8 STEPS TO BUYING A HOUSE IN CALIFORNIA, USA

 8 STEPS TO BUYING A HOUSE IN CALIFORNIA, USA

Buying a home in California, USA, is certainly an exciting adventure. To make it as seamless as possible, Investir US offers you eight steps to follow. Follow the guide.

What do you need to know about the California real estate market?

The California real estate market is a seller's market. This means that buyer demand exceeds the number of properties listed for sale. Currently, this explains why most properties are quickly removed from the market.

Property values are rising: In 2022, home prices in California are expected to increase by 8.4%.

Mortgage interest rates are low: in California, they average 2.34% for a 15-year loan and 2.88% for a 30-year loan.

Step One: Start by assessing your financial situation

If you're considering a mortgage to buy a home in California, USA, it's essential to understand your financial situation and how it affects your purchasing options.

Your credit score is the primary indicator of your financial health. While low-interest loans are available, the requirement to qualify is a score of at least 620. If your score is below this level, there are ways to improve it.

Debt-to-income ratio: Most banks work on the basis of a rule that each month, 36% of your income should be spent on your debts (this includes repaying your loan).

The initial contribution: to consider a traditional mortgage, you will need to advance at least 20% of the sum.

Closing Costs: Home buyers typically pay between 2 and 5 percent of the property price in closing costs or transaction fees. Based on the average home price in California of $599,159, this translates to between $11,983 and $29,958. This amount is the buyer's responsibility to cover out of pocket, so it's important to make sure you have the savings to cover these costs.

Homeownership costs: In California, homeowners typically spend $2,802 on maintenance costs per year. Of course, this varies depending on the property. The general rule of thumb is to spend 1% of the home's value on repairs each year.

Step Two: Choose the Right Neighborhood

Is it important to specify? The neighborhood in which your property is located is just as important as its layout and features. Generally, there are two main factors to consider when determining the best neighborhood for you:

Home values: Looking at the average home value in the neighborhood you're interested in will help you determine if you can afford to live there. Historical property valuation trends will also tell you if your purchase will be profitable in the long run.

Local lifestyle: A neighborhood can have a significant impact on all aspects of life, from daily travel to what affects your professional life.

Step 3: Get help from a real estate professional

Your real estate agent will be your main ally during the buying process. They will not only show you properties for sale, but also refer you to other professionals such as lawyers, lenders, and escrow companies.

Once you have found the home of your dreams, your real estate agent's role will be to help you acquire the property at the best price.

Step Four: Get Pre-Approved for a Home Loan

A pre-approved mortgage is a type of document that allows you to show your credentials to the seller. Indeed, without this pre-approval, many sellers simply refuse to show their homes. The California real estate market is a seller's market; sellers are in a strong position and don't want to waste their time with buyers who aren't financially serious.

Getting pre-approved for a mortgage gives you and the seller the confidence that if they accept your offer, you'll be able to secure financing and close the deal.

Step Five: Look for a house to buy in California

With the Covid-19 health crisis still very much present, the current trend is toward virtual tours. It's important to inquire with real estate professionals about the measures in place to ensure everyone's safety during tours.

When planning your life, it's a good idea to make a list of priorities beforehand. While some things are non-negotiable for you (e.g., one floor, two bathrooms, etc.), others can also be left aside.

Step Six: Make an Offer

You've found your dream home and are ready to buy a house in California, USA. Now it's time to make an offer and convince the seller. Act quickly: the most desirable properties don't stay on the market for long (around 40 days). If your dream home has been listed for a long time, don't wait to submit your offer.

Step Seven: Inspections and Evaluations

The seller accepts your offer? That's great; now it's time to go through the essential step of inspections and appraisals. If anything unexpected arises, you can return to the negotiating table.

Inspections are conducted by a licensed professional who checks the home for any hidden, unexpected, or potential issues. Appraisals, on the other hand, are conducted by an appraiser hired by the lending institution, who is responsible for assessing the property and determining its value.

Step Eight: Finalize the Real Estate Transaction

Before closing the transaction, you can take a final look at the property to ensure it meets your expectations. Put your enthusiasm aside and focus on not missing any details. Ceilings, walls, possible leaks... Everything will need to be checked.