The home buying process explained

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The home buying process

The process of purchasing a home is typically the biggest financial investment that individuals make in their lifetime. It can be an exciting and fulfilling experience, but also incredibly stressful, regardless of whether you are a first-time buyer or a seasoned veteran with numerous transactions under your belt.

Can the process of purchasing a home become stressful?

YES! As a homebuyer, you are not only investing your money but also your family's future. This decision is crucial because this will be your long-term residence. It is common for buyers to experience second thoughts about the property, and I receive numerous calls and texts in the middle of the night from worried buyers.. However, it is human nature to feel this way, and it serves as a protective mechanism to prevent you from making a poor decision.

Fortunately, you can back out of the deal if you change your mind. Typically, buyers are given up to 17 days for an inspection contingency period to inspect the property thoroughly. As your agent, I always aim to have the seller accept a 17-day inspection contingency period into my offers to protect my clients. However, regardless of the inspection period timeline, you will be informed in advance and aware of the allowed time period.

The home buying process, from start to finish.

#1 Contact a Real Estate Agent / Realtor®

The great news is that by being on this site, you have already discovered an excellent realtor who can assist you through the entire buying and selling process. With my knowledge, skills, and experience, I can help you find your dream home and, most importantly, safeguard you and your finances throughout the entire process.

#2 Pre-Approval ( Skip if paying cash )

It is essential to note that pre-qualification and pre-approval are two distinct terms, although they are sometimes used interchangeably. Pre-qualification is when a lender or bank informs you of the amount you can potentially be approved for based on the information you provide. This is a soft check where the lender does not gather any physical evidence.

On the other hand, pre-approval is a letter from a bank or lender stating how much they are willing to lend you. Before giving you a Pre-Approval Letter, the bank will likely gather evidence in the form of credit checks, bank statements, and pay stubs. This letter is crucial since listing agents and home sellers will only take your offer seriously if you have a pre-approval letter.

In summary, pre-qualification is an estimation of what you can afford, while pre-approval is a firm commitment from the lender to provide you with a loan up to a specific amount.

#3 House Hunting.

Now that you have your pre-approval ready, we can start looking for homes in your price range. But before you begin searching on popular home listing websites, keep in mind that these sites can sometimes be inaccurate and slow to update. They may even show homes that were sold months ago. In a competitive market, it's important to have access to the most up-to-date information as quickly as possible. That's where the Multiple Listing Service (MLS) comes in. The MLS is a tool used by real estate professionals to find and sell properties, and it provides the most accurate and timely information about available homes. To gain access to the MLS, you'll need a real estate agent to set you up on the service. Once you have access, you'll receive newly listed homes right in your inbox moments after they become available. Give me a call, text, or email, and we'll be happy to set you up on this service for free.

#4 The Offer / Purchase Agreement.

Congratulations, you've found your dream home and now it's time to make an offer! This is a crucial stage in the home buying process, and having a great real estate agent by your side is essential. An offer is not just a simple statement of how much you're willing to pay for the property; it's a legal document that outlines the terms and conditions that you'll be expected to follow. Therefore, it's essential to take it seriously. If your agent is not well-versed in the details of this document, it could end up costing you a significant amount of time and money. So, make sure you work with a knowledgeable agent who can guide you through the process and protect your interests.

How can I make my offer more competitive and appealing to the seller to increase the chances of it being accepted?

To make your offer stand out from the others, I spend a significant amount of time combing over it to ensure that it's flawless and that all required documents have been attached in the order requested by the seller. It's crucial that your offer is well-written and free of errors. As an experienced real estate professional who has worked with both buyers and sellers, I understand the frustration of receiving poorly written offers. When I work as an agent for a seller, it can be disheartening to see a buyer's offer rejected because the seller and I don't trust the buyer's agent to handle the transaction professionally. That's why I take great care in preparing offers that are not only complete but also persuasive, helping you as my client stand out and increase your chances of getting the property you desire.

Imagine you're selling your home, and you have two offers in front of you. The first offer is flawless and well-prepared, with a summary of the terms in the contract, a bio of the family who wishes to live in the house, and all the required paperwork to prove that the buyer is able to purchase the property. The second offer has several mistakes, is missing some documents, and it's clear that the buyer's agent didn't take the time to review it before submitting it. Which offer would you choose? It's an easy decision! I cannot emphasize enough how crucial this step is. It's the make-or-break moment in the home buying process!

#5 The offer has been accepted, and escrow has been opened.

Congratulations on finding your dream home and having your offer accepted! Now that escrow has been opened, it's important to understand its role in the home buying process. Escrow is a neutral third-party service that collects and disburses money and documents to ensure a smooth and safe transfer of ownership. Within three days of opening escrow, you'll need to wire your earnest money deposit, which is typically 3% of the purchase price, to demonstrate your commitment to the purchase. However, most contracts have contingencies that allow you to back out and receive your deposit back, though some fees may apply. Escrow typically lasts 30-45 days for buyers with loans and 10-30 days for cash buyers, from start to finish.

#6 Inspection and Appraisal

This is a critical time in the home buying process where things move quickly. Whether you're a loan or cash buyer, you have the option to hire an inspector to check the property for any hidden problems that could cause future expenses. Common issues include foundation cracks, tree roots in sewer pipes, improper electrical work, unpermitted home extensions, pinhole leaks in water pipes, and pest infestations. It's important to assess the severity of any problems and determine if the seller is willing to address them, as they could potentially hold up loan funding. Keep in mind that inspectors often find something to report, even in newly constructed homes.

The lender usually requires an appraisal to determine the actual worth of the property being purchased. This is a protective measure for the lender in case the borrower defaults on the loan. If the appraisal value comes in lower than the offered purchase price, you have three options: negotiate with the seller to lower the price to the appraised value, cover the difference with your own funds, or terminate the deal if you have an appraisal contingency in place. As your real estate agent, I will work hard to negotiate with the seller to lower the price to the appraised value.

#7 Loan approval

The loan approval process can be a stressful part of the home buying journey, so it's important to choose a hardworking lender you can trust. If you don't have a preferred lender, I recommend considering Ryan Shultz from New American Funding and Thomas Cychner from C & S California Capital. Alternatively, you could visit your local bank or credit union. The loan will be approved once all the terms and conditions are met, and the underwriter has reviewed and approved the loan to be funded. Once approved, the bank will wire the loan money directly into the escrow account.

#8 Recording

The property recording process is the final step in transferring ownership of the house to you. Once all the funds have been received and all conditions have been met, we are ready to record. The recording confirmation is typically received within one to two days, although in certain circumstances, it can be expedited. It's important to note that until the recording is complete, the house does not officially belong to you. After we receive confirmation, I will be delighted to hand you the keys to your new home!

While every real estate transaction is unique and unforeseen issues may arise, the information provided on this site is for informational purposes only and should not be considered as legal advice. For any legal or tax advice, it's recommended that you consult with your lawyer or certified public accountant.

As part of my commitment to providing excellent service, I offer a third-party legal service that's free for you to use, whether you decide to use it or not. This service is available through the Real Estate Risk Management ( website.

If you have any questions or need assistance with your real estate needs, please don't hesitate to contact me directly: Christopher Hysell (626)594-6061