Buying a home shouldn't be so dang scary!

Buying real estate is exciting and terrifying all at the same time.

Buying a home doesn't have to be like a horror movie.

Sometimes simply knowing what to expect...even knowing the worst case scenario will make the entire process less daunting.  Initially, this post may come off as a huge plug for Loan Officers...and I'm not a Loan Officer.  However, initially...that's where the whole thing starts.

Below are a number of common questions that prospective home buyers ask...or...are afraid to ask.

1. Where do I start? ~ Make a new friend: Your Lender. I've said it countless times: "Stop wondering, and start asking." Your lender isn't the 'bad guy." He or she is a, dare I say, far more important part of the purchase of a home than your real estate agent. Yes, your agent needs to watch out for hidden obstacles, and will protect you throughout the home buying process. But without an effective loan officer, you're dead in the water. Pull together a couple of bank statements and your W-2s, and you'll be walking away with your Pre-Approval letter!
2. Typically, what credit score and income level do I need to qualify for a home loan? ~ Answer #1: Ask your lender.  Policies change.  Answer #2: Typically 620 or more will get the job done nicely.
3. Are there loan programs or grants that I might benefit from? ~ YES! With the fear of sounding like a broken record, I'll advise you to ask your lender. There are grants, 0% down programs, First Time Buyer programs, VA/FHA loan programs, etc. 
4. How much do I have to put down; my downpayment?  20%, 10%, 5%, 0% Absolutely. Some buyers put down 100%.  Most of us, however, aren't cash buyers.  Maybe you can afford to put $80,000 down on your home, but you may opt to put down only $40,000, saving the other $40,000 for updates and upgrades!  Maybe you can put ZERO down. Your lender can provide various payment options based on your resources and your qualifications. Ultimately it depends on your position, your needs, your wants, and your budget.
5. Are there additional costs involved in buying a home? Yes there are.  There are often loan origination fees, escrow fees, title fees and title insurance, etc. Typically, in my experience, closing costs run +/- 3% of the purchase price of the house.  For example, on a $300,000 home, your closing costs will typically run around $9-10 thousand dollars.  However, if coming up with closing costs is going to be a deal breaker, the seller may help! Depending on the market, buyers can ask home sellers if they're willing to help with closing costs, up to even asking for ALL closing costs to be paid.  If the offer is strong enough, the sellers' answer is more often than not...YES.
6. How long does it take to buy a home? ~ Sarcastic, yet accurate response: The whole time! Seriously though, typically you can count on 45 to 60 days from looking to owning. It probably won't take more than two weeks to find your home and to get into contract. After that, it's 45 to 60 days.
7. What does my Realtor do? ~ A quality real estate agent will, first and foremost, keep you safe. Anyone can find a home.  Your Realtor ought to, before you find your home, ask the intelligent, lifestyle related questions that will help get to the truth; your actual needs and wants, as opposed to what you 'think' you want or need. They'll negotiate the terms of the purchase contract. They will then guide you, safely and wisely, through the inspection process. Ultimately, they'll oversee the entire escrow process, leaving you with your new keys...and a smile.
8. How much do I have to pay my Realtor? ~ Nothing.  Currently, in the state of California, the home sellers pay both brokers' commissions (which is where the real estate agent gets their paycheck).  How nice is that?
9. What are the most difficult or nerve racking parts of the home buying process? ~ In a typical transaction, the Physical Contingency Time Frame is a bit stressful.  That said, I often tell my clients, "It's only sticks and bricks until it's yours. Lets make sure you still want it after the experts kick the proverbial tires and look under the hood!" Home Inspection, Pest Inspection, any any other inspection can be a stressful time frame for both parties, but it's a necessary process if you want to protect yourself.  Another stressful time can be waiting on the appraisal. An appraisal NOT "coming in" at the value you wanted, or a home's value not matching the contract price can be a mixed blessing.  As often as not this is a worry that we really don't need to worry about. 
10. Is there anything else I should know before I go too much farther? ~ Yes!  Let the experts be the experts.  You will become an integral part of a massive team of experts. In typical order, it will look like this. Lender, Realtor, Escrow Officer, Title Officer, Inspectors (2 or more), and Contractors. I always advise my clients to  "Let the experts be experts." They know what to do better than we do.  

Until next time.

 

Andy Blasquez  Cell ~ 909.539.3292
BRE#01826135
E-mail me on Andy.Blasquez@gmail.com