What do I do first? Before looking for a home, it is important to get pre-approved by a lender to determine your price range, down payment amount, and estimated closing costs. Lenders use different variables including income, debt load and credit scores to determine how much a potential buyer can take out as a mortgage. It is important to decide if you are comfortable with the amount you will be paying monthly at the price you’re qualified for.
How much will my REALTOR cost? Most people think they have to pay a sales commission. The truth is this: only the seller pays the commission. Whether a buyer uses an agent or not, the seller still pays the commission, so buyer agent’s services are free to the buyer!
What is the pre-qualification and pre-approval?
- Pre-qualification is an informal process to see how much you may be able to borrow. It can be done over the phone without documentation by telling a lender your income, debts, and an amount you can provide for down payment.
- Pre-approval is when a lender gives a commitment to lend the money after assembling financial records from you. It is the most accurate and could save you lots of time. It also shows sellers you are serious about buying.
Where do I find a loan? I recommend that you consult with several lenders. Every lender offers different interest rates and fees, and those can impact your monthly mortgage payment. By shopping with different lenders you can find the best possible deal and the person you most enjoy working with. Consult different types of financial institutions, including mortgage brokers, credit unions, savings and loans, traditional banks and government lenders. I can recommend several lenders who I’ve successfully worked with and deliver great customer service and knowledge. There are pros and cons to working with a bank vs a non-bank lender. Ask me if you’d like more information.
What is a foreclosure and a short sale?
- A foreclosure is the last resort for a homeowner when they default on their monthly mortgage payments. The bank or lender initiates foreclosure procedures and eventually repossesses the property. The bank now owns the property and must try to sell it. A foreclosed home is basically the same process and time frame as purchasing a standard sale home but you are purchasing it from a bank instead of a person and the bank doesn’t have as much information about the history of the home.
- A short sale happens when a homeowner finds themselves falling behind on their mortgage payments and they are sure they will not be able to catch up. Instead of foreclosing, they will try to sell the property for less than the mortgage amount owned. The homeowner will need to get the approval of their bank or lender. Not all lending institutions agree to short sales as they lose out on the total sale price. When a buyer has found a short sale home they want, they must place a bid which will be submitted with the rest of the paperwork to the lender. When the bank or lender decides that all is in order, it will withdraw whatever liens have been put on the property, and the sale can go through. There are many issues that could arise during this process and it can take anywhere from 30 days to a year.
- Foreclosures and short sales can be purchased at below-market rates, but sometimes the condition of the house, outstanding taxes, or timeline can be a downside.
Will you inform me of homes for sale from all companies or only RE/MAX?
I will keep you informed of all homes. I want to help you find your perfect home, which means I will stay on top of every home that is available on the market. I am able to show you homes through out San Diego and Riverside County. If you’re looking anywhere else, I can still help through a referral to another agent and will stay involved through out the process. I can help you through out the U.S. and in 98+ countries.
Can you help me find new construction homes?
Yes, I can work with most builders and get the information you need to make a decision. On your first visit with the builder, I will accompany you. By using my services with a new construction home purchase, you will receive the services I offer, as well as those provided by the builder which means you’ll have two sets of eyes on everything and my support ensuring your goals and needs are met.
How does for sale by owner (FSBO) work? Can you help with them?
Homeowners trying to sell their home without agent representation are usually doing so in the hopes of saving the commission. If you see a FSBO, let me contact the owner for you and make an appointment. Most times the homeowner will work with an agent even though their home is not listed, since the agent is introducing a potential buyer to their property. That way you will be protected through my representation and I’ll make sure they complete all necessary forms and disclosures so you’re well informed.
What are my expenses to buy a home?
Here is a quick breakdown of expenses:
1.Deposit. Within 3 days of opening escrow, you will deposit ~1-2% of the purchase price into escrow. We will agree to the amount when writing the offer. This will go toward your down payment at closing.
2.Inspection and appraisal. Depending on the square footage of the home, you can expect ~$400 each. It is good to budget $1,000 total for these. Some lenders pay the appraisal cost upfront and you will pay them back through closing costs at the end of escrow.
3.Repairs. If the seller is not willing to pay for repairs or there are smaller items you decide to do yourself.
4.Closing costs and remainder of down payment. Closing costs are ~3% of the purchase price.
What is Title Insurance? Title insurance protects against defects such as prior fraud or forgery that might go undetected until after closing and possibly jeopardize your ownership and investment. The cost varies, depending mainly on the value of your property, but the important thing to remember is that you only pay once.
What is Escrow? Escrow is the process of having a neutral third party manage the exchange of money for real property. In the home buying process, escrow opens when the buyer and seller sign a purchase agreement and the buyer puts down a deposit. Escrow protects all parties involved by making sure that no funds or properties change hands until all conditions in the agreement have been met.