The Home Buying Process (Extra Tips for Santa Barbara, CA)
This is a simple, clear explanation of the home buying process from start to finish. Once you’re done reading, you’ll know exactly what to do to buy a home.
This is perfect for those who want a basic outline to follow as they look for their first/next house. With a idea of what to expect, there shouldn’t be any unpleasant surprises in store for you, and you can make buying a home a cinch (well, not really a cinch, but it’ll definitely be easier).
Though this guide was made with buying a home in Santa Barbara, CA in mind, the same basic steps can be applied anywhere.
For those that want a more in-depth guide through everything you need to do before buying a house, use our Essential 15 Step First-Time Homebuyer Checklist. With it, you can develop a very solid understanding of everything you need to know before buying a home. But for now…
Here’s the simplified home buying process walk-through:
Step-By-Step Home Buying Walkthrough
1. Pick your ideal neighborhood
There are two things to think about: affordability and “must haves.”
Affordability is self-explanatory, but I’ll still explain it. Don’t waste too much time looking at houses that are outside of your budget. Yes, they’re beautiful, impressive, and yes you might be able to afford them. But you don’t want to convince yourself to buy your dream home and end up house poor, scraping by to stay in a huge, pointless home.
At the same time don’t cheat yourself by going dirt cheap and buying a house that’s falling apart in a high-crime neighborhood. Find a balance between price and beauty that works for you.
“Must-haves” are a good way to narrow down your choices and pick a neighborhood you’ll love living in. Such as, do you want to be near a high-rated elementary school, or would you prefer to be closer to work? Or can you get both? Do you want a large, private backyard or a neighborhood with fenceless yards? Consider everything that is important to you (location, amenities, parks, styles, etc.) and make a list of must-haves to find the neighborhood that checks the most boxes off your list.
Here are some “must-haves” people are looking for in 2016 that might inspire you. Especially in Santa Barbara, there are a lot of “must-haves” that can be on your list because there is so much variety to choose from. There are many small, intertwined neighborhoods in Santa Barbara that are very nuanced, so you’ll need a list to figure out which one you love the most.
(As a counter-point, “can’t-haves” are also a good way to narrow down your ideal neighborhood. Such as, my house can’t be located next to a dangerous prison. So you might as well make a short list of deal-breakers to go along with your must-haves.)
2. Apply for financing early
This step is essential.
Talk to a loan consultant, mortgage lender, or your bank to get pre-qualified for your loan. This will give you an idea of exactly what you can afford so you can narrow down your search to homes within your budget. With this, you will also receive a loan estimate and get the finer details of the financing you’ll be able to qualify for.
This isn’t the same as approval, so you’re still going to need that once you’ve decided on a house. Keep in mind that the factors that determine what you pay on your mortgage will change slightly upon approval. Also, when you’ve picked out a few houses you’re very interested in and are serious about buying, you’re going to want pre-approval instead of pre-qualification.
3. Find the right house
Now refine the search you started in step 1, it’s time to decide on the specific house that’s right for you.
You can create another list of must-haves that is more focused and considers specific traits your looking for in a house, confined to your top neighborhoods. Such as, do you want a pool, are you looking for a home theater, how many bedrooms is ideal, or about bathrooms?
At this step, a smart idea is to hire a REALTOR© or real estate agent. They can share their expertise and help you understand the subtle distinctions between homes in Santa Barbara so you can pick out your favorite. When it comes time to buying, they’ll also be a valuable person to have on your team because they can negotiate prices based on their thorough understanding what a property is really worth.
4. Discuss financing with a home loan consultant
There are many factors that come into play when looking at mortgages, making it hard to understand how they’re actually going to impact the one thing that matters: how much you pay. Which is why we recommend hiring a loan consultant.
A loan consultant brings their expertise to the table to guide you through your options and helping you pick the best mortgage. Also, their relationship with banks and lenders will prove invaluable when you start comparing rates and negotiating mortgage agreements. They can quickly and masterfully go through a process that would otherwise take you weeks, and end up costing you if you skip over or misinterpret an important factor of your mortgage.
Loan consultants will help you find the mortgage that’s the best fit for you.
Our Santa Barbara branch of Caliber Home Loans is headed by one of the best loan consultants in the nation. Certainly the top home loan consultant in Santa Barbara, Diana MacFarlane is not someone you want to miss.
"Diana MacFarlane always finds a way to make loans happen for my clients! Personal service from start to finish.”(805) 883-6805
5. Schedule a home inspection
If you’re working with us, Caliber will get your home professionally appraised for you. If you’re not working with us, it’s a good idea to have a home inspection performed.
Especially if you’re buying an older home, you’ll want to find all the things that need repairs so you can use them in negotiations with your home’s seller. It also gives you an idea of the overall quality of the home, so you can know what big repairs might be coming in the next few years or if you should avoid buying it entirely. Here are some good tips on what to do during a home inspection so you don’t end up missing something that costs you big later.
6. Prepare for Closing the Deal
A home loan consultant makes this step a lot easier.
If you’ve been working with a loan consultant through the home buying process, they’ll present you with a closing disclosure once you’ve decided on a house. This document will clearly state the true cost of your home’s financing, closing costs, and any other important conditions.
If you haven’t been working with a loan consultant, you’ll need to do all of this yourself. First, take a close look at your mortgage to understand how much you’ll be paying. Then, you’ll need to go through and figure out how much you’ll be paying in closing costs, although as a rule of thumb, they usually total 2-5% of the home’s value. These fees range from home owner’s insurance, application fees, and property tax, and what you’ll pay differs from state to state. Last, you’ll need to look into your state’s laws, check with the home seller, and check with your lender to see what other important documentation there is that you need to fill out.
Whether you’re working with a loan consultant or not, you’re also going to need homeowner’s insurance so you can protect the beautiful home you just bought. You’ll be living there for at least a few years, so care for it well.
If you’ve made it through the arduous process of buying a home, there are a few things you’ll need to do before celebrating. It’s time to sign papers and put put down your money.
You’ll sign all of your loan documents, pay your down payment and closing costs, and finally sign the deed to your dream home.
Then it’s time to celebrate.