!!

Buying a Home-FAQ

Q: Is there any Down Payment Assistance Program in California for the first-time home buyers?

A: Thousands of down payment assistance programs are available across the U.S. to first-time and low-income homebuyers. In California, eligible applicants may receive a government grant or a second mortgage with deferred or forgiven payments. Here are some of the down payment assistance programs available to homebuyers in California:

MyHome Assistance Program

California Housing Finance Agency’s MyHome Assistance Program is available to first-time homebuyers. The program offers a maximum of $15,000 or 3.5% of a home’s purchase price as a second mortgage.

Borrowers must not earn more than the maximum household income limit set by the California Housing Finance Agency. You can check their income requirements here. Participants will also need to complete a homebuyer education and counseling course.

GSFA Platinum Program

The GSFA (Golden State Finance Authority) Platinum Program offers up to 5% of the home’s purchase price for the down payment and closing costs. The assistance is given as a 0% second mortgage and is forgiven three years after the escrow closes.

The program isn’t limited to first-time homebuyers, but borrowers must have a credit score of 640 or above. There are maximum income limits depending on what kind of mortgage you have. You can learn more about the requirements here.

GSFA Open Door Program

The GSFA Open Door Program provides up to 7% of the first mortgage loan amount to low-to-moderate income homebuyers. The program comes as a second mortgage, and the funds may be used to cover a down payment or closing costs. The second mortgage has a 30-year term, but doesn’t accrue interest or require monthly payments. Payment is due after the borrower’s first mortgage is paid off or refinanced. The OpenDoors Program is not limited to first-time buyers, but income limits apply. You can check if you’re eligible for assistance here.

US Department of Housing and Urban Development

Additional programs in California can be found on the state’s HUD Page.

Q: What fees are included in a Closing Costs?

A: These are the fees normally charged in a home buying:

• Escrow Fee/Settlement Agent Fee.
• Loan Origination Fee.
• Credit Report Fee.
• Appraisal Fee
• Processing Fee
• Underwriting Fee
• Mortgage Broker Fee.
• Prepaid Interest.
• Recording Fee.
• Lender Title Insurances.
• Owners Title Insurance.
• Property Taxes.
• County Taxes Reserved.
• Homeowner Insurance.
• Notary Service Fee.
• Home Warranty.
• Endorsement Fee
• Record Deed of Trust.
• Record Grand Deed.

Q: How much are closing costs, on average?

A: Buyers can expect to pay between 2 and 5% of a home’s purchase price in closing costs. On a $200,000 house, that amounts to $4,000-$10,000. You’ll pay closing costs on top of your 5-10% down payment. So, on a $200,000 house, you could hand over a grand total of $14,000 to $30,000 (down payment and closing costs) before you get your house keys.

Q: If I offer lower than asking price, will my offer be accepted?

A:  There are many cases in which an offer lower than list price is appropriate.

• If the property is a “fixer upper”, go ahead and offer lower. You will want a reasonable margin to repair and rehabilitate the property.
• If the home is above comps, certainly offer lower. The owner and agent may be testing the market a bit to see if there are any takers.
• If the home seller is an “equity seller” (also known as a standard sale, not a short sale or bank owned), the owner and listing agent typically “pad” the offer a bit. Again, check comps and if the asking price is obviously padded, offer less.

• There are also cases in which an offer priceat list or higher than list price is appropriate.

• On a short sale with a “teaser” price. If a it looks too good to be true, you can bet that it is!
• On a highly competitive bank owned property. They are almost always priced below market to attract multiple offers. To win it you will need to compete!
• When you find the perfect home after many months of looking. At that point, buy it!

Q: How Long Does It Take to Close on a House?

A: Typically, it takes 30 to 45 days to close on a house, depending on a few factors like how fast it takes to get a home inspection and whether you are pre-approved for a mortgage.

Q: How Much Money Should You Save Before Buying a House?

A: How much money you should save before buying a home depends on how much of a down payment you might need to buy a house. If a home you want to purchase costs, say, $600,000, you might need a 20% down payment, which would be $120,000, for example. You can buy a home with as low as 3.5% down FHA Loan.

Even if you don’t need a 20% down payment, and not every buyer does, it may be useful to have money to pay for inspection fees and anything else that might come up when house hunting.

Q: How Much is the Closing Costs When You Buy a House?

A: There are many fees associated with closing costs. These costs can add up to 2% to 5% of the home’s purchase price and are typically due at the closing.

Q: When Is It Too Late to Back Out of Buying a Home?

A: If you have not signed a purchase contract to buy a house, feel free to walk away. If you are “in a fully executed contract” with the seller to buy the house, getting out of the contract depends on the contingencies in the contract, like a home inspection or if you can’t secure financing, were outlined in the contract. You may end up forfeiting your earnest money if you walk away outside of any contingencies. So, if you decide you “don’t want the home,” then you may have some legal hoops to jump through, so it is best to speak with your lawyer.

[/cq_vc_accordion_item][/cq_vc_accordion][/vc_column][/vc_row]

Home Buying Steps – Day of Closing

On the day of closing, the escrow company transfers your funds to the seller and records the deed in your name with the county. Once you are on record with the county, I will provide you with the keys, garage opener, and access codes, if any. Other information, such as manuals for appliances, are usually left at the property. While you are the owner of record when escrow closes, you generally will not receive the official deed from the county until three months later. Remember these home buying steps.

Enjoy the home

Enjoy your new home! Wow-home is here to serve you for all of your housing questions or issues during the escrow period and even after you close. Follow these home buying steps.

We go above and beyond to help our clients.

That’s the sign of wow-homes agent. Buying or selling, you’ll have a trusted real estate professional guiding you every step of the way. Follow these home buying steps and you will not go wrong.

Congratulation!

Before the big day, you’re entitled to a walk-through to confirm that nothing has changed since the inspection. After that, make sure you have all the money required for the closing wired into the correct account. The escrow period closes once the new deed to the property is recorded in your name and the funds get released to the seller. Closing day is when you sign all the papers, keys are handed over, and you and the seller officially seal the deal. Congratulations! You’re now the owner of a new home! I hope these home buying steps helped.

Home Buying Steps – The Bottom Line

Purchasing your first home is perhaps the biggest financial decision you’ll ever make. Don’t take on more of a financial obligation than you can handle. A small stretch may be worth it, but a big one could haunt you if life gets temporarily bumpy. Keep your risk tolerance in mind. If you find great security in owning your house, save more money for a large down payment and find a loan that works for you. The higher the down payment, the less in debt you will be; the less debt, the better you will be able to weather. Follow these home buying steps while buying your dream home.

Home Buying Steps – What’s Your Home Worth

We’ll give you an instant estimate of what your home is worth based on real-time sales in your area. Also as a complimentary service, we can evaluate your home in person and give you pricing recommendations based on its unique characteristics and details.

You are paying me for my specialized expertise on the region I sell, and the big guys will never be as accurate as me. From search to offer, we’ve got your real estate needs covered. On Wow-Homes.com you get instant access to all current MLS listings, neighborhood info and more. When you’re ready to tour homes and make an offer, I will be there to guide you through the process and help you win the home you love. Buying a home is a journey. From our dedicated loan officers to our online learning center, we’re here to help every step of the way. Our home buying steps are just a guideline for you.

Home Buying Steps – Contact Us

Faruk love and breathe real estate – Los Angeles, Orange County, Riverside and San Bernardino County real estate. Please call Faruk Now at (562) 213-8892 For a Free No Obligation Consultation. You may also Contact Us via Email at: realtorfaruk@gmail.com.