Real Estate Agent
Speaking with a realtor before you’re even ready to start looking can help you develop a plan and be prepared. Talk with someone early. Not only can they assist in guiding you where you want to be, they can also help make sure you’re ready when you need to be. Speaking with someone early is a great way to make sure you like working with them! It’s important to feel confident in and comfortable with the person you’re trusting to be at your side through such a major purchase. The last thing you want is to feel stuck with someone you don’t really like because you waited to the last minute! Build a relationship. Lean on their experience.
Buying Agent Fees
NONE! That’s right, as a property buyer you don’t pay your realtor a commission. While there will still be closing costs, lender fees, and inspection fees, paying your realtor a commission isn’t on that list. The seller pays both agents’ commissions. There is nothing to lose by working with someone you trust. In fact, going it alone without someone on your side can cost you thousands.
Financial Planning
This is an important step during preparation, and is something that should be worked out well in advance. If you start looking at homes before you know what you can afford or even having organized your financials, you’re setting up potential heartbreak – or a major headache as you try to scramble to get it ready. Almost all sellers require a pre-approval letter and proof of funds with the submission of an offer. If you’re in a competitive situation, not having that ready can cost you the property.
- Work on your budget. Determine what you can afford in monthly payments. Knowing this from the start will go a long way toward finding the right purchase price. A mortgage, taxes, insurance, HOA dues, and Mello-Roos fees can all contribute to what you might pay month to month.
- Talk to a lender if using one. Speaking to a lender (or a few) early on will set you on the right path toward financial confidence. Compare interest rates, loan terms, and eligibility requirements. Discuss different loan options for your circumstances. A lender can get you prepared well in advance for what you can afford to purchase. They can calculate potential mortgage payments, interest rates, property taxes, and insurance costs, as well as how an HOA might factor in your monthly payment. While online lenders are appealing in how quick and easy they are, they can be misleading at times. They are largely automated based on the estimates of the user. An experienced lender can speak with you directly, tailor a loan to your situation, and look at you individually to make sure you’re on the right track. This is the big difference between a pre-qualification letter and a pre-approval letter and why that matters.
- Prepare documents. This can be a good time to start getting documents ready that you’ll need to make an offer and get your loan approved. Many of these will be requested by your lender, but you’ll also need items like a proof of funds. It’s better to have these at hand than to scramble to avoid missed deadlines.
- Save for a down payment. If you’re using a lender for your purchase, talking with them in advance can give you an idea of what you need to save up for a loan. You don’t always need to 20%! Speak with them so you know your options.
- Save up for closing costs. Closing costs can include escrow fees, notary fees, tax reserves, and lender fees. Again, speaking with a lender or an agent can help you prepare for what additional closing costs you might need to have at your purchase price.
- Save up for additional fees. Additional fees can include a home inspection, moving costs, and appraisal fees. It’s also a good idea to budget how much you’re willing to invest in repair or upgrade costs
- Avoid major purchases. Avoid any major purchases that might impact your credit score or show a sudden deduction in your accessible cash. This can directly impact your ability to get a loan for the amount you want. This includes through escrow until closing!
- Pre-qualification vs. Pre-approval vs. Pre-underwritten. Knowing the difference can add value to your offer and be the difference in getting a property. Pre-qualification letters are often provided by online lenders and don’t involve anyone actively investigating your financials. They are the weakest and most uncertain in terms of purchase price. Sellers and agents are the least confident in these. Pre-approval involves a lender actually investigating your financials to provide a reasonable estimation of loan approval. These are the most common and give a seller more confidence you can a buyer can purchase at the price they offered. Some lenders offer the ability to pre-underwrite a loan. This involves them going through a deep dive and checking all the necessary boxes they would normally do during escrow. It gives the seller the most confidence in your offer and can allow you to make a stronger offer by shortening contingency times!
- Recommendation. We’ve worked with some of the best and most reliable lenders in San Diego. If you’re looking for a recommendation, please reach out! We’d be happy to share a trusted option as you research your lending options. We make no kickbacks or bonuses for referrals. They are just people we’ve worked with and know to be experts and honest.
Wants and Needs
Discuss the things you’d like in a new home and the things you need. Get together a list of those items and talk with your realtor about them. Your real estate agent can provide valuable insight into what is available in your local market depending on location and price point. Research neighborhoods and areas that work best for you. Be flexible and open to change. Market conditions shift and being adaptable can help you find a great property without being frustrated in not finding that ‘dream home’.
Start Your Home Search
Start looking for a new home! Contact us to sign up for free home alerts straight to your email. We will send you an automated search that updates you every morning with new homes on the market in the area and price range you are wanting. It’s easy, and we won’t call you unless you want us to! You can easily respond to any homes that interest you, and we can setup a time to see them. No matter what is on your list of wants and needs, it often changes once you get out to see properties in person. But we’re here to help every step of the way!
Reach out today to let our team help you get started in your home buying process.
