Whether you are a first time home buyer, upgrading or an investor there are many steps in the real estate buying process. Below is a diagram that you can use as a guide through the process. All of the steps require research, careful analysis, consideration and thought. Since a home is typically going to be the largest purchase you make in a lifetime it is important to have a team on your side that understand how to help you navigate through the process as stress-free as possible.
The three most important team members are you real estate agent, your mortgage broker and your escrow officer. Each will play an instrumental role in your home buying experience:
After making the decision to buy a house, the first step is to determine how much house you can or are willing to afford. In a conventional transaction, a 20% down payment on a 30 year fixed-loan is typical. It is also normally the minimum down payment amount if you want to avoid mortgage insurance. That being said, all transactions and situations are different so it is crucial that you have a skilled mortgage broker who can help you. It is their job to help you determine how much you can afford based on your savings, income and debt and to be there from start to finish until your loan is funded. They will also be able to generate a pre-qualification and pre-approval letter before you start looking at houses. This is an important negotiating tool for your real estate agent when crafting the strongest offer.
Finding a local real estate agent that is an expert in current market conditions and neighborhoods is important. I stress local because each market is incredibly different. Even as close as Sonoma or Santa Rosa- the Napa market conditions and contracting normalities vary. Also, when you work with a local agent they are physically present. If your dream home pops-up on the MLS at 9am, you can bet your local agent will be ready to see that house at 9:30am if you wish. Getting in front of the competition can be crucial, especially in a low inventory market like Napa.
Once an offer is accepted, your real estate agent will help coordinate all the inspections and work with your mortgage broker and escrow officer to ensure that all timelines are met. Make sure you work with an agent who listens to your goals and is completely honest with you about expectations. Never feel bad about asking as many questions as possible or the same question over and over again until you understand it. The right agent will be there for you from beginning to close.
In Northern California, your escrow officer will work for a local title company. They act as a neutral third party between you and the seller to make sure each transaction closes in a quick, organized fashion. They handle deposits and holding payments, pulling title reports, arranging title insurance and making sure that all contracts are executed by both buyer and seller. An escrow officer works very closely with your real estate agent and mortgage broker to make sure all the documents required are signed and delivered so that your loan can be funded and your deed recorded with the county.