PHA Realty's Guide for First-Time Homebuyers in California
Although most people are excited about becoming homeowners for the first time, it's just as easy to feel vulnerable and overwhelmed. Many first-time homebuyers feel disillusioned and believe that home ownership is beyond their grasp, but often they simply don't have the facts and just need some help getting started.
We've created a step-by-step guide to walk you through each aspect of the homebuying process. Take some time to get yourself acquainted with these steps. Doing so will give you an excellent opportunity to determine whether you're ready to buy. And when you are ready, we're here to provide you with the knowledge and tools that will allow you to enjoy this immensely rewarding experience.
Step 1 - Analyze Your Finances
The right home for you is the home that meets your requirements and is in your price range. Many renters are often surprised by what they are able to afford for the same amount as their monthly rent payment. How much money are you throwing away each month on rent? With the right tools and guidance, you could be putting that rent money towards ownership of your new home.
What is Your Price Range?
In order to begin your search for a new home you'll need to take an honest and objective look at your finances. This will allow you to determine what you can afford and whether you are ready to buy. The amount of money you can dedicate to your new home purchase will define your home search and will prevent you from wasting costly hours looking at homes that aren't right for you. Feel free to try out our handy mortgage calculator tool, which will help you get an idea of what your monthly mortgage payments could be. Unless you're paying all cash for your home purchase, at this point you're definitely going to need to speak with a lender and a Realtor.
Step 2 - Seek Professional Guidance
With proper guidance from a real estate professional at PHA Realty you'll be able to fully understand the journey you are embarking on. However, many first-time home buyers are often confused about the role the agent plays and what it will cost them.
Won't I Pay More If I Hire an Agent?
When it comes to helping buyers locate their new home, real estate agents face a number of myths and misconceptions. Many buyers believe hiring an agent will "cost them more" than if they didn't hire an agent, or that an agent will try to push them in to purchasing a home they don't really want or can't afford. Simply put, buyers do not pay extra to have an agent representing them, that's because the commissions are already included in the listed purchase price. This means that the commissions are paid from the Seller's proceeds on the sale. If that's a little confusing here's our infographic "Who's Who (and who pays for what) When Buying a Home" which describes the advantages of buyers having their own representation and who it is who really wins if the buyer doesn't have an agent.
You Are Our Greatest Asset
At PHA Realty our goal is to get you into the home you want, the home you can afford, and the home you'll be happy with 5, 10, or 20 years from now. Our agents will walk you through all the steps to California home ownership, discuss your goals and plans for the future, help you determine your financial options, and most importantly, our experienced agents will be there to answer any questions you have with your interests as their highest priority. And remember- your agent doesn't earn a commission until you purchase your new home. So the only thing you have to lose is our free advice, expertise, and experience. You don't even have to take our word for it, read and watch what our past client testimonials for the full story.
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Step 3 - Get Pre-Approved
Now that you've got an experienced California real estate professional at PHA Realty on your side, it's time to show that you mean business. That means getting pre-approved by a mortgage lender or other loan consultant. Based on the information you provide, a professional that specializes in lending will be able to determine what you can afford and will provide you with a letter stating the amount of the loan they believe you will qualify for. We will use this to determine the homes in your price range and it will prove even more useful when we begin to negotiate the sale price with the Seller.
In California Real Estate, No Pre-Approval Means No Offer
California is quite possibly the most competitive real estate market in the entire country. Regardless of where you are buying in the State of California there will probably be other offers being made along with yours. It's simple, if you haven't gotten pre-approved with a lender yet, then you aren't serious about buying yet. That's what the listing agent will think especially when all the other offers are pre-approved.
Pre-approval is a free service (though you may have to pay for a credit check) and does not require any obligation or commitment to a particular lender. PHA Realty has many close working relationships with many qualified loan officers who can assist you with the pre-approval process. Just ask and we can recommend hardworking individuals or companies who have consistently delivered outstanding service to our clients.
Step 4 - Your California Home Search Begins
You may have already used our MLS property search tool to start your new California home search but now, with a clear understanding of what you can afford and what you're looking for, it's time for us to actually find your new home.
Make the Property Search Tool Work for You
As a registered user, you have the ability to save different search settings and results, and when you find homes you like you can quickly and easily add them to your favorites. This allows you to easily return to the properties that piqued your interest, and more importantly, it also allows us to see what you've been looking for and what you've found. We then use this information to highlight comparable homes and even send you updates when new homes are added to the listing service that are similar to your searches.
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Get to Know the Neighborhood
It's important for you to visit the neighborhoods you're looking in even before you actually attempt to look at specific homes there. Preview homes by driving the surrounding neighborhood. Look at the condition of the other homes and get a feel for the distances to amenities which may be important to you. If you visit the neighborhood and realize that it takes too long to get to the freeway from this area, which is too much of a burden because you already have a sizeable commute, well then homes in that neighborhood are not right for you and now you know to visit and search neighborhoods that are more convenient. Often times it's the little things that are easiest to miss, so it's best to try and cover your bases.
Get yourself started by checking out the variety of California communities we serve:
Tour Your Favorite Homes
Once you've compiled your favorite homes in your choice neighborhoods it's time to tour some homes. Your agent will be happy to schedule viewings and will have researched any additional information about the property, seller, or neighborhood that will assist in your decision. When viewing the home your agent will discuss the property with you including what other homes in the neighborhood have been selling for and may suggest comparable homes to go and view as well. Since you know what you're looking for, how much you want to spend, and you have an experienced PHA Realty agent on your side, we're confident it won't be long before you find the home you're looking for.
Step 5 - Make an Offer
So we've found the home that's perfect for you, now all we need to do is get you the best price possible. After consulting with you, your agent will prepare your Purchase Offer and present it to the seller. The offer will state the price you are willing to pay and declare any contingencies that require completion before you will purchase the home. This can include anything from repairs that need to be made to the property to the determination of who will pay for the various closing costs. It is important to note that the Purchase Offer is just an offer, not a contract. Even if the seller accepts your offer there is no contract until you sign and provide the seller with your "earnest money" deposit. This deposit is your commitment to the seller in order to secure an offer to buy the property.
It is rather common to receive a counter offer and if you do your agent will thoroughly discuss all the details of the new offer with you so that you can determine whether to accept, reject, or even counter the counter offer. In many cases the deal just needs to be tweaked ever so slightly so that both parties are content. In other cases the counter offer is so outrageous that it is best to simply reject the offer and move on. Either way your PHA Realty agent will help you determine the best plan of action based on your unique situation.
Step 6 - Do Your Due Diligence
Once the seller has accepted your offer, we are officially "in contract" and you are on the fast track to owning your new home. This can be a hectic time full of phone calls, paperwork, deadlines, and unexpected problems. It is also when you'll be most thankful for your real estate agent's guidance and experience. As your agent will tell you, this is your chance to thoroughly inspect the property and any seller disclosures about the property to make sure all your demands and expectations are being met. During this time you'll have plenty of questions as you'll be signing a number of different documents. Our real estate professionals understand that dealing with these obstacles can be confusing, time-consuming, and even quite costly. Your agent is your ally and is there to make sure you know what you're signing and why, and to guarantee the process goes as smoothly as possible. Together, you and your real estate agent at PHA Realty will work through the various tasks needed to confirm your loan, obtain insurance, and complete the contract.
Step 7 - Close the Deal
Once your PHA Realty agent has helped you navigate the rough waters of the contract period you're almost in the clear. As you near the closing date, having cleared all the contingencies and with the conditions of the Purchase Agreement met, you will sign the loan paperwork and closing documents. You will deposit the balance of your down payment and any closing costs to escrow. Your lender will deposit the balance of the purchase price and when everything is in order the deed will be recorded at the County Recorder's Office and you will take possession of your new home.
Step 8 - Move In
This is the most exciting and simplest part of the whole process. All your hard work has finally paid off. This is the one stage of the process that you won't need your PHA Realty agent to help you with.
Congratulations on Your New California Home!
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