Buying a house | 5 important steps and tips to buy a house in Anaheim Hills or Orange County CA
Buying your home in Anaheim hills, or Orange County? Where do I start? In today’s market, buying a house has become complicated. I’m going to give you five steps to buy your first home, or second or third home as the market has changed.
Hi, I’m Mike Patel with first team real estate right here in anime hills, serving anime hills and most of Orange County. So let’s get right into it. What do I do to get started in buying a house? Well, the first step is to be financially ready to buy a house. So assuming that you want to buy the house, and you’ve been thinking about it, and now you’re ready to buy, you need to get financially ready. Well, what does that mean? We’ll break it up.
The first thing is, you need to figure out how much of a house you can buy. And how much down payment do you have? So if you’re going to buy a house, let’s say for $500,000, and you want to put 10% down, you need approximately $50,000? Should you have that, or can you get that in the next two or three months or a year that you’re going to buy houses and start collecting it.
Also, you need to add money for closing costs. So you have a down payment plus the closing cost. The other thing you want to be doing right now or prior to buying a house is that you need to make sure that your credit score is decent, if you have dings on it, or if you want to improve your score, you can check your credit report, you can go to Credit Karma or free annual credit report.com or go online and figure out where you can check your credit and see if you can improve it if it’s not in good shape.
You also want to make sure that if you have any debt, you want to start reducing your debts. Because to be qualified for a loan, they look at your income and your debt. So if you have some credit card payments, or you have a boat or you have two or three cars, you may want to pay off some debt, because those will affect your qualification and amount of home that you can buy. And then the last thing about being financially ready is you have to decide how much money you’re going to come up with 5% down 10% down 20% down or even 40% down on the purchase price.
Step number two, to be financially ready, assuming you have the down payment and you’re reducing your debt. How do you figure out how much you can qualify for and how much of a house can you buy? Step two is contact a lender or talk to a lender, you can go online, or call a realtor in your area or call me and I’ll refer you to a lender who suits your needs. So what the lender will do is check your income, your debt, your W twos, if you’re self employed, they’ll check your K ones or incomes and all that and then let you know based on your income, whether it’s you alone or your spouse, or two brothers bind together or two friends bind together, they’ll combine the income, they’ll combine the debt and see how much you qualify for. So they’ll give you a monthly payment of your purchase price. They’ll also give you $1 and say hey, based on your income and your debt, this is how much you can buy a $500,000 house or a million dollar house or a $2 million house. So that’s the second step, which is a very crucial step in buying a house. Again, we can refer you to a lender. Or you can always go online and check around, it’s best to get a referral because they will match you. You are a buyer to a lender who matches your criteria and your personality.
Step number three is to find a realtor to work with. Based on the National Association of Realtors 90% of all the homes sold are sold to real estate agents. And also when you buy a house agents do not cost you anything buyer’s agent do not cost you anything. So I highly recommend that you get a hold of a local realtor. If you need a realtor. Feel free to call me or comment below and I will refer you to your realtor. And of course if you’re looking in anime hills or North Orange County or anywhere in Orange County, I’d be glad to help you.
First of all, the buyer’s agent doesn’t charge you any money. When you work with them. They know the neighborhoods, they know the price range and the activity going on in the neighborhood. They know the trends are the prices going up or the prices stable, or the price is going to come down so they can guide you through that process. They also know the negotiating skills and how to negotiate in this crazy market where there are multiple offers. They do the homework and call the other agent and find out what the sellers need. So they do the homework before they write the offer. So it’s highly recommended that you work with a local agent who is an expert. Also, just to let you know statistically a lot of the buyers and sellers know a lot of realtors, but according to statistics 50% of realtors don’t make it to the first year. And 90% of the realtors don’t make it through your five.
So be careful who you pick because not all agents are the same, you want the best agent for yourself and for your criteria. I did a video a couple of weeks ago talking about the six tips. When it comes to selling a house for sellers, I highly recommend that you watch that.
Step number four is to start searching for your dream home. Assuming that you are qualified and you know how much you’re going to get and how much down payment you’re going to need and you found a realtor, start a search with your realtor. And of course, you can search on your own online, there’s so many websites out there.
So start your search, what I recommend is when you do a search, stay within your price range, don’t go too much on the price, and also stay within the area. So assuming you want to buy, let’s say in Anaheim hills, or Yorba Linda or orange, don’t go too much in the area because you get confused because if you look at too many homes, then it gets confusing. So the best way to find the house is stick with your price range, stick with your area. And then I’m sure you decided whether you want just single story homes or you want homes with pools only. Or you want homes with views only to narrow down your search. So that when you find one, you know what kind of house you want, and you can go right in offering the narrow house you put down, the better off you are at finding that perfect house. And I know right now as of September 2021 days there is a shortage of inventory out there. But even if there is a shortage of inventory, there’s still a lot of homes for sale. And if you know exactly what you want, if you know what you have qualified for. Then as soon as you see the house, whether it’s one house, you don’t have to see 100 homes online. If you see one or two or three homes, it fits your criteria, your budget, your location, it’s close to mom or it’s close to school or in close to shopping, it’s close to hospital, depending on the criteria, go for it, make an offer, and go from there.
So step number five, I’m going to talk about making an offer. That’s step number five. So once you find the home that you like, and you think you are going to like and your spouse or your family is going to like the house, make an offer with the guidance from your realtor. What does it take to write an offer? Let’s say the house is asking a million dollars should you offer 900? That’s what buyers want to offer low? Should I offer a million dollars at fair market value? Or should you offer a 1.1 100,000? More? What 100,000 more Yes, in this market with these 567 offers, you may want to write 100,000 more with minimum contingencies.
I just showed a house last weekend, they were asking a million dollars. And I knew the agent was a friend of mine. And there was a lot of traffic. So based on his conversation I knew. So I told the buyer that if you want to have any chance in mind this house, you’re gonna have to offer them at least 100,000 more, make it short escrow like 21 to 30 days and remove any contingencies or don’t put any contingencies.
Your agent will guide you on how to make an offer. That’s number one on the price. The other things the realtor that you’re working with will help you on is to remove your contingencies. What are the contingencies? When you buy a house, you want to do an inspection, you want to do an appraisal, you want to check rents, you want to check the school you want to check crime. So all that your realtor will help you and you have 17 to 21 days depending on how you write the offer to check all those and your realtor, hopefully it’s me, we can help you do all that there’s a lot of small nuances we have to do. A lot of times we have to obtain it. And I can guarantee you that in any escrow 99% will have some kind of hitch or some kind of problem, whether it’s on the buyer side or on the seller side. And we have to solve that. So if something pops up, I remember I sold a house 20 years ago, we want to close escrow and the house caught on fire. Guess what? We had to change the roof and it took a month to do it, but we closed it. So something’s gonna pop up, then your realtor will help you do that.
So buying a house is a complicated process. You need guidance, you need a realtor to work with. And you have to be ready financially mentally, to be able to buy a house and it’s a great thing to buy a house. Hope you buy one soon.