4 Most Common Steps in Buying Your First Home

For the first time buyer, buying their first home might be a big problem and most of them have no knowledge on how and where to start.  Home buying process in San Diego, California is simple with the following 4 most common steps.

1. Finding a home according to your needs, budget and preference

It is customary to make a search for an available home in California to buy and you may start by asking a few friends, they might have known one or have passed along some property where there is a signage that such home is for sale.  Newspaper and real estate magazine are one of the best sources of available home for sale that one can get information.  One can also visit and surf the internet for the availability of home for sale online.  However, the best way of finding a home is to visit some home development sites and talk to either the developer or the property realtor.

2. Make an offer to purchase on the home you wanted to buy

After finding an available home for sale and have the same visited, inspected and would like to buy, the customary way is to offer a price to the seller.  The seller may or may not accept the price you offered.  If he agrees, you will sign an “Offer to Purchase Agreement” that in effect; you are legally bound to pay the property according to the terms and conditions of the agreement.  However, if he refuses, he will make a counter offer.  If you see that his counter offer is reasonable enough, then the deal will proceed.  Most of the time, the buyer and seller make the negotiation on how much should be the selling price of the new home.  Once both parties agreed, the Offer to Purchase Agreement is signed by both.

3. Look for home financing loan

Generally, an average person could hardly afford to buy a new home in cash.  It is usually done through home financing loan.  With your Offer to Purchase Agreement, you can directly go to a bank or any financial institution to apply for a home financing loan.

The bank will check your financial records and your credit rating reports to determine whether or not they will finance your home purchase.  When you will qualify for the minimum standard set by the bank and approved your home financing loan, the bank will pay the seller.  At most, you will be required by the bank to make a 20% down payment of the total cost of home purchase.

The bank will require you to execute a real property mortgage in their favor of the subject home and to assume all other closing costs of the home purchase.  Depending on the terms of the mortgage agreed upon with your lending bank, you will be required to make monthly amortization payments that include interest payments for a certain fixed or flexible time period.

4. Closing day and moving-in into your new home

This is the day where you will take legal ownership and possession of the home you purchased.  It is a day of the signing of documents by the seller that he is legally conveying the title or ownership of the home to you and taking cognizance of the full payment you made to him through a bank lending facility.  You can now move in and live in your new home, your first ever home.

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