The Buying Process

Find a REALTOR®
Nothing can substitute for the broad market knowledge of a REALTOR® when it comes
to buying a home. A REALTOR®’s expertise, experience, commitment to a code of ethics,
and promise to keep up-to-date on the latest industry news and changes in real estate
practice ensure an opportunity to negotiate the best price on a home. In addition, a
REALTOR® is able to offer impartial and unemotional advice as you navigate the road to
homeownership.
Get Pre-Qualified
Work with a qualified lender and obtain a pre-qualification letter that will give you a clear
picture of your borrowing and buying power. The pre-qualification letter tells a seller that you
are a serious buyer, and can save you time during the home-search process.
Shop Around
The current real estate market is not impacting all neighborhoods equally. For example: The
median home price in Los Angeles in November 2007 was $520,960, while in Riverside/San
Bernardino counties it was $344,140, and in the San Francisco Bay Area it was $793,930. A
qualified REALTOR® can break down this kind of data by neighborhood and provide other critical
information about homes in your area. For example, did you know that in today’s market, homes
are listed for an average of between six and eight weeks, in some cases longer, before they are
sold. You have more time to consider your options today, and more homes from which to choose.
Make an Offer
The bidding wars that prevailed as recently as a year ago have subsided considerably in many
areas. Roughly 55 percent of the sellers of homes on the market in 2004 received multiple offers. Today, the number is roughly 27 percent. Once you have found the home you would like to buy,a REALTOR® can help you complete a written offer to purchase the home. This crucial document should include your initial offer on the house and a comprehensive list of terms of the sale, including the price you are offering; deposit amount; escrow closing date; termite work; loan terms; inspection schedules; and other fee arrangements to be promised by either you or the seller.
Make a Deposit
Once you and the seller have a signed purchase agreement, your “good-faith” deposit may be delivered to escrow, and credited toward your down payment. The U.S. Dept. of Housing and Urban Development (HUD) advises that a good-faith deposit typically be a minimum of between 1 to 5 percent of the purchase price. The home-buying process encompasses many often complicated steps, from the pre-qualification phase, to negotiating a sale price, right down to your final walkthrough.
Have the Home Inspected
Arrange for the home to be inspected for termite damages and construction and
mechanical soundness, as well as the functionality of the home’s plumbing, heating,
and electrical systems, among other things. The buyer usually pays for his or her own
inspection, so prepare to pay these fees either directly to the inspector or through escrow,
unless you are able to negotiate with the seller to cover a portion or all of them.
Get a Copy of the Appraisal
Once you’ve made an offer to purchase a home, your lender may order an appraisal of
the home. An appraisal is an estimate of your home’s value based on the current housing
market, the home’s age, condition, and other factors. An appraisal amount is not the
same as a listing price, but rather an estimate of what a professional believes a home
is worth. Your appraisal will likely include comparables for a minimum of three similar
properties in your buying area; an evaluation of the overall market conditions nearby; and
detailed comments about the characteristics and features of the home.