We’ve written volumes about the home buying and mortgage process on our blog, with more than 100 articles published to date. For those in a hurry, we’ve condensed all of that advice into this top-ten list of California home buying tips, updated for 2017.
10 Tips for Buying a Home in California in 2017
1. Start saving money.
We put this home buying tip first for a reason. By saving money now, you’ll be increasing your chance for success later on. California home buyers often incur out-of-pocket expenses when buying a house. These can include the down payment, closing costs, and moving-related expenses.
With that said, there are ways to minimize your out-of-pocket expense when buying a home. For instance, you could use down payment gift money from a third party, such as a family member (more to follow on this). But for now, just start saving.
2. Create a budget before you start.
The budgeting process forces you to think about your monthly income and expenses, your financial goals, and even your quality of life. These are all important considerations when buying a home in California.
Your objective at this point is to figure out how much you can afford to spend on your monthly housing costs. Once you have an approximate figure in mind, you can shop for a house within that price range. You’ll have a more efficient home search.
3. Research your local housing market.
Before entering the market, spend some time researching local housing trends in the area where you want to buy. You can do this kind of research online, and also by talking to your real estate agent (see California home buying tip #3).
Focus your attention on recent sales prices in your desired neighborhood(s), and also how quickly homes are selling. This kind of knowledge will prepare you for the house hunting stage, helping you to evaluate the seller’s asking price.
4. Get a real estate agent.
California real estate agents have access to certain tools that can help you find a home faster, such as the Multiple Listing Service (MLS). They can also use their professional networks to learn about properties that are about to come onto the market.
Your agent can help you evaluate the asking price and make a smart offer, based on local market conditions. It’s one of the best California home buying tips we can give you — hire an agent!
5. Get pre-approved for a mortgage loan.
You can think of mortgage pre-approval as a kind of financial pre-screening process. Pre-approval helps determine if you’re a good candidate for a loan, and how much you’re able to borrow. It enables you to shop within a specific price range, which can save you a lot of time and energy.
Additionally, sellers will be more inclined to accept your offer if you’ve been pre-screened by a lender. And that’s important in a competitive real estate market.
6. Talk to us about your mortgage options.
Did you know you can secure a lower mortgage rate by paying “points” at closing? Did you know that most mortgage programs today allow for down payment gifts from family members? Do you know the pros and cons of the different types of mortgage loans?
You have a lot of options when it comes to getting a home loan in California. The industry has loosened up over the last few years. There are more programs available today, and more leeway when it comes to qualifying borrowers.
We can bring you up to speed on current financing options. Contact our team to get started. You might find that getting a mortgage loan is easier and less costly than you previously imagined.
7. Be open-minded and realistic.
This is a timely California home buying tip, based on current market conditions in 2017. Housing inventory is tight in many parts of the state right now, and competition among buyers is high. So you might not get everything you want in a home.
You’ll have to be realistic when separating wants versus needs. Here’s a rule of thumb: If you find a home that checks most of the boxes on your list, and it falls within your budget, it belongs on your short list.
8. Have the home inspected.
Home inspections aren’t always required, but they’re still a smart idea. They generally cost a few hundred dollars — a small price to pay for peace of mind.
The home inspector will examine the property inside and out, looking for safety issues, items in disrepair, structural problems, and the like. He will document his findings in a detailed report, and then go over them with you. This is valuable insight, and definitely worth the cost.
9. Ask a lot of questions.
Do you have questions about the state of your local real estate market? Ask your real estate agent. Have questions about your mortgage options? Ask us. Questions about the condition of the home? Ask the inspector. You’ll have access to a lot of expertise when buying a home in California, so don’t be shy about using it.
10. Keep an eye on home prices and mortgage rates.
Home prices in California have cooled a bit, but they’re still rising in most cities as we head into the spring of 2017. Mortgage rates have also risen since last year, and there’s a chance they could rise further through the end of the year. This is something to keep an eye on.
As a result of these trends, home buyers who postpone their purchases until later in the year could end up paying more for a house and for a mortgage. So a case could be made for buying sooner rather than later.