Step by Step Guide to Buying
Step 1 – Get Educated
Home-buyer education is one of the most important parts of buying a home. Because buying a home or navigating any real estate transaction is quite often one of the largest investments any individual will make in their lives, it's paramount that buyers take the time to educate themselves to ensure they will make the right investment decision. Fortunately, the LA Homes team has created several resources for your perusal.
The Internet: the internet offers a near-infinite amount of knowledge for home-buyers to educate themselves with. Almost all real estate questions can be answered online, though it's important to cross-reference any results to ensure that what you've learned is both timely and accurate.
Libraries and Bookstores: Millions upon millions of books exist in the world, and of those, plenty can be found on real estate. Stop by a bookstore to pick up some more information to broaden your real estate knowledge, though take steps to ensure the book contains new and relevant information, and that it discusses your country or area, as laws sometimes vary drastically from location to location.
Meet with your Real Estate Agent: By booking a meeting with an LA Homes real estate agent, we can fill in any blanks in your knowledge or answer any questions you have about your previous research. Agents can offer insight into the current Los Angeles real estate market and how it might affect your current home-buying situation.
Step 2 - Initial Meeting or Consultation
Once you've selected an agent to work with you in purchasing a Los Angeles home, it's prudent to schedule a sit-down meeting to discuss your needs in relation to buying a house. The more our expert agents know about your circumstances, the better they will be able to represent you when searching for the best home for your needs.
Once you and your agent have assessed your situation, you will be able to identify your goals and determine an appropriate action plan moving forward.
Step 3 - Determine Payment Method
When it comes to financing a real estate purchase, there are countless options available for even the most unassuming buyer. It's good to know in advance how you intend to pay before you get too involved in the househunting process. There are three main sources of financing:
Traditional Banks: If you have a strong rapport with your current bank, being a member with them can ensure you get fair terms on your mortgage.
Mortgage Brokers: Brokers have the most options when it comes to finding an appropriate lender. They can access most of the major banks and many other lenders as well. This ensures that they are a powerful option when trying to find the best loan for your specific situation.
Creative Financing: The options with creative financing are endless and great for investing, or alternatively if you cannot access a mortgage through the banks or mortgage brokers.
Step 4 - Start the Search
This is where the excitement kicks off. You've taken the time to research, and you know what type of home you want, what price you can afford, and what your options are with regards to neighborhood and other variables. A property search will be set up to notify you of any properties that come on the market and match your specific criteria. Once you've identified a few prospective properties, it's time to hit the pavement and see them for yourself.
At this stage, it's important to remain grounded. Many home buyers can lose touch with their home requirements and wishlists upon seeing properties. Remember the criteria you set for your dream home, and it will be that much easier to pass over the ones that don't meet the standard you set. When you see a home aligned with your home-buying wishlist, you can add it to your shortlist or make an immediate offer.
Step Five - Write an Offer
Once a home has been located that suits your needs, the next step will be to prepare and present an offer. There are a few steps involved in this process.
Property Research: This step involves researching the prior selling history of a home you want and comparing its price relative to the greater market. Building an assessment of current homes on the market and homes that have been recently sold gives buyers most of their firepower in coming up with a purchase offer.
Terms: The terms of a home purchase are clauses that make up a home-buying contract. They have been agreed upon by the buyer and seller and must legally be upheld, or else result in a breach of contract. In addition to standard terms typically included in the contract, you can add in whatever else you need to, however, these are open for negotiation.
Conditions: Conditions are contractual clauses that must be fulfilled before the home-buying transaction can proceed forward. Typical conditions include a home inspection or for a buyer to be approved for financing. The buyer and seller are typically given seven to ten days to fulfill the conditions of the contract, during which the house is considered to be conditionally sold or pending. If the conditions aren't satisfied, both parties can walk away from the contract with no further obligation and no cost.
Deposits: In order to write an offer for a home, a buyer first needs a check and available funds to make a deposit as a show of good faith in a transaction. If the conditions of the purchase are not removed, this deposit is completely refundable, but, after the conditions are satisfied and removed in writing, the deposit becomes the seller's security that you will complete the purchase.
Price: The only negotiable parts of a real estate transaction are the price and the terms. Once the terms and conditions have been have been written into the contract and your property analysis has been completed, you can accurately determine an appropriate offer price. The offer price will be determined based on al variables affecting the specific property.
The Offer Presentation and Acceptance Procedure: After the offer is written and signed, it's the agent's job to present an offer to the seller. This will typically happen one of two ways:
- If a seller is available, the offer can be presented in person or directly to the owner of the home. The listing agent will be there to represent their client. This method is more intimate and more effective as a result.
- Fax the offer. If you do this, you will need to be accessible by phone in order for negotiations to occur. Once a counter-offer is received or the offer is accepted, all parties will need to sign the documents.
Step 6 - Satisfy the Conditions
Once a purchase offer has been accepted, it's time to ensure you've satisfied the conditions agreed upon in the purchase contract. This process usually requires performing a home inspection, getting personal and property information to your broker or bank, and gathering any other information is required. As Los Angeles real estate professionals, we play a huge role in gathering all the necessary information smoothly and effectively to guarantee that the whole process proceeds as planned.
After all necessary information has been verified, a last decision over whether whether or not to proceed is made, and all appropriate notices will be provided to the seller and their selling agent. Once all conditions are removed, the sale is to be considered a "firm" sale and the property will finally be marked "sold."
Step 7 - Preparing for Possession
Standard possessions take anywhere from 30–60 days, however, they can sometimes be performed much quicker. Get the following items completed as fast as possible to alleviate a large amount of stress.
Lawyers: A lawyer is mandatory for this part of the transaction process. Once a lawyer has been selected, you will need to put together all requisite paperwork prior to your meeting with them. Typically, this is handled by your buyer's agent to ensure everything they need is accounted for. You will be meeting with your lawyer roughly a week before you take possession and you will need to provide your insurance information, the balance of your down payment, payment of fees, payment of any adjustments or taxes, sign documents, and finalize anything else required before you own the home.
Down Payment: Make the necessary arrangements to obtain your down payment if the money is not readily available. You may need to transfer money, cash in stocks or bonds, or move money in another way. It's important to note that liquidating certain assets can take upwards of 30 days, so be sure to consult your bank or broker about this.
Movers: If you're using a professional moving service, be sure to book their services early on. Possession dates commonly fall on the 1st, 15th, or 30th of the month, and movers fill up their schedule very fast. Call ahead and make the arrangements early.
Insurance: When you meet with your lawyer, they will require you to present a copy of your homeowner's insurance, as it is a requirement of the mortgage. This typically involves a phone call or survey, and it can be expedited by having a copy of the listing on hand with the specifications of the home on it.Be prepared to answer questions regarding the age of the house, furnace, electrical system, and roof, as well as general questions regarding square footage and features.
Utilities: When it's time for you to you take possession of your new home, switch your utilities over to your address in advance. This includes phone, cable, internet, power, water, and gas services. Also, don't forget to cancel the utilities at your previous residence.
Mailing Address: Gather all your bills, statements, tax information, healthcare information, anything you make automatic payments on, any subscriptions, any clubs or organizations in which you belong, and so on. Sit down and put together as comprehensive a list as you can manage early, because its likely you will miss a few. Once you've collected them all, reach out and begin giving out your new address and the date you will be taking possession or moving in. Consider having the postal service forward your mail for anything you may have missed.
Step 8 - Possession Day
On possession day, it will be time for you to meet up with your real estate agent at the property at least a half hour beforehand for a complete walkthrough of the home. At this time, you and your agent can ensure everything is as agreed upon in the contract. Typical things to look out for are damage from moving and things that don't work when it was agreed upon that they would.
By walking through the property prior to the key changing hands, we can notify the lawyers of any problems beforehand. The keys will still change hands, however, the seller will be responsible to take reasonable action to remedy the problem or be in breach of the contract.
Step 9 - Follow Up
After you've taken possession of the home, the transaction is complete. However, questions may arise after the fact. You will receive a follow-up phone call a few days after taking possession, so for any questions, write them down in advance so you're prepared.
Contact us for more information about buying real estate in Los Angeles, California.