Steps to Home Ownership

Step 1- Qualifying for the Mortgage

Before buying a home in San Diego, it is important that you qualify for a mortgage. It had been rather difficult in the past, yet it has gotten easier than it was a couple of years ago. It is important that you qualify as the first step before looking at homes.

When you’re ready to make an offer on the home of your dreams, a pre-qualification letter from the lender is necessary to accompany it.

1-It’s important to start the pre-qualification process before looking at properties.

2-The 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.

Step 2- Define your 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 lock boxes, 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 San Diego home and then it is time to start putting together the offer.

Step 4- Putting an Offer on a Home

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.

Step 5- Once your Offer is Accepted

To buy a home in San Diego, there a a number of remaining steps:

1-Order a home inspection to thoroughly evaluate the home and make certain there aren’t any major defects. We are looking for major defects like a roof that is near end of life. You might conduct other types of inspections if necessary

2-Unless you are paying cash, your lender will order an appraisal and start processing your loan. Depending upon the home inspection and appraisal results, there could be some form of a renegotiation or adjustments to your transaction, including not buying the home at all. Typically you might be able to cancel the purchase during your inspection period.

3-Lastly, we open escrow with a neutral third party.  Mortgage lenders typically insist on a real estate escrow account for the buyer prior to the purchase. After escrow is open, we can start the home inspection. We will also ask the seller for disclosures on the home's condition. Once we know the property is in satisfactory condition,  money from the escrow account is released on the home purchase closing date.

You might think you need your agent solely to help with the initial negotiations, but there are often other challenges that can crop up. You might not even notice what your agent is doing behind the scenes or how your agent is helping you if your agent doesn't point it out.

Buying a home in San Diego is a complex process and you need someone on your side to represent your best interests. With years of experience at Keller Williams in San Diego, we can protect your interests and negotiate the lowest possible price for you.