While many people dream of buying a home in Coronado, CA and in greater San Diego, it requires considerable effort on your part. The process can be complex, but it doesn’t need to be scary.
To help, we created our step-by-step guide and buyer’s flowchart that will walk you through and visualize the home buying process. Whether you’re thinking of buying your first home, a new primary residence, a vacation home, or an investment property, it never hurts to read up on home-buying basics.
If you’re currently renting and thinking about buying, check out this link to see the advantages of buying over renting.
How to Buy a House, Step-by-Step
- Get your down payment together. Most people pay between 3% and 20% down on the sales price.
- Save cash for other home-buying expenses. You’ll also need cash for closing costs—generally between 2-4% of the purchase price. Finally, you’ll need cash for home inspections, insurance premiums, and miscellaneous repairs. Inspections usually run a few hundred dollars, and repairs can vary. Home insurance can run as low as $125 a year for a condominium and up to a few thousand a year for a house.
- Figure out how much you’re comfortable spending on your home per month. You need to calculate the cost of owning and buying a home or condo. This includes not only mortgage payments, but property taxes, private mortgage insurance (if required) and HOA dues (if required.) This will give you a ballpark figure when you compute your mortgage payments.
- Think long-term. The days of buying and flipping (for most of us) are long gone. Plan on holding onto your real estate investment for at least 10 years.
- Clean up your credit. You need excellent credit these days to get a good loan. Check your credit and clean it up now. See our tips on improving credit.
- Talk to a lender and get pre-qualified. The lender will run your credit, check your finances, and give you an idea of how much you can qualify for with your down payment. Keep in mind, you may not want to buy a home for the maximum amount you qualify for. Remember Step 2, and make sure the monthly payments are something you are comfortable with. Remember to add in property taxes, HOAs, and other costs. Click here to get prequalified with a lender.
- Come up with a price range. Based on your work with the lender, decide how much you are willing to pay for a home.
- Find a good Realtor. It is absolutely critical that you find a good Realtor who can help you find your next home and represent you in the home-buying process. Select a realtor with inside knowledge on your desired location. A realtor who works for the buyer (you) is called the buyer’s agent. There’s no downside to using a realtor, because their fees are paid by the seller, not you. Read more about why you need a buyer’s agent. Not only do Realtors help you find homes, negotiate pricing and terms, and advise you on all aspects of the transaction, but they will help you if you need to cancel the transaction and move onto another house. Contact us for a free buyer consultation.
- Have your Realtor set you up with MLS emails. Don’t rely on Zillow or other real estate websites for your home information. It’s a great place to start, but once you begin seriously looking, they won’t do the trick. We have seen many, many inaccuracies in these sites. Realtors have direct access to the MLS, which is a database of all houses for sale in Coronado, CA and greater San Diego, CA. You can give your realtor a list of zip codes that you’re interested in, and general specifications that you’re looking for (price, size, number of rooms, etc.). Your realtor can easily find all the houses in MLS which match your needs and have listings emailed to you as soon as they hit the MLS. Click here to get set up for property emails.
- Look at Houses. Your realtor will set up appointments for you to view homes that interest you and can be relied on to give you an unbiased opinion.
- Make an Offer. Your agent will run comps for the house you are interested in, strategize with you on negotiations, and advise you on how much to offer. But remember, you’re the boss, so you always decide how much to offer and what your terms are.
- Open Escrow. Once you have an accepted offer, you will turn over your earnest money deposit (usually 3% of the purchase price) and begin your due diligence as a buyer. This means arranging home inspections, appraisals, and reviewing all disclosures about the home. Usually you have 17 days to do this. See our list of important buyer deadlines. Your agent will guide you through this process and make sure that all your inspections and reports are received in a timely matter. You can also check out the buyer’s flowchart which shows you the different steps in the escrow process.
- Close Escrow. Once loan documents are signed and all the down payment funds are wired in, you’ll close escrow. Usually the sale will record the next day.
- Move in! After the sale records, you get your keys and move in!