The first step is to contact a lender (mortgage broker or bank) to get pre-approved for a loan.
Your loan officer will review your financials (income, debt, savings, credit score, etc.) to determine the amount that you can borrow. Based on this, we can figure out your budget for your home purchase. Your loan officer will issue you a pre-approval letter stating the loan amount you qualify for and you will need to submit this letter whenever you make an offer on a property.
Once you have your budget, you can start your property search! I will send you active listings, and off-market listings based on your specific criteria. Once confirmed, I schedule appointments for viewing.
Once you’ve made a decision on a property, we can submit an offer:
1. Residential Purchase Agreement Contract
2. Pre-approval Letter
3. Proof of assets (Bank account statements etc)
4. Credit report showing FICO score (optional, but helpful)
5. Introductory Letter to Sellers (optional, but helpful)
Some of the important terms of the offer contract to be aware of:
● Initial Deposit – The cash amount (made in a cashiers check) is usually determined as a percentage of the purchase price. In Silicon Valley a typical initial deposit (also known as earnest money, letting the Sellers know you are serious in purchasing the home and not backing out) is 3% of the purchase price. The funds are managed by a Title/Escrow company. As the transaction moves forward, the deposited amount is then applied to the buyers down payment at closing.
● Escrow Period – This is the number of days from the date of acceptance that the closing date falls on. The escrow company is the third party company that is handling the transaction process for us.
● Inspection Contingency Period – Once you have an accepted offer, you have a set amount of time to bring any inspectors, contractors, family members, etc. to come look at the house. If you find anything wrong with the house, you can request for the seller to repair it or provide a credit to repair it, or if you cannot come to an agreement on terms, you can back out without losing your deposit within the contingency period. The shorter your inspection period, the more attractive your offer is to a Seller.
● Appraisal Contingency Period – If you are getting a loan, you have a set amount of time for your lender to send an appraiser to the property to appraise the value of the property. If the property appraises for lower than your contracted purchase price, you have the opportunity to renegotiate the price with the seller, or back out without losing your initial deposit.
● Loan Contingency Period – If you are getting a loan, you have a set amount of time to get your final loan approved through your lender. This is why it is so important to get pre-approved and send all your documentation into your lender ahead of time. If for some reason, after further review of all of your documentation, you cannot qualify for the loan, you can back out without losing your initial deposit.
A few days before the closing date, we will do a final walk through of the property to make sure that the condition of the property has remained the same (although this is not a condition of the sale). Around the same time, you will wire (or issue a cashier’s check) your final closing funds to escrow, followed by your lender. We may receive the closing confirmation anytime during business hours on the closing day, it just depends on how far back in line we are with the county recorder’s office. Once escrow has all of the funds, they will schedule recording of the grant deed with the county. Once we receive confirmation of closing from the county, you are officially the homeowner and you will receive your keys.