Buying a home can be daunting. But if you take it one step at a time, you can simplify the process and make sure that when you find your dream home, you are prepared to move forward to ensure you get the house. Here is a list of the things you need to do before you even go looking for a home.
Pre- Qualification: Meet with a mortgage broker and find out how much you can afford to invest in your new home.
Pre- Approval: While knowing how much you can afford is the first step, sellers will be much more receptive to potential buyers who have been pre-approved. You also will avoid being disappointed when going after the homes you are interested in that may be out of your price range. With Pre- Approval, the buyer actually applies for a mortgage and receives a commitment in writing from a lender. This way, assuming the home you`re interested in is at or under the amount you are pre-qualified for, the seller knows immediately that you are a serious buyer for their home. Costs for pre-approval are generally nominal and lenders will usually permit you to pay them when you close your loan.
List of Needs & Wants: Make 2 lists. The first should include items you must have (i.e., the desired bedrooms, bathrooms, square footage,etc.). The second list is your wishes, things you would like to have (Backyard, Pool, additional upgrades,etc.) but that aren`t absolutely necessary. Realistically for first-time buyers, you probably won`t get everything on your wish list, but it will keep you on track for what you`re looking for.
Representation by a Professional: Consider hiring your own real estate agent, one who is working for you and specializes in your needs, and in the area or city or neighborhood you are interested in.
Focus & Organization: In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:
One or more detailed maps with your areas of interest highlighted.
A file of the homes that your agent has shown to you, along with setup sheets and photos.
Paper and pen, for taking notes as you search.
Take pictures to help refresh your memory on individual homes.
Location: Look at potential homes as if you are the seller. Would a prospective buyer find it attractive based on curb appeal, school districts, crime rate, proximity to positives (shopping, parks, freeway access) and negatives (abandoned properties, garbage dump, source of noise) features of the area?
Be Objective: When searching for your new home ask yourself the following questions. Does this home really meet your needs? Does it financially make sense?
Be Thorough: A few extra dollars well spent now may save you big expenses in the long run. On the other hand, you don’t want to end up “house poor,” and not be able to afford the quality of life you want. Don`t forget such essentials as:
Include inspection & mortgage contingencies in your written offer.
Have the property inspected by a professional inspector.
Before you close, check to see that no changes have been made that weren`t agreed on (i.e., closing cost, repairs, etc.).
All the above may seem rather overwhelming. That`s why having a professional represent you and keep track of all the details for you is highly recommended. Remember, the seller pays the commission to both agents, so having an agent representing you in buying a home costs you nothing.
How to Buy a Home in the Palm Springs/Coachella Valley Area
Buying a home in the Palm Springs/Coachella Valley area is very different from buying a home in metropolitan areas or rural areas. The Valley is very “Subdivision”, or “country club” oriented. People buy homes, whether it is a full-time residence, a vacation home or a rental, based on the amenities offered in each community.
A majority of the homes sold in the Valley are in neighborhoods governed by Home Owners Associations, and the monthly fees range from $75/month to over $1100, depending on the services and amenities they offer. A neighborhood with a $75/month fee might just cover trash, or street sweeping. A $140/month HOA might cover a gate with code and card access. A $1100/month fee might include a golf course, a clubhouse, cable, trash, roof repair, landscaping front and back, and homeowners insurance. It all depends on what buyers are looking for.
Many people do not want to be in a community governed by an HOA. But many people, especially those buying vacation homes or rentals (who might not be full-time residents), like the added security, safety, and services that go along with an HOA.
So, the first thing to do when considering buying a home in the Palm Springs area is to determine what amenities and services you want, and how much you want to pay for them.
Here are a few examples:
Sunterrace in Palm Desert charges $140/month. Residents have a gated community with code and card access, as well as Saturday street sweeping.
Victoria Falls in Rancho Mirage charges $290/mth HOA fees. Residents have a gated community with card and code entrance, tennis court, basketball court, walking trails.
The Lakes Country Club in Palm Desert charges over $1100/month HOA fees. Things included in the HOA fees for The Lakes include:
Golf Course Fitness Center
24-hour guard gate
Landscaping and maintenance front and back
Tennis courts and paddle tennis courts
The active social community at the golf course and clubhouse
So, it all depends on what you are looking for in a home, the cities you would consider, and the services you want to be provided, as well as the social offerings at each of the country clubs or communities. I always recommend going through the following process in purchasing a home in the valley:
Determine which cities you are interested in
Determine what amenities/lifestyle offerings/services you want to pay for through an HOA
Work with your real estate agent to find out which neighborhoods meet your criteria and budget, and drive around those neighborhoods to see which ones you can see yourself living in
The last step is to look at specific homes!
What is Escrow and How Does it Work?
Escrow is not a person, or a place or a thing. It is a process. Escrow companies are licensed by the State of California and are responsible for coordinating all parties and paperwork to ensure a successful closing.
• Escrow coordinates all parties, including buyer, seller, and lender throughout the process
• Escrow is the holder of all documents and funds
• Escrow is neutral…escrow cannot take sides and cannot negotiate.
• The escrow holder keeps monies, documents in their custody as an impartial third party, that take effect only when all specified conditions have been fulfilled.
What is Title Insurance and Why is it Important?
A title insurance policy protects a real estate owner or lender against any loss or damage they might experience because of liens, encumbrances, or defects in the title to said property, or the incorrectness of the related search. Typically the seller pays for Title Insurance for the sale of their home.
Protecting You Against Hidden Risks
Protection against loss from claims on real estate which cannot be discovered by examination of the public records is the second part of the two-fold benefit provided by Title Companies.
How Does Title Insurance Differ From Casualty Insurance?
Casualty Insurers (car, life, health, etc.) assume the risk for future events, collecting monthly or annual premiums. A title policy insures the past of the real property and the people who owned it, for a one-time premium paid at the close of escrow.
How Does a Title Insurance Policy Protect Against These Dangers?
If a claim is made against your title as covered by your policy, Title Companies protect you by:
Defending your title, in court if necessary, at our expense.
Bearing the cost of settling the claim if it proves to be valid, in order to perfect your title and keep you in possession of your property.
Your Ownership of Real Estate
Real estate has always been considered people`s most valuable possession. It is so basic a form of wealth that many special laws have been enacted to protect ownership of land and the buildings which stand on the land.
You should realize whenever you buy a property that the owner who is selling it to you has extremely strong rights as do his family and heirs. Also, there may be others - in addition to the owner - who have "rights" in the property you are going to buy, perhaps governmental bodies, or contractors, for example.
Some of the things a title search uncovers are any unpaid taxes or mortgages judgments against previous owners, easements, and many other court actions or recorded documents that can affect title to real estate. Title companies find and report such defects in the title to the real estate you wish to buy so that these matters can be corrected and cleared up. It is the first benefit you receive when title insurance is ordered.
What Types Of Policies Are Available?
A standard CLTA `Owners` policy insures the new owner, the home buyer and an ALTA or CLTA `Lenders` policy insures the priority of the lender`s security interest. An extended coverage ALTA-R (residential) policy to owners of 1-4 unit property is also offered. The ALTA Homeowner`s Policy is for owners of 1-4 unit properties as well and expands the number of covered title risks to 29, including certain specified risks that may arise in the future. Some Title Companies may issue this extended coverage automatically on qualifying properties. Special Binders, Guarantees, and Endorsements are also available.
How Is Title Policy Created?
After the escrow officer or lender opens the title order, title companies begin a search of the public records including the County Recorder, Federal and State Agencies, and County and City Offices. A Preliminary Report is issued to the customer for review and approval. All closing documents are recorded upon escrow`s instruction. When recording has been confirmed, demands are paid, funds are disbursed, and the actual title policy is typed and sent to the insured.
Who Needs It?
Purchasers and lenders need title insurance to know the property they are involved with is insured against various possible title defects. Whether it`s a sale, refinance construction loan...the seller, buyer, and lender all benefit.
Pay Only Once
Unlike other forms of insurance, the original premium is your only cost as long as you own the property. There are no annual payments to keep your Owners Title Insurance Policy in force.
Why is Title Insurance Important?
Title Insurance will protect you against a loss on your home or land due to a title defect. A deed or mortgage in the chain of title may be a forgery.
• Title Insurance will protect you against a loss on your home or land due to a title defect.
• A deed or mortgage in the chain of title may be a forgery.
• Claims constantly arise due to marital status and the validity of divorces.
• A deed or mortgage may have been made by an incompetent or under aged person.
• A deed or mortgage made under an expired power of attorney may be void.
• A deed or mortgage may have been made by a person with the same name as the owner.
• A child born after the execution of a will may have an interest in the property.
• Title transferred by an heir may be subject to a federal estate tax lien.
• An heir or other person presumed dead may appear and recover the property or an interest.
• A judgment regarding the title may be voidable because of some defect in the proceeding.
• By insuring the title, you can eliminate delays when passing your title on to someone else.
• Title Insurance reimburses you for the amount of your covered loss.
• Title Insurance helps speed negotiations when you`re ready to sell or obtain a loan.
• A deed or mortgage may be voidable if signed while the grantor was in bankruptcy.
• Claims have risen dramatically over the last 30 years.
• There may be a defect in the recording of a document upon which your title is dependent.
• Title Insurance covers attorney fees and court costs.
• Many lawyers protect their clients as well as themselves by procuring title insurance.
• A deed or mortgage may have been procured by fraud or duress.
• A title policy is paid in full by the first premium for as long as you own the property.