Buying a House in San Diego – Steps You Need to Take
Steps to Home Ownership
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Step 1- Qualifying for the Mortgage
It is no secret that qualifying for a mortgage today is no simple task. It is imperative that a buyer qualify as the first step before looking at homes. When we’re ready to make an offer on a great property, a pre-qualification letter from the lender is necessary to accompany it. Therefore, it’s important to start the prequalification process before looking at properties. A second benefit is that the buyer will know beforehand exactly what they’re qualified to buy, what issues might need to be addressed upfront, and which items will be needed from the mortgage company when applying for the loan.
The California Residential Purchase Agreement requires the buyer provide a Conditional Loan Approval from the lender based on a loan application and Tri-merge Credit Report within 7 days of Seller’s Acceptance (unless specified differently in the purchase agreement).
Check out these mortgage calculators to get some ideas of the price range you are interested in. These are our recommended local San Diego finance specialist that are familiar with condo financing on the many downtown complexes that are beyond the scope of what an average loan officer can handle.
iMortgage | Lisa Coleman | 858-736-0752 | Lisa.Coleman@imortgage.com
CMG Financial | Scott Evans | 619-723-7289 | Scott@cmgfi.com
Sierra Pacific Mortgage | Ryan Engh | 619-884-0305 | email@example.com
Prime Mortgage | Masud Sarwary | 619-327-2202 | firstname.lastname@example.org
Step 2- Defining the Search
This is an important step because there are so many differences in the various buildings and communities that make up San Diego. It is vital to get familiar the neighborhoods, their “look”, their personality, their culture and their amenities.
This is the essential time to voice your “wants” to your Buyer’s Agent. We need to know if you are an empty nester wanting to be close to dining and entertainment or if you are planning on having children and need to be in a neighborhood with the best schools possible. This is one of our favorite elements because it allows us to get to know you and listen to your needs.
Once we have established the criteria for your ideal home, we either create an online website for you to showcase properties that could potentially be a good fit or we help you set up a search that will email you properties as they become available. Usually, it is at this point that we sit down with you on the computer and look at some properties together online so we can get some initial feedback based on your reaction to different properties for sale. This also helps clients see for themselves whether or not the criteria they wish to have is actually available. If not, we can adjust the criteria so we can be as close as possible.
After we’ve refined the search, we schedule the appointments to view the chosen properties. This is usually fairly easy and 24 hour notice is normally sufficient notice. Most homes for sale have lockboxes, and sellers are very accommodating if they are motivated to sell.
We also visit new homes if they match the criteria you are looking for. New builders cooperate with realtors, but it is important we be with you at the initial visit. Remember, our expert representation costs you nothing, but can save you time, money and trouble.
Step 3- Viewing Properties and Narrowing Down the search
Now that we’ve defined the search, it’s time to start viewing properties. For appointment days we view properties, we recommend wearing comfortable shoes as we will often be on our feet anywhere from 2-4 hours.
For the first time out to view properties, we generally visit 4-5 properties. We find that if we visit more than 5 properties, our buyers end up being overwhelmed. We’ve been doing this long enough to be able to listen to your comments and dialogue and gauge whether our search is on track or needs to be adjusted.
Given the amazing scope of technology, online photography, videos and virtual tours, it is not uncommon for buyers to find a great home on their first or second appointment to view properties. Most buyers are able to weed out properties that don’t fit their tastes from the comfort of their own home.
For the second visit to view properties, we usually visit 3-4 properties as we now have a more refined search. At this point, we already have a better “feel” for the community or complex that may best suit the buyer so we are definitely getting warmer.
We continue to view properties until we have identified the perfect home and then it is time to start putting together the offer.
Step 4- Putting Together the Offer
Now that we’ve found the perfect home, it’s time to put together the offer. Although some buyers get nervous at this point, there is nothing to worry about as we always do Due Diligence and make sure we do the necessary research to negotiate the best possible price.
The first stage is to check the recent comparable home sales in that particular complex or subdivision to see if this property is priced accurately. We analyze how the subject property relates to other similar properties that have sold. This comparable market analysis or CMA tells us:
- the sales price of recently sold properties in the area
- the average days on market
- the average sales price per square foot of the recent sales
We also research to find out how long the subject property has been on the market, if there have been any price reductions during the listing period, if there have been any other offers on the property, and what the owner’s motivations are for selling.
Buyers will rapidly discover that they themselves become “appraisers of leisure”. After two weeks of seeing properties on the web and visiting them first hand, buyers know instinctively if a home is overpriced or is in line with the market. Because downtown San Diego is comprised of condo complexes with similar or identical floor-plans, this can make it relatively easy to estimate value.
Once we have done all the necessary research and have come up with a starting point for the offer, we prepare the California Residential Purchase Agreement. This contract contains 8 pages and includes: property address, purchase price, requested close date, down payment, earnest money deposit, financing details, contingencies, and other terms of the contract.
The Purchase Agreement needs to be accompanied by a prequalification letter if the buyer requires financing and also Proof of Funds to show the seller that the buyer has the necessary funds for the down payment.
So what now? As buyer’s agent, we present the Purchase Agreement to the seller’s agent, who in turn presents it to the seller. Most negotiations are done via telephone and by a Counter offer form. We successfully negotiate great deals for buyers and have set some of the lowest price per square foot sales in downtown complexes. We definitely work smart on negotiating the deal on the buyer’s behalf.
There is always a chance there will be multiple offers and we negotiate differently in this situation. It is a general practice that a sensible offer usually generates a reasonable response. With years of experience as a top producer, we will get you the best possible outcome.