A quick guide to shopping for homes in Southern California.
For many, a home purchase is the biggest decision one makes. In today’s market, it’s critical you do your homework so you don’t make unnecessary and costly mistakes. Your home buying journey begins up to 1 year, for some even more, in advance of purchasing. Here’s what we recommend:
6 months – 1 year in advance: get your affairs in order. 1) Know your credit and 2) come up with a plan for your down payment. If you have a neighborhood in mind, find out the average prices. To be competitive, it’s recommended you put 10% or more towards a down payment.
1-3 months in advance: decide on what’s important and select an agent. It’s important to write down 5 things that are most important to you, i.e. good schools, nice view, short commute, large square footage, investment potential, etc. Your new home should meet at least 3 of the criteria. As for an agent, he/she will become your most trusted advisor throughout the process. Select carefully and start working with him/her now.
2-3 weeks in advance: obtain a loan pre qualification letter from a lender. The most popular options are to either choose a private local lender or to choose a large bank, i.e. Bank of America/Merrill Lynch or Wells Fargo. A private lender may be able to close much quicker and will likely require less documentation up front; however, their rates are often on the higher side. Large banks typically take longer to approve and close because they require a large amount of verification paperwork. One advantage to using a large bank however, is their rates are usually more competitive.
IMPORTANT: You do NOT want to look at any homes without obtaining a pre qualification letter first!
Sellers, especially in Southern California, will only entertain offers that come from pre qualified buyers.
Now it’s time to shop!