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Home Buying Process
By Ed Hlavac, CTX Mortgage

The housing market in California has been very strong. Values have risen dramatically in the past five years. If you are a first-time homebuyer or moving up to a nicer place, the process is the same.

Step one: Hold a summit meeting. Decide what you need and want in a new home. Considerations would include more bedrooms or bathrooms, better schools, shorter commutes or increased amenities. It could be easier and less expensive to rehab a well located home than incur the expenses of selling. Consider how long you will likely occupy this new home. If it is your first home and your family is young, it is more likely you will move again fairly soon. The national average for all home owners, not just first-timers, is 7 years. Decide on the timing of your move. If you have a home to sell local market conditions will determine whether you must sell first or can close concurrent transactions.

Step two: Get approved for the maximum financing you could possibly need. Even though your budget may dictate a lower loan amount, I continually see buyers go that little extra to get the “perfect” home. In fact, it could be cheaper to stretch for the best real estate rather than pay the commissions to sell in a few years. Being “pre-qualified” is usually not sufficient in today’s robust market. A lender who issues an opinion as to your credit worthiness without taking an application, pulling credit and reviewing your documentation is setting you up for disappointment. Too many times, issues are uncovered after an offer has been accepted and escrow opened that nixes the deal; many times at the last minute. Don’t set your heart on a new home without a full credit approval in hand. Besides many sellers will not consider an offer without one or only allow only a limited time to get approved. Take care of the “annoying details” up front so you can concentrate on the most important thing: finding the right property!

Step three: Besides professional financing advice, you need professional buying advice. Many buyers are unaware that the seller pays all the realty commissions. So the service is free for buyers. Professional Realtors have expertise and resources to quickly narrow the search to meet your requirements. They can objectively evaluate each property and arrange for professional inspections to discover defects. Realtors have access to sales data to structure an offer and have experience in negotiating and knowledge of the local customary arrangements. Between your Realtor and Loan Professional, you can structure the terms to suit your needs.
If you have a house to sell, be aware that sales commissions are negotiable. With values up and turn over rapid, you can lower your costs by negotiating. Get recommendations from friends and neighbors. Interview some Realtors to find someone you feel is competent and you can trust with one of the largest financial transactions in your life.

Step four: Get out and shop! Happy hunting.


Ed Hlavac
ed.hlavac@ctxmort.com