What you need to know as a first time home Buyer!
1. Get Pre-Qualified – Contact a local lender to discuss your finances. You will need 2 years of tax returns, 2 most recent pay check stubs & 2 months of bank statements. If you do not know a lender, I recommend Brian Harris with Key Source Lending. He can be reached at 909-213-2744. He has serviced many of my clients with smooth, stress free transactions.
2. Chose the right Real Estate Broker – Chose a Real Estate Broker with experience & a Broker that is familiar with the area, recent sales & active listings in the area where you wish to purchase a home. Your real estate Broke must have your best interest in mind when looking for a home and strong negotiating skills. Using a Broker vs. a Real Estate Agent is the difference in experience, education and more security for a buyer or seller knowing the liabilities throughout a transaction.
3. The internet – It is an excellent source to find a home. The most common ones used today are Trilia, Zillow, realtor.com or Redfin. They all have valuable information, however not always accurate. This is where a real estate Broker can assist you with “Cross referencing” properties, found on the sites, in the local multiple listing service. This is a web site for licensed real estate Brokers and Agents only. It is where the Broker will list their active listings and has more accurate information about a property than county records, where most real estate web sites obtain their information from.
4. Searching for your dream home – The web sites I listed above are great for your initial search and learning what homes are selling for in your desired area but finding a local Broker that is familiar with the area you are looking in is much more beneficial. They should meet with you, discuss your likes and dislikes in a home, prepare several homes for you to look at in your qualified price range and then your search begins to find “Your Dream Home”.
5. Bank Owned Properties or REO’s as your Broker will call them or Short Sales VS. A Standard Sale – Bank owned property vs. Standard Sale. A Bank Owned home for sale can be a bit more complicated and time consuming for a First Time Home Buyer. Keep in mind that you are not dealing directly with the bank but a negotiator that does not have the authority to make immediate decisions which can cause the negotiating process long and drawn out. The process from writing an offer, counter offers and maybe an acceptance a 3-10 day process. Patience are necessary when dealing with an institution sale. When writing an offer on a standard sale the listing agent is working directly with the seller which will make the negotiating process very quick from offer, to counter offer, acceptance and opening escrow, typically a 1-3 day process.
6. Writing An Offer – Before your agent can write an offer you must receive a pre-qualification letter from your lender, a copy of a check made out to the requested escrow company and proof of funds that your down payment actually exist. You and your Broker will discuss the value of the home, that you are writing an offer on, according to the past sold homes in the area. Usually within the last 2-3 months and within a 1/2 mile radius of the home you are writing the offer on. Once you have determined the value of the home your real estate broker will write the offer and submit it to the listing agent. After the offer has been received and presented to the seller, the seller may request their broker to create a counter offer and the negotiations will begin.
7. Negotiations – After writing the offer and the offer has been submitted to the seller, the buyer will wait for a response from the seller. Through the negotiation process many aspects of your original offer can be countered, whether it is price, terms etc.
8. Acceptance – After the terms have been accepted from your offer the contract will be signed by the buyer, seller and both real estate broker/agents. It is not until bother buyer and seller have signed the contract is it fully executed and accepted.
9. Your offer is accepted & Opening Escrow – Once your offer has been accepted a buyer will send their earnest money deposit to escrow, the escrow officer will open escrow, escrow instructions will be typed and sent out to all parties to be signed.
10. The Escrow Process – the escrow officer is a neutral party. Their job is to be sure the earnest deposit is received, typed escrow instructions, all paperwork has been completed by buyer and seller, contact and work closely with the lender, title company and prepare for loan documents to be received, from the lender for signing and prepare to close escrow.
11. Close of Escrow – Upon confirmation of the close of escrow your real estate agent will gather the house keys and turn them over to the new owner. It is always recommended to change the locks to your new home, there are many keys that could be floating around from the home owner, family members, renters etc.
12. Broker VS. Agent – Experience the Difference! A real estate agent is licensed by the Bureau of Real Estate. A Real Estate Broker is also licensed by the Bureau of Real Estate but is required to have 2 full years of real estate experience, attend a total of 8 real estate courses, if working independently and own their own company, they will be required to purchase E & O insurance and liability insurance. A Real Estate Broker has much more experience and education than the average real estate agent. So with that said always ask if the agent your working with is a real estate agent or if they have a real estate Brokers license. A real estate Broker is much more valuable to represent you and your transaction.
Keep in mind the process I just described above can vary from transaction to transaction. refer to your Real Estate Broker for any questions you may have.
Below are several loans that a first time home buyer may consider
FHA/ VA 30 year fixed 3.625% with
House Hunter FHA/VA 30 year fixed 3.750%
CALPATH FHA 30 year fixed 3.500%
USDA 30 year fixed 3.625%
Disclaimer: Call for updated rates as they change daily.
“HAPPY HOUSE HUNTING”!