1. OBTAIN YOUR CREDIT REPORT

You need to get your hands on your personal credit report and review your history. Look for any errors, discrepancies and potential problems. Give us a call and we'll get it for you free of charge; we go over it with you and provide recommendations.

2. START WITH A LENDER — NOT A REAL ESTATE AGENT

After you have a credit report on yourself, you need to obtain a "pre-qualification loan certificate;" this document is available in your "Right Home Buyer's Package." One of our loan specialists can help you pre-qualify for a loan. This will help you to determine how much house you can afford to buy. Usually, the lender will lock-in a loan rate for 30 to 45 days on such certificates, thus guaranteeing the monthly payment schedule based upon the information you have provided. "Loan Certificates" give the buyer a much better idea of what you're getting into and they also put you in the category of being a "serious buyer."

3. SHOP CAREFULLY

Once you have a loan certificate, you can visit as many real estate offices as you like. You're in the driver's seat! Agents will always attempt to direct you to their own listings first, and those homes do not always represent the entire market in any one area. So visit more than one real estate office. Our home specialists would gladly help you in this process as well.

4. INSPECTIONS

Never agree to buy a home without a detailed termite inspection—and—a home inspection by a certified home inspector. Home inspectors are not licensed, so look for one that is a member of the California Real Estate Inspectors Association (CREIA). CREIA inspectors are trained and have to pass a rigorous examination to become certified. They are on the Internet and you can find them located in our Links page! Also, you need a termite inspection (make sure the foundation isn't eaten out), and a roof inspection (don't get flooded out!)

5. ESCROW

Once you find your home, you will open an escrow. Any special instructions on your part must be included in writing in the escrow document, or they don't count! You should wish to include such things as repair or replacement of any damaged areas of the home as identified by the home, roof or the termite inspector. Agreement to repair or replace can be either by the seller, or by the buyer based upon a price reduction to accommodate the expense of the repair. Our in-house escrow officers are available to process this aspect of your home-buying experience as well.

6. ENERGY

Buying an older home? Get the EEM! You can borrow an additional $5,000 to $8,000 in extra money to make your older home energy efficient, and this will not affect your credit worthiness for the principal loan. Most important, the EEM will usually save you more money through reduced energy bills than it will cost you. Call our office for questions and help.

7. INSURANCE

Shop your homeowners insurance early. California has suffered an insurance drought due to earthquake insurance requirements. Most buyers don't even bother to request earthquake insurance anymore—too expensive. That is up to you. But remember, finding regular homeowners insurance can take you a full 30 days. Call us if you're having problems; we may be able to help.

8. THE OFFER

When you make an offer, don't worry about the asking price; always offer less and expect to negotiate a price. Offers and counteroffers are the norm these days. By shopping more than one house in a given area, you should have a better idea of what might be fair. Remember: Real estate prices are still fluctuating and the asking price is always high!

9. TERMS YOU SHOULD KNOW:

• a. ARM—Adjustable Rate Mortgage: A mortgage rate that can fluctuate periodically. Normally these are capped at 2 percent a year and are not more than 6 points above the starting point.
• b. Fixed-rate mortgage: a loan that carries an unchanging rate of interest over a specified term.
• c. Binder: an earthly agreement to buy a home from a seller, which is ensured with earnest money.
• d. Commitment letter: a written promise from the lender that you will receive a mortgage of a specified amount at a specified rate.
• e. Conditional offer: an offer to buy property under certain circumstances.
• f. Escrow: the process in which you deposit money with a third party who holds it until the deal is final.
• g. Point: a one-time only fee you pay upfront to your lender, sometimes in exchanged for a lower mortgage rate.

 

Visit our Resources area for links to companies or organizations that provide services and information that you may need.