Buying a property can be very exciting and mostly overwhelming at times. There are lots of information out there to process and need an advise of an experienced real estate agent. Here’s a couple customary steps you need to do in order to be in proper footing and to be ready in the housing market:

a) Obtain a pre approval letter to your preferred bank. This usually takes 40 minutes to an hour assuming you brought your completed personal documentations on hand. If you don’t have one, I have lender partners I can recommend. Your loan agent will give you various mortgage options that will meet your financial needs.

Bring the following copies to your bank:
1) Last 2 years W2
2) Last 2 years Tax Returns
3) Two (2) month’s bank statements
4) Two (2) month’s pay check stub

b) Request a DU Approval (Desktop Approval) from your lender. This is more in-depth than the pre-approval letter. I always recommend using this along with my property offer packet as it conveys (from a seller’s standpoint) a commitment with your lender that you have initially “passed” their basic underwriting requirements and is fully ready to make an offer. This gives us a competitive edge over others when presenting an offer to sellers.

c) Define your needs. Determine your preferred city or areas of interest. Location, location and location. Buyers value location depends on proximity to school and work, business facilities, community amenities and other factors. Communicate the minimum number of bedrooms, bathrooms, garage, year built, etc.

d) Start the house search. In looking for properties, sometimes, buyers become very idealistic. I always tell my clients to be open-minded and be flexible. Majority of properties in California are built in 1960’s or earlier. Do not look at age! Look at the potential of the property once it’s been remodeled. Many of the properties are occupied. Designs may not be to your liking, and worse may look & smell unpleasant. Imagine an empty house and visualize putting in your own interior design to your future home. In many cases remodeling a house need not be expensive and does not require to be done by the buyer immediately case to case basis. In certain cases during the transaction, your lender may require to repair an area/s in the property if this is will affect health & safety of the future occupants before closing of escrow. Also, lenders may require to clear section 1 of the termite report as this is a major health & safety concern for future tenants. Section 1 means there is infestation of termite & fungus. To clear this section, a chemical is plotted to the infected areas which takes at least 30 minutes to a day depends on the gravity of the infestation.

e) Make an offer to seller. In making an offer, be reminded that the market is very competitive, meaning there can be multiple offers that seller/s can receive. In a multiple offer situation which is very rampant in this current market, sellers can counter offer one or all offers received. Counter offers sent out to buyers’ agents need be replied back to the sellers usually the next day. There is a deadline indicated in the counter offer form received. In a multiple offer situation, buyer’s acceptance of the seller’s counter offer does not constitute a contract. Each counter offer sent out by the seller’s agent can either be different or identical. When making an offer, please make sure you as the buyer is decided that you like the property and steady to move forward once seller accepts our offer.

f) Ratify the contract. Sometimes the listing agent may verbal our acceptance to the offer thus we need to wait for the ratified contract. Once we have the contract, day 1 starts and we have to start working. There is a contingency period that you & I along with your loan agent need to work on that time frame to do the following:

a) Property inspection / Investigation

a.1) Termite Inspection by a professional (Fee of $150 – 300 depends on size of property)

a.2) Property Inspection by a professional ( Fee of $300-500 depends on size of property)

b) Full loan approval from buyer’s lender if financing

g) Open and close escrow. We send in the ratified contract to a trusted & experienced title company. An escrow number will be opened for this transaction. The title company is a neutral party who makes sure all deadlines are met and all parties follow what is stipulated in the contract. Buyers must send in their earnest money deposit (EMD) to title immediately. Below you’ll find pertinent information and videos about the escrow process.

What is Escrow? (video) What is Title Insurance? (video) What to look for in a Title Company (video)
California Buyer & Seller Guide to Escrow All About Closing Closing Cost Check List
Guide to HUD (closing statement) Closing Process Smooth Closing

h) Renegotiating with sellers. During the contingency period particularly after doing a thorough property inspection, we may find areas that need repair either on a personal standpoint or if your lender requires it to be repaired prior to close of escrow, then we may ask seller to assist us with the repair. That’s where my negotiation skills come in! Be reminded due to changing housing market, sellers may or may not accept buyers’ request for repairs and may require a “sold as is” purchase. If sellers decline our request during the contingency period, you as the buyer may decide to either proceed or not proceed with the transaction. Should you not proceed, we must send in a cancellation of contract.

i) Requesting time extension from seller. In some cases that your lender needs more time to get your full loan approval, we need to request an extension of time or extension of removal of contingency from seller. This also addresses needing more time to investigate the property. Request to seller may or may not be granted.

j) Removing all contingencies. Once buyers remove all contingencies, your earnest money deposit becomes non-refundable.

k) Getting keys to your new home. Once title company advises us that new owner’s name has been recorded to the county, you are officially a proud homeowner. You get your keys from your agent after recording is done. Then close of escrow.