Home Buyer’s Guide
The home buying process is a way to go from wanting to own a house to actually buying a home.
Each step along the way will get you closer to your goal of home ownership.
1. To Rent or Buy is the First Big Question
List the pros and cons to renting or buying a home
List the pros and cons to renting a house or buying a home. Then assess the value to you and your family. The choice to be a homeowner or renter is a personal one. What is right for you? What is right for your current situation? It is that simple. If it is your goal to be a homeowner, then start the process today. It could take 2 years to get into your first home or 2 months. The Sacramento rental market is very high but most of the other cities are also high. How to value the rent paid and quality of life is part of the pro and con information.
Valuing renting
The difficult part is placing a personal value on the information to decide what is right for you, to buy a house or rent. In other words, the tax advantage of home ownership may be a very important value or maybe it has little impact on your taxes and therefore little value in the decision. Learn about the current housing market with the help of real estate professionals.
Lower risk of renting
The benefits of renting have a common theme of lower risk. The lower risk of capital because only a small outlay of money is required to rent. Typically the first and last months’ rents and a security deposit are required. The risk is less in renting because your initial expenditure is limited. No down payment funds or home loan needed to rent.
The monthly budget expenses are fixed when renting which save money every month. You know how much your month payment for rent is each month, so you can usually budget accordingly. Renting has this advantage over ownership because there are not as many add on costs like property taxes, maintenance issues and unexpected repair costs. Budget busting expenses are limited when renting.
Also renting affordability may allow the ability to afford to live in a community that is not affordable to purchase.
Mobility and renting
Renting affords greater mobility than home ownership. A renter can move much more easily than an owner. A house owner can put their home up for sale or become a landlord. Both come with time issues as well as life style impacts.
The rewards of home ownership
The rewards of home ownership focus on value and control. Home ownership can be free of any control. Freedom to choose where to live is a powerful benefit of home ownership. The power to decide the school district, transportation issues, neighborhood, and a host of other issues is a key benefit to where to buy.
The power of total control can be lost if the property has CC&R’s. CC & R’s (Covenants, Conditions and Restrictions) or other restrictions may have an oversight board like home owner’s association (HOA) that has some say about your property. Know before you buy.
Home ownership is an investment
Home ownership is an investment. But sometimes the investment does not work out as planned. Houses can lose value. When deciding on where to live, the profitability of a property is not the main concern but it can factor into the value of the property. Buying a home is considered by many to be a wise investment because typically, houses increase in value over time. And, as the years go by, you can build ownership interest, called equity. In deciding to buy a home how big a loan payment will be a big part of your monthly payment. You’ll want to look at the house’s total cost, not just the monthly payment. Consider how high the property taxes are in your chosen neighborhood, how much homeowners insurance will cost, how much you anticipate spending to maintain or improve the house, and how much your closing costs will be.
Financial benefits of home ownership
In most cases, as a homeowner, the property taxes and interest payments on a conventional loan, FHA or VA loan are deductible from personal income before paying federal or state income taxes. A few more benefits of home ownership are the pride of ownership and security of feeling comfortable in a stable home. The monthly mortgage payments are a way to build equality in the home. With an FHA or VA Loan there is a minimum down payment. To qualify the lender will check the debt to income ratio, credit rating and other factors. Check out the in-depth discussion on financial issue when buying home in Sacramento here.
“So, as I see it, the American Dreamer can be a renter or home owner. Live your dream.“
Dan Parisi
Making the choice to rent or buy
Think about the value of renting versus owning before you start the process to buy a home. In many cases it comes down to how much risk a person feels comfortable with. The long term value of a home and control issues are most important to many home buyers. Making the choice to rent or buy is made with a balance of information and personal life style values. The American Dream is talked about in home ownership terms but Americans like to be free, live their own lives their own ways, and create success for themselves in the way they define it. So, as I see it, the American Dreamer can be a renter or home owner. Live your dream.
How to begin looking for a home can create problems. Each person has their own priority of what is important. For some it is where to buy a home in Sacramento or in Placer County. Others, it is the must haves of the house the wants, needs and must have list. Coffee Real Estate works with home buyers to find the right home for them. Let’s begin the process today.
2. Creating a Home Prioritize Checklist
Our checklist has lists of features that enable the home buyer to mark in 5 ways. You can feel confident about the home-buying process and save yourself from worry by having a professional on your side. The checklist created with the help a real estate agent will have tips for First Time Home Buyers. You can use the home checklist to learn about the current housing market in Sacramento California.
The 5 ways to prioritize the features of a house is a crucial part of the a prioritizing checklist design
- Must Have
- Would Like
- Willing to Compromise
- Must not have
- Not Important
The spaces in the prioritizing checklist can be checked or write in a dollar amount to fix or adjust or it can be used to put in a comment. There are must haves, would like to have, willing to compromise, must not have and not important. The spaces can be checked or write in an amount or even put a comment.
Below is a website table of the prioritizing checklist. Use this link to get a PDF copy. \
| Prioritize the options | Must Have | Would Like | Willing to Compromise | Must not have | Not Important |
| Square feet of house | |||||
| Bedrooms number? | |||||
| Bathrooms number? | |||||
| Family room | |||||
| Formal living room | |||||
| Formal dining room | |||||
| Eat-in kitchen | |||||
| Gourmet kitchen | |||||
| Laundry room | |||||
| Basement | |||||
| Finished basement | |||||
| Attic | |||||
| Fireplace | |||||
| Spa in bath | |||||
| Air Conditioning | |||||
| Wall-to-wall carpet | |||||
| Hardwood floors | |||||
| Tile | |||||
| View | |||||
| Window features | |||||
| Shade | |||||
| Yard at least…… | |||||
| Garage size, ___cars | |||||
| Patio/Deck | |||||
| Pool | |||||
| Special needs design |
See How to Create a Home Prioritize Checklist
What questions will help you find your home?
There is more than one way to understand what you are looking for in a home. Below is a question list to generate ideas of what you are looking for in a home. A more informal checklist is a series of questions. Following is a short list of the questions that may come up when looking for a first home. Use the checklist to communicate with the real estate agent.
- What neighborhoods do you prefer?
- What school systems do you want to be near?
- What architectural styles do you prefer?
- Do you want a two story or a one story?
- How old a home would you consider?
- How much repair or renovation would you be willing to do?
- Are there enough bathrooms to serve the needs of your family now and in the near future?
- Is there plenty of storage space and is it easily accessed?
- How far is the home from work, school or recreation?
- How close do you need to be to public transportation?
- How old are the heating, cooling and roofing systems and are they in good working order?
- Will your furniture fit in the new spaces?
- Are there comfortable spaces for any overnight visitors?
- Will pets be comfortable in the new surroundings?
- Does the community have pets’ restrictions?
- Are you a Veteran? Can you use a VA loan?
Final thought about checklist
The joy of discovering your new home can be a reality on the very first house you visit. The home checklist will let you know when you find your home. When you know what you are looking for and you find it, you can make an offer with confidence even on the first home you visit in person. Experience the confidence of home buying with a personal home checklist. This eight step buying process can be up to 12 steps to buying a home when the financial process is added.
The list is not endless, but it is long. Talk it out. The fullest list of features is a help when looking for a home. A checklist will be a nice house hunting aid to evaluate the properties to see which one will be the best home.
3. Find the Dream Home
Everyone’s dream home is different. Let’s find one for you.
How to begin looking for a home creates a problem. Each person has their own priority of what is important. For some it is location. Others, it is the must haves of the house. The list below is just that, a list. It is not the order of importance. The steps to buying a home become more real when you find the dream home.
Location value points for a home
Location is the community or neighborhood of individual homes. The old adage, the three most important things when looking for a home are location, location, location is true in more than one way. But in all seriousness, the neighborhood is extremely important to the happiness in the home. Take care and examine the area carefully. The Sacramento neighborhoods offer many types of houses, quality of life and affordability.
Know what the community can offer and not offer. This can be very vital to the happiness of life in the area. Can living in that area help with the commute or not? Is there public transportation or not? Is there a good coffee café or not? Noticing what is there and what is not there is a good starting point.
The price range of the house
The price range of the house is a strong limiter of the home search. Feel free to use the house search tools to look at all the multi-million dollar homes you like. But when ready to find your home, use the price range to narrow your search. This restriction actually makes finding a home realistic. The price range is important for the down payment assistance and lending issues with a conventional loans, FHA or VA Loan. It is important to have all the facts about the price range before looking or there can be a lot of wasted time looking in the wrong place for your home.
How do you find homes for sale?
The most important tool for people looking to buy a home is the local MLS. The MLS has the most up to date list of properties. This saves a lot of time and hope looking at homes that have already been sold.
What is the MLS?
The acronym “M.L.S.” stands for Multiple Listing Service. The MLS is a database of properties available for sale and represented by a real estate agent in a given area. The MLS in northern California area including Sacramento is MetroList.
The MLS creates the framework by which real estate agents like, Dan Parisi who is a broker and realtor, agree to cooperate and compensate one another. There is also a high level of supervision by the system administrators, which provides accuracy and professionalism, reducing fraud.
The most important tool for people looking to buy a home is the local MLS. The MLS has the most up to date list of properties. This saves a lot of time and hope looking at homes that have already been sold.
Another benefit of the MLS system is that they contain hundreds of features about a property. The property features are set by real estate professionals whereas public real estate websites contain only a small section of the property’s information.
The local MLS is the best way to get information about properties for sale in your area. Coffee Real Estate of Sacramento and Gold Country uses the MLS information to give property search data.
The house’s features are an important decision point
Floor plan could be the most important issue when looking for a home. There can be very particular needs that the house must fulfill. The right home floor plan could be the deciding factor in where to live.
The style of the home is important to many aspects of finding the perfect home. The home should reflect the buyer in some part. They may want a formal Victorian style home. Or something simpler and more contemporary might fit the lifestyle.
4. Visit the Community
Experience the neighborhood before owning the neighborhood. The look and feel of the neighborhood before owning the house is vitally important.
Driving through a neighborhood can give a person some idea about the community, but getting out and walking the neighborhood experiences it firsthand. It is essential to visit the neighborhood different times of the day. Listen for late-night noise. Many college areas or an area with a lively bar scene can be very loud at night.
Ask the hard questions before buying the house.
- How is the traffic?
- How are the houses kept up?
- Is there music or other noises?
- How does the area smell?
- Are the streets well-lit at night?
- Are people outside or inside?
- Are there children playing outside?
- Are the neighbors friendly?
- Or are they suspicious of other people?
Visualize yourself in the neighborhood.
- Can you see yourself jogging these streets?
- Do you feel good walking the dog?
- Is this the neighborhood you can call home?
- Do you like the parks?
- Do you like the way the area looks?
- Do you feel secure in the area?
If so, then move forward to find the first dream home.
5. Schools, Shopping and Crime are the big 3 to evaluate when buying a home
Schools
School information is vital when looking for a new home. Families looking for a home have a big decision to make about which school district to move into. If there is a special school, double and even triple check with the school that the exact property address is in the district.
Finding good school information can be a challenge.
- Who do you trust for the correct information about schools?
- Where do you start looking?
- How do you balance all the school issues when choosing a home?
- What is important to you about a school?
- Is the education standard the most important?
- Is the sports program?
- Do they have music and drama programs?
- What is the schools reputation with parents?
- How modern is the school building?
- How secure and safe is the school?
Shopping
hopping areas are very important to quality of life. Knowing what shops are essential when looking for that first home is the key to getting the shopping preferences. Know what shops are preferred in walking distance. The main food stores that are in the area are generally very important. What specialty shops are desired?
If coffee shops are important, check them out first. Shop the area to check if the experience is acceptable. Remember, neighborhoods change and so do the shopping centers. Businesses come and go.
Crime
Research the area’s crime reports. Use the internet search feature to find important data about the neighborhood. Ask people when you walk the area about the crime issue. Check out the houses. If they look like barricades and urban forts, it may say something about the crime in the area. Talk to the police about the street and general neighborhood for some information. Take ownership of this issue.
Megan’s Law
When looking for a new place to live, one of the things to be aware of is the sex offenders in the area. The sad fact is they are everywhere. The map is full of blue dots showing the location of sex offenders. You can click on a dot and get a photo with the name and address of the sex offender.
To start a Megan’s Law search, follow the simple steps or just go to http://www.meganslaw.ca.gov.
The first step is the Megan’s Law Disclaimer. You must read and acknowledge the disclaimer at the bottom of page before it will let you see the list of registered sex offenders.
Then you simple select search options like zip code, city, address, name and county.
Checking the big three issues of a neighborhood is a little work, but yields a big dividend. Knowing for yourself about the schools, shopping and crime in a community will give peace of mind when buying the first home.
“Knowledge dispels fear.”
David Gandy
6. Recognizing the Dream Home
All the preparation of finding the right neighborhood, knowing the correct price range and having a clear picture of the house wanted now come together in finding the right home.
Finding a Home
Working with a professional agent is the best way to find the home of your dreams. The process of finding a home is well on the way with the checklist, finding the right neighborhood and knowing your price range (check out the financial guide).
The work to find the right neighborhood has narrowed down the geographic area. The purchase price will set up the pre-qualification process help find out if there any credit report issues. This all narrows down the price range of the home. The house check list has given a detailed list of the features wanted and needed in the home. There can be creative ways to buy a dwelling in Sacramento.
Recognizing the Dream Home
Now the work of looking at all the houses on the local real estate market can begin. All the preparation of finding the right neighborhood, knowing the correct price range and having a clear picture of the house wanted now come together in finding the right home. And if that community is in the greater Sacramento area, feel free to work with a Coffee Real Estate professional agent.
The pre-qualification process has narrowed down the price range of the home. The house check list has given a detailed list of the features wanted and needed in the home.
Get the list of homes filtered by location, price and features of the house
The acronym “M.L.S.” stands for Multiple Listing Service. The MLS is a database of properties available for sale and represented by a real estate agent in a given area. The MLS in the northern California area including Sacramento is Metrolist.
Internet sites like Zillow, Trulia, and Realtor.com get their information from the MLS. The key thing for home buyers and sellers to know is that these sites don’t always have the most up-to-date or accurate information. They are helpful and frustrating at the same time. Many of the listings are sold, but not updated. This leads to many uniformed home shoppers liking an already sold property. This can be very maddening.
Go above the standard way of finding your dream home
Property searches can take a long time to find the right home. Coffee real estate agents also search the “For Sale By Owner” FSBO market for their clients. This is very rare in the real estate business.
Also, Coffee Real Estate has a data base of real estate investors, flippers, out of state owners and even pre foreclosed properties to check for the first time home buyer. Communicating the community, price range and style of house all help find the perfect home.
Coffee Real Estate also has a program to find homes not for sale for the first time home buyer. Coffee Real Estate and the agents will market, go door to door and contact owners of property in the correct community and price range for our buyer. This is a very unique commitment to superior service.
Sometimes finding the right home is finding the right real estate agency to work with first. Find a real estate agent in your area that understands the local housing market. Dan Parisi is a Sacramento and Placer county local real estate market expert.
When it comes to make an offer on the home you could find yourself in a bidding war with multiple offers. You want to make sure of the home values in the local area and make your best price offer. The home purchase is part of the home buying process and just one more skill to master. Know the Sacramento housing market and home values will give you the confident to make a strong offer to buy the home.
7. Making an offer to buy a home and Real Estate Problems
Winning — The point of making an offer to buy property is to gain acceptance from the current property owner.
Different real estate markets have different rules for success. In some markets, just putting in an offer wins the deal. Other markets, a bid of ten thousand above list price will not win the home.
Understanding the current market is crucial to making a successful offer.
Discuss with your real estate the offer amount you have in mind, based on the research you have done on comparables, the condition of the home and its components based on the inspection, and what items may or may not be included in the sale.
Your real estate professional will help you fill out the paperwork to make the offer official. Your agent will present the offer to the seller’s agent, who will take it to the seller. The owner can accept the offer as is, reject the offer or make a counter offer. A counter offer amends either the price or the contract stipulations, such as inclusions, earnest money amount, contingencies, or time schedules such as closing dates, possession dates, etc. Any change to the original contract proffered by the buyer is considered a counter offer.
Once you are dealing with a counter offer, you are in the negotiation process. You can now accept, reject or amend the seller’s counter offer. It is not unusual for offers to go back and forth between the buyer and seller several times before compromises are made or the deal fails. The offer does not become a contract until all items and stipulations are agreed upon and both parties sign.
Contingencies are conditions that must be met for the contract to be executed. In real estate, contingencies may address appraisals, loan approval, and home inspections for termites, radon, lead-based paints along with many other possibilities. Contingencies sometimes include the sale of the buyer’s current home as well, which won’t apply to you as a first-time home buyer.
Negotiations are a big part of the back and forth counter offers and building the case for an offer to be accepted by the seller. Dan Parisi, northern California Coffee Real Estate agent, negotiates to win the acceptance of an offer for his clients. Constructing a strong case for his client, be it a first time home owner or a seasoned investor is a prime motivator for him when preparing an offer to buy real estate.
Buying a home is not easy. Knowing all the legal issues to transfer a property is a full time job for many people. Here is a list of a few people working full time on this one issue: the county recorder, escrow officers, title personnel, transactional professionals, real estate lawyers, property tax personnel, real estate accountants, trust and probate specialists and the county assessor just to name a few. Notice I did not say real estate agent, broker or realtor because the transfer of real estate is part of our duty. And I hope you noticed the transfer is just one of the problems we run across when buying a home. But we at Coffee Real Estate are here for you every step of the way. Both the good and the hard parts we use our expertise to help you.
A home inspection is very important to know if there is any problems with the house. The certified home inspectors should perform a comprehensive examination of the important structures of the building. Home inspections represent the time to find the defects on the home in the real estate transaction. The home inspection contingency should cause the sellers to pay for the defects the home inspector found before closing. Home inspections are not only good for first time homebuyers but even real estate investors.
How to Beat a Cash Buyer on the Home You Want
Want to win is the key. Win on price and win the emotional game are the keys to victory.
Generally speaking, when find yourself in competition with an all-cash buyer for your ideal property it is hard to win. Most realtors say “brace yourself for disappointment”. Cash buyers are tough to beat, but it can happen with the right plan. Not all cash buyers are savvy real estate buyers.
First, diligently get your financing in order. Be ready for the perfect house to come on the market. Get per-approved (which carries more weight than a pre-qualification) by your lender and attach the pre-approval letter to your offer.
Next, look for the ideal property every day. When the just right home, in the just right community, with the perfect back yard to boot is there, be ready to make an offer. If you make an offer before the cash buyer shows up, you win.
Make an offer with speed of inspections on your side. Have your team of inspectors ready. Once your offer is on the table, send in the home inspector. Make the inspections happen in a matter of a few days. This can beat many cash buyers. Having your ducks in a row and consistently executing things like home inspection without missing a beat relays your competence and interest. This shows the seller you are ready. Speed of sale is important to many sellers.
Cash buys are notorious low-ballers. Bid your best offer up front and take all the advantage of a cash offer away. In the end, most property sellers want more money at the end of the deal. Give them that and you can close the deal.
One more important issue is the emotional element. Cash buyers are generally investors. “I am going to make money when I buy your home” is an emotion. But you share how you are going to make this house a home. Sharing things you like about the house and community will win you points with the home seller. Talk about how you are looking forward to meeting your new neighbors. Their old friends and neighbors could be very important to them. And finding them a quality neighbor like you will win them points and may just get you that new home.
Reach out to Dan Parisi real estate professional to help you win your dream home.
Real Estate Transaction Issues
1. The real estate transaction is complicated. It is difficult because of all the moving parts. There are the legal issues. The first time home buyer is overwhelmed by the amount of paper work to be viewed, understood and signed. Many times this is the first time they need a notary to witness the signing of a document. This brings home how legal the process really is.
2. There are the personality issues. The buyer and seller are just a few of the people involved. There are their friends and family passing on all their experience and wisdom. Sometimes there are hidden agendas to kill the deal for their own reasoning. The agents personally get in the way of some deals. The seller’s agent professionalism or lack thereof also can create problems in the real estate process.
3. All the people involved with a real estate transaction produce people issues with all compliance issues, work habits, misunderstanding and finance issues. The escrow people, service works, appraisers, real estate agents and government personnel could get involved. Add to that inspectors and a host of other people could be involved in the real estate transaction. This creates an atmosphere of complexity and potential problems.
4. Many real estate problems can be monetarized. When making a real estate problem into a dollar amount, the solution can be understood by most of the parties involved. If the parties want the deal to close, than there is a great chance that almost any problem can be overcome. But if one of the party to the deal does not wish the deal to close, than even the smallest problem can kill a real estate deal. Home inspections are very important to the home buyer. The money issues are the closing costs, down payment, the mortgage even fha loan, the homeowners insurance all can create last minute money problems to close escrow.
5. This is where a real estate company is worth the commission paid. If they can come up with creative and continual solutions to problems, they will enhance the ability to close the deal on the first time home buyer’s home. Coffee Real Estate believes in a team approach to closing real estate transaction. We are committed to bringing all the right people to the table to solve the myriad of real estate transaction problems.
6. The key to understand for the first time home buyer is that there will be real estate problems when trying to close a real estate transaction. Problems are not a sign of anything wrong, until they cannot be solved. Accept that there will be problems in the real estate transaction. It is part of the process. Be confident in the professional team that assists in the transaction to solve the problems.
“If it can be solved, there is no need to worry, and if it can’t be solved, worry is of no use.”
Dalai Lama 14th
7. But there are some unsolvable problems. Sometimes the property title is not transferable. If that happens, the deal will die until and if the title can be made to transfer. But as a home owner, the ability to sell the property is an important value of the property. Therefore you do not want to get stuck with a nontransferable property. That is a big problem. It is better not to close a deal like that than be trapped in a property.
Work with the real estate professional team to know when it is good to have a transaction not close.
Real estate transaction problems are part of the process. Solving them is part of the professional services Coffee Real Estate devotes significant time and resources. Coffee Real Estate’s commitment to clear client communication helps with understanding these issues and the process to resolve them.
Real estate is complicated to buy
Real estate is not like buying a car. Buying a car is simple you find car, you do paper work, you pay for the car, you own car.
The Real Estate contract to buy does not always end in the sale of the house. Completing the transaction is a difficult and problem filled process. Escrow is a process where a neutral third party acts as the closing agent for the buyer and the seller.
8. The goal “Home Ownership or Bust”
The real estate and mortgage problems get solved along the way and the home will close (close is a way of saying the transfer of ownership was successful, the deal closed). Or there are problems that make it so the property does not close. First, if it closes, the owners have a new home. They make a property sale into a new home. Fantastic, the American dream is realized. Another happy home owner enjoys the journey of home ownership.
But if it fails to close, it is not the end of the journey. The want to be homeowner, buyer can keep going. If the deal fails because the borrower cannot get a real estate loan at this time, the journey can take a substantial time lapse so that the borrower can make the changes to get qualified to get a mortgage loan.
But if the property part of the transaction failed, then it is on with the search for a new property. The first time home buyer has difficulty with not taking it personal. Not every real estate transaction closes. That is a fact of life. It is wise for the first time home buyer not to put their heart into the property until they get the keys. Because if they do put their heart into a property before it is closed, they will lose heart if the deal goes bad. Then it is difficult to keep going. These steps to buying a home can help with a clear understanding in the home buying process.
When you lose the house you wanted
When a deal goes bad or does not close don’t take it personally. Keep focused on the dream. And take the next step of starting the home search immediately. Find the houses that are in the area you want start looking. Who knows, you may find a better home. But life is hard sometimes and the house you just lost may be the one you wanted. That is hard. But drive up and down the streets and see how few homes have for sale signs. That small number is the pool of houses you can buy at any given time. I think finding the best home on the current real estate market is the best you can do. So let’s do the best and find your new home together.
How to begin looking for a home can create problems. Each person has their own priority of what is important. For some it is where to buy a home in Sacramento or in Placer County. Others, it is the must haves of the house the wants, needs and must have list. Coffee Real Estate works with home buyers to find the right home for them. Let’s begin the process today.
