Home Buying Fundamentals from 90210 Real Estate

Don't Get Skewered!

Don’t Get Skewered!

Home Buyers: listen up! – Buying a Home is probably the Biggest Single Purchase you will ever make in your lifetime. Now is not the time to leave the process to chance. There are a myriad of important steps to take in the home buying process. Failing to take these steps is the equivalent of being skewered and roasted like a kabob! Seasoned Buyers who have been through the buying process at least once and pre should know by now all of the ‘pre-home buying’ steps to take. To a first time home-buyer the process is nothing short of overwhelming and anyone who tells you otherwise is not being forthright. There is a myriad of new terms you probably never heard before that you will have to know and understand, page after page of documents to sign and date, home inspections to perform, contracts to go over, documents to submit that support your income, home insurance to purchase & the list goes on and on. But all this takes a back seat to your FIRST STEP which is Loan Qualifying. So unless you are purchasing a home all cash, please follow with me the ins & outs of this First Step. If you are purchasing all cash, you can skip this article & next week catch STEP 2 “Home Hunting made Easy” which is the 2nd article in this five part series entitled Home Buying Fundamentals.

Step 1. “Get Qualified” by a lender before you begin your home search. Many buyers look for a property first and then get qualified. Simply put, this is tantamount to putting the proverbial cart before the horse! For one thing, you may be looking at properties well below what you can actually afford or way over what you can afford according to today’s loan qualifying standards. Your income, your debts, your credit score, years on the job and more all play a critical role in determining how much of a property you will qualify for. If you’re self-employed, there are even more hurdles to overcome. So before you venture out looking for your ‘dream home’ my advice is to GET QUALIFIED by a lender for two very important reasons. First, you will know exactly how much of a home you can afford. Knowing this information will fine tune your search parameters because now you can eliminate all of those properties that fall outside of your maximum loan amount. Secondly, if you submit an offer today without a lender’s pre-approval letter, it has about as much chance of being considered as would an Ed Wood movie for an Oscar. It just won’t happen.

In today’s fast paced market, there is too little inventory and too many buyers looking to purchase. The result is that Sellers are highly selective in the offers they consider. They want to see a pre-approval letter so they know the buyer can actually qualify to purchase the home if the sellers’ were to accept the offer. Why would a seller look at an offer without a prequalification letter & let another buyer who is qualified slip through their hands while they are waiting to see if you are qualified? That is fantasy land. It just won’t happen. So again, FIRST THINGS FIRST. Before you venture out looking for a property, GET PRE-QUALIFIED by a reputable lender. This is the BEST MOVE you can make in the home buying process.

Okay, so now you ask, where do I find a lender? My advice here should be heeded. Real Estate Agents often refer you to a lender they know or have worked with. Sometimes this is good and sometimes it is not. When it’s good, it’s because the lender has performed very well over the years & most importantly, closes on time. (More on this later). When it’s bad, it’s a lender who drags out the process, does not close on time and is a referral for reasons I will never understand.

So, if you get an agent referral (or a referral from anyone), ask your agent why is he/she recommending this lender? How is lender’s track record? Does the lender consistently close on time? How long has the agent utilized this lender to do loans for his/her buyers? After you have gathered this information, call the lender yourself and see what you think. Then, go out and find a lender on your own and ask many of these same questions. This lender could be from your bank, credit union or an online search.
BEWARE, many lenders promise a lot and deliver little. If your lender fails to close escrow on time, it is YOUR DEPOSIT that is at risk of being lost and the whole deal going up in flames! The lender has no skin in the game. YOU DO however and it’s in the form of the thousands of dollars you put down as a good faith deposit that you will close escrow on time! Failing to close on time is one of the most stressful situations a buyer can be in because your deposit money is at risk of being taken. So choosing the right lender is vitally CRITICAL.

We’ll see you back here next week for STEP 2 of the five part series entitled “Home Buying Made Easy.”
If you have any questions about this article or any real estate question, please drop me a line. I’d be glad to hear from you.

Charles Sant’Angelo is the Broker for 90210 Real Estate, Beverly Hills, California and the author of this syndicated Blog. Thank you.

Profile photo of Charles About Charles

Charles Sant'Angelo is a broker of 20 years with offices in the same Beverly Hills location. He has represented residential & commercial buyers & sellers in LA, Orange, Riverside & San Bernadino counties and as far away as Costa Rica. Whether you are a local or global 1st time buyer , a seasoned home buyer/seller or an investor, you will find that his professionalism & his 'Customer First' approach is the cornerstone to how he conducts business. Please visit our "About Us" page for more information or contact Charles direct at chas90210@gmail.com
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