Purchasing a home is a difficult process, especially for first-time buyers. Here are 5 things to know before buying a property in California, says Jamell Tousant, whether you’re a first-time homebuyer or a seasoned pro. In reality, buying a home in California has much more criteria than you may expect! Here are some helpful tips to keep in mind when purchasing a home in California. A Mortgage Broker’s Pre-Approval Is Not the Same As Final Loan Approval: A wise buyer will receive a pre-approval letter from a loan broker stating that they are pre-approved to purchase a home with a portion of the purchase financed through a commercial lender. We will point you, as will the bank, that just though you have been pre-approved does not guarantee that you will receive the loan.
Before any thorough underwriting assessment, the mortgage broker usually gives a pre-approval letter (lender review of your documents). As a result, it’s critical to recognize that the pre-approved letter is just that: a pre-approval, not an official approval. It’s difficult to close an escrow in 30 days. A 30-day escrow used to be rather typical in California. Following the financial crisis of the previous decade, lending standards were tightened, and the loan process was lengthened, making it more difficult to settle escrow in 30 days. We advocate a 45-day escrow since closing escrow in 30 days is extremely difficult and can bring unnecessary stress to a tense situation. It’s difficult to beat cash.
“All Cash” offers, in which the buyer does not require financing, are difficult to beat, explains Jamell Tousant of Oakland, California. If you don’t have an all-cash offer (which most people don’t), it may be tough to get your offer accepted if you learn of one. Carry out your checks. Please don’t scrimp on your inspections. At the very least, every buyer should have a general inspection.
Jamell Tousant advises you also to inspect the plumbing, roof, and fireplace, as well as get a boundary survey in some cases. If you don’t perform your inspections during the inspection period and afterward discover an issue, the law favors the seller and punishes the buyer who doesn’t do their homework before buying real estate. Do not make any purchases until the transaction is completed. Sales do not always close. Loans fall through, sellers cancel escrow incorrectly, unknown concerns with homeowners’ associations surface, and a slew of other unforeseen situations occur.
As a result, we advise against purchasing that new couch, new paintings, or whatever else you need to make the house your dream home before closing escrow. Aside from the sky-high prices in many locations, purchasing a property in California is similar to buying a home in other parts of the country. Here in the San Francisco Bay Area, sticker shock is extremely severe. You may need to purchase earthquake insurance. If you live in a “special study zone,” where earthquakes are more prone to occur, this will be the case. If the property is in a flood plain, you may need to purchase flood insurance as well. This can be quite costly. Before you make an offer on the property, Jamell Tousant says, the seller must disclose relevant facts like this.