How do you go about purchasing a home? What are the costs involved? What happens after your offer is accepted? What can you expect?

Do any of these questions sound familiar?  Don’t worry — you’re not alone. Buying your first home is a big step. After all, it’s probably going to be one of the largest purchases you’ll ever make. I also know from experience it can be a little stressful too. Let’s go over the process step by step, and I promise, once you know what to expect, it’ll make the home buying journey all the more enjoyable. Come on — let’s get started!

Getting A Loan and Finding A Realtor

In “home buying 101,” the first thing you must do is get a loan. You have to have money to buy anything right?  It’s no different when buying a home, so ask a friend, Google a lender or ask your realtor who they would recommend and find a lender that you feel comfortable and confident with. The lender is going to take a look at your income, debt and credit score to see what you qualify for. Once you are qualified you are almost ready to go shopping. You’re just missing one thing… a real estate agent! There are so many reasons to use a real estate agent, but that’s another post. Where and how do you find a realtor? The same way you found your lender. Ask a friend for a referral, Google a realtor or ask your lender who they would recommend. Your real estate agent is paid for by the seller, but some agents do ask the buyer to cover some of the cost as well. Make sure you ask before you start looking. Okay, now you are ready to go shopping!

Related: Five Signs It’s Time To Lower Your Price – Tracey’s Real Estate Tip Of The Week

Finding The Perfect Home

Knowing what you want and need is the best way to begin your home search. You’ll need to decide what area, how large of a home do you want/need, do you prefer a condo or single family home and so on. Knowing this before you start your search will help tremendously; otherwise you’re just spinning your wheels, wasting you and your realtor’s time. Be clear on what you are flexible with and what is an absolute “must”. A “must” could be a particular school area, and a “want” could be a swimming pool. Take a moment to think about what matters most to you in a home.

Submitting Your Offer

You found the perfect home and you don’t want to lose it. So how do you decide what to offer? Your realtor will provide a list of comparable homes that have sold within the area. These are homes that have sold within the last three months and have similar square footage and upgrades as the home you’re looking at. If the comparables support the list price, then submit a full price offer, or if you are willing to take a chance of losing the home, then submit a lower offer. If you’re thinking the seller will just counter you back, be careful. Yes, they may counter you back, but in the mean time, they can also still accept other offers. So you’re taking a chance. Listen to your realtor — they will be able to advise and educate you on what’s best for you and your situation. Ultimately, a home is worth whatever a buyer is willing to pay.

Opening Escrow 

Once your offer is accepted, you will need to deposit with escrow your Earnest Money Deposit. You have three days once the contract has been fully executed to get your money into escrow. How much should you put down for your Earnest Money Deposit? A general rule of thumb is 3 percent of the purchase price. This amount is flexible, so again, ask your realtor what they would advise.

Disclosures

Within seven days of the fully executed contract, the seller will give you their disclosures. Disclosures do just that — they “disclose” a number of items about the property, from repairs that have been done to whether they had pets in the house. Look them over carefully, ask any questions and once you’re satisfied, sign and give them back to your agent.

Inspections

Normally you will do a home and termite inspection, but in some cases, you may do additional inspections, depending on your situation. An average home inspection costs approximately $400, depending on the size of the home, and is paid for by you, the buyer, directly to the inspector. The termite inspection costs approximately $100 and is negotiated between you and the seller in regards to who pays. Normally the listing agent will order this. You have 17 days to do all of your investigations of the home. After that, you will be asked to remove your inspection contingency.

Repairs

If there are any repairs that need to be done, you will then submit a Request for Repairs. This will open negotiations with the seller, who may or may not agree to do any of the repairs. They may instead do only some of the repairs, or will offer you a credit to your closing costs in lieu of repairs. If no agreement can be made, the contract may be cancelled.

Appraisal

Your lender will order the appraisal usually right after you have opened escrow. This fee is also paid up front and usually runs approximately $550. After 17 days, you will be asked to remove your appraisal contingency.

Loan

After 21 days, you should have full loan approval and you will be asked by the seller to remove your loan contingency at this time.

Final Walk Through

Five days before the close of escrow, you will do your final walk through. This is to make sure the home is in the same condition as it was when you first submitted your offer and to confirm all repairs that were agreed to are also done. If they aren’t, then you can hold closing until an agreement is reached. 

Funding and Recording

Here in Santa Clarita, when buying a home, your loan will fund on one day and then the deed will be recorded the next. Once escrow receives confirmation of recording, the home is legally yours!

Close of Escrow

Congratulations! You finally get the keys to your new home!  Normally you will receive the keys on or before 6 p.m. the day escrow receives the confirmation of recording. Sometimes sellers do ask for a close of escrow, plus additional days to move. This is negotiated when you submit your offer.

That’s it! You can now go out and confidently purchase your first home. There will always be additional questions along the way, and your realtor will be more than happy to answer them. After all, that’s what we’re here for!

Tune into KHTS AM-1220 every Friday at 8:40 a.m. to hear more on Tracey’s Real Estate Tip of the Week!

About Tracey Hampson and Tracey’s Real Estate Tips:

I have had the pleasure of living and working as a realtor in Santa Clarita and the surrounding areas for more than 14 years and I love sharing real estate tips with others. Throughout my Santa Clarita real estate career I have had the privilege of assisting buyers and sellers of Santa Clarita homes with their individual real estate needs. I’m here for you as well.

I hope you enjoyed my real estate tip of the week and if you have any questions, concerns, wants or needs regarding real estate please don’t hesitate to contact me. I’m here to help.

Tracey Hampson
Century 21 Troop Real Estate
License 01429142
(661) 993-6124
Thampson@Troop.com