Buying a home is often a stressful process. However, if you know what to expect you can avoid a lot of common mistakes and ensure that things go as smoothly as possible. In this guide, we'll cover what to consider when buying real estate, including how to find the perfect home for you and your family and how much it will all cost in the long run!
Michael Lersch
Team Manager
Daryl Rogers
CEO
Cherelle Herrera
Transaction Coordinator
Adrianne Westlake
Client Care Manager
Hovhannes specializes in all facets of Real Estate, whether it be providing help in the Luxury market, navigating the way for First Time Home Buyers, or trying to score that perfect Investment Property, he knows and has experienced it all. He has built a solid foundation of clients in the Greater Sacramento Area through his professionalism, attention to detail, and commitment to always put his clients' needs first.
Hovhannes's background in law comes in very handy when negotiating deals and drafting offers on his clients' behalf. He studied law at the UC Berkeley School of Law. He practiced law for 7 years by negotiating and drafting contracts as an In-House Legal Counsel as well as reviewing international treaties to ensure their compliance to national law.
Get Pre-Approved
Meet with a lender to find the right mortgage. Share pre-approval letter with an Agent.
Find An Agent
We are local market experts and will work within your budget and wish list.
Find your home
We will find you some
suitable options and
set up showings for
you to view.
Offer
When you find your
dream home, we will
submit and offer and
negotiate the terms of
the contract.
Inspections
Complete inspections
on the home with a
professional.
Negotiate any repairs
before closing.
Appraisal
A professional will
determine if the home
is worth the price you
agreed. A lender
cannot lend out more
than a home is worth.
Pre-Closing
Confirm repairs are
completed, do a final
walkthrough and
transfer funds.
Closing
Sign and review all
closing documents
and receive your key!
Your goal is to find a home that meets your needs and budget. As your agent, it’s my goal to make that happen. Here are some ways I back my clients:
Before you even start thinking about buying a house, it's important to make sure that your finances are in order and to consider how much you can afford. Mortgage lenders recommend you do not buy a home that is more than 3 - 5 times your annual household income. If you are not purchasing with cash, you will need to find a mortgage lender and get pre-approved.
CREDIT REPORT
Get a copy of your credit report and look over all the information it contains. Your credit score will give you an idea of what kind of loan rates and interest rates you can expect to pay if you do decide to apply for a mortgage.
COSTS TO CONSIDER
A Down Payment is typically between 3.5% - 20% of the purchase price.
Earnest money, or good faith deposit, is a sum of money you put down to demonstrate your seriousness about buying a home. Generally is 1-2% of the purchase price.
Closing Costs for the buyer run between 2% - 5% of the loan amount.
A Home Inspection costs $300 to $1500. Depending on the property size and type of inspections ordered.
A pre-approval is an official document that says that a bank or credit union is willing to lend you a specific amount of money based on your income, assets and liabilities. A pre-approval means that the bank has reviewed your financial information (income and assets) and decided that it's safe for them to give you a loan for at least as much as they have approved for your purchase.
You can start your search knowing how much house you can afford—not just in terms of its price tag but also in terms of monthly payments. You will be able to compare listings with this knowledge at hand and avoid wasting time or money on homes that are outside your price range.
We will set up showings on suitable homes that match your wish list and budget. Here are some tips. Don't worry, we will take care of most things but it's important for you to consider the below.
CHECK PLUMBING AND ELECTRICS
Check kitchen and bathroom plumbing, as well as electrical outlets and light switches for proper operation. Open doors and walk into every room to test their comfort level (no one wants to be surprised by an unexpected closet door).
NOTE TRAFFIC
Note traffic on the street and surrounding area. If you commute to work, consider revisiting the area during peak times to get an idea of traffic and travel time.
TAKE NOTES
You may forget some details when looking at other houses later on in this process, so keep track of them all now as they come up. It’s also a good idea to take pictures.
Once you’ve found the home of your dreams, it’s time to put things in motion. The next step is to make sure that your offer is competitive. When it comes to making offers on homes here are some things to consider.
OFFER PRICE
This is how much money you are willing to pay for the home. This can include fees and any other costs associated with buying a home (closing costs). You should also factor in taxes if they aren't included in your purchase price or monthly payments.
AN EARNEST DEPOSIT
This is a down payment which shows that you're serious about buying the house; usually around 1 percent of its value.
OFFER TO CLOSE QUICKLY
Offer to close quickly. Try to shorten the inspection period to 10 days or less to speed up the process. Most sellers want to close within 21 days.
THE SELLER WILL THEN:
Accept, reject or make a counter offer. A counter-offer is when the seller offers you different terms. If this happens, you can accept their offer, reject it or negotiate it with our assistance.
ACCEPTED
If your offer is accepted, you will sign the purchase agreement. Then you are officially under contract!
A home inspection is a fairly common practice in the real estate industry. We will schedule an inspection with a professional home inspector. It can help you identify issues with the house.
You should use this information to NEGOTIATE with your seller if there are any problems that need attention, especially ones that could be costly to fix. This gives you an opportunity to make sure you don't end up with a home that has structural issues. Be reasonable on smaller issues. If there's minor wear and tear on appliances or carpeting, consider giving it a pass unless there's something seriously wrong with them (like mold on window frames).
Your lender will arrange for an independent appraiser to provide an estimate of the house you are purchasing. The appraiser decides if the cost agreed is a fair price for the property. When purchasing a home, it’s required by most lenders to have an appraisal done to ensure the value of the property is consistent with what you are paying for it. Once approved, expect to receive a letter confirming your loan terms and final rate selection.
The pre-closing stage is the period between signing and closing day. It’s time to make sure everything is in order before you move into your new home.
We will complete a title search. This ensures that the seller truly owns the property and that all existing liens, loans or judgments are disclosed.
HERE'S WHAT YOU'LL NEED DURING THIS PHASE:
Closing will likely be held at the office of the title company, attorney or the lender.
WHAT TO BRING
WHO WILL BE THERE
Once all the papers are signed, you’ve secured your mortgage and the closing is officially complete, you’ll receive the keys to the property.
You’re probably wondering what the latest housing market news means for your homebuying plans this fall. Here are the three top things to remember.
1. THERE AREN’T MANY HOMES AVAILABLE FOR SALE RIGHT NOW
Housing inventory is measured by the number of available homes on the market. It’s also measured by months’ supply, meaning the number of months it would take to sell all those available homes based on current demand. In a balanced market, there’s usually about a six-month supply – but today, we only have about half of that. With inventory that low, buyer competition is up, and that means many homes often receive multiple offers. Working with a professional can help you be more competitive in this kind of market.
2. MORTGAGE RATES NEAR 6% OR 7% ARE THE NEW NORMAL
Mortgage rates more than doubled in the 2022 calendar year. That’s never happened before, and the rapid rise caused some buyers to delay their plans. But since last October, rates have settled a bit in roughly the 6% to 7% range. It's time to understand rates around 6% or 7% are the new normal. The rates we experienced a few years ago, like 3%, are now a thing of the past.
3. HOME PRICES ARE GOING UP AGAIN
If you’re keeping up with the news, you might be uncertain about what’s happening with home prices and worried if things will get worse. Well know this, the worst home price declines are behind us and prices are appreciating nationally.
But it's important to know prices differ depending on where you live. Overall, low inventory and relatively strong buyer demand are going to keep upward pressure on prices. Doug Duncan, SVP and Chief Economist at Fannie Mae, says this about home prices right now: “. . . housing prices continue to show stronger growth than what was previously expected . . . Housing’s performance is a testimony to the strength of demographic-related demand . . .”
So, with prices going up again, if you find a home that suits your needs, it’s probably not the best idea to wait.
If you’re looking to buy a home, you should know even a small change in mortgage rates has an impact on your purchasing power. This chart shows how rates generally affect your monthly payment.
| Home Loan Amount | Fixed Mortgage Interest Rate | Monthly Mortgage P&I* | Monthly Difference |
|---|---|---|---|
| $250,000 | 7.0% | $1,663.26 | - |
| 6.5% | $1,580.17 | $83.09 | |
| 6.0% | $1,498.88 | $164.38 | |
| $450,000 | 7.0% | $2,993.86 | - |
| 6.5% | $2,844.31 | $149.55 | |
| 6.0% | $2,697.98 | $295.88 | |
| $800,000 | 7.0% | $5,322.42 | - |
| 6.5% | $5,056.54 | $265.88 | |
| 6.0% | $4,796.40 | $526.02 |
*Principal and Interest Payment. Total monthly payment may vary based on loan specifications such as property taxes, insurance, HOA dues, and other fees. Interest rates used here are for marketing purposes only. Consult your licensed Mortgage Advisor for current rates. Sources: MortgageCalculator.net, Trading Economics
Ready to take the next step in your real estate journey? Whether you're buying, selling, or investing, I'm here to provide expert guidance and support. Contact me today for a free consultation.
