Buyer’s Guide to San Diego Real Estate
Prequalification to Buy San Diego Real Estate –
Unless you are paying in cash for your next home, you are probably considering getting a loan from a lending institution. The prequalification process will let you know your estimated monthly payment, as well as the house prices you can afford depending on your down payment.
To calculate the amount of available income you have for mortgage payment, banks will look at your monthly income and debts, banks are interested in being paid back so they want to make sure that your total debt does not exceed 36-42% of your monthly income. This percentage is known as the mortgage-to-debt ratio. For example if you make $4000 in monthly income and have $1000/mo dollars in debt, at a debt ratio of 40% you can only have $1600 in total debt, which leaves you with $600/mo for mortgage payments.
After looking around the San Diego Real Estate market you will probably find a home that is suitable to your needs and wants. At that point, you will likely draw and submit a Purchase Offer with the assistance of real estate agent.
Acceptance of Your Purchase Offer to Buy San Diego Real Estate will depend on whether your offer or subsequent counteroffers are accepted. Usually, a seller will counter offer your first offer, and after some back and forth with counter offering a purchase agreement will be reached, at that point your real estate agent will assist you in the commencement of escrow. Escrow is simply a third party intermediary that works with the seller’s and buyer’s agents to make sure that all documents and funds are directed and dispersed according to escrow instructions written by the seller, as agreed by seller and buyer.
To complete a real estate transaction there are various contingencies that must be executed as stated in the Purchase Agreement? The period in which you are trying to meet these conditions is called the conditions stage. All contingencies must be satisfied or waived before the sale of San Diego real estate can move toward closing.
Contingencies address the clearance of significant conditions prudent buyers and sellers have regarding the transaction, including financial conditions (mortgage availability, price corroboration by appraisal since loan is dependent upon the result of the bank’s appraisal, etc), operating conditions, title and zoning conditions, physical conditions, and location-related conditions.
Two of the most important Contingencies when purchasing San Diego Real Estate are the title search and appraisal. Appraisal is important because usually banks will not loan more than 100% of the value of the home being purchase. If the house appraises for less than the purchase price in most cases the bank will still lend you the money, however you are responsible for covering the difference between the purchase price and the appraised value (this means your down payment will be bigger). As an alternative, you may let the purchase agreement expire and continue searching for a different home, or renegotiate the price. Similarly, the title search is an equally important condition to a successful escrow. You want to verify that the property you are buying is free and clear on any liens and encumbrances that you may not be aware of, and if there are any “clouds” over the title, these are resolved by closing. In California, title searches are conducted by title insurance companies.
Closing Escrow and Moving in to Your San Diego Real Estate –
Once all contingencies are met, and/or waived escrow can proceed toward closing, funds can be disbursed, and deeds can be recorded, etc. At this time, you are likely to get keys to your new home and you can move in to your new home.
Purchasing San Diego Real Estate can be difficult at times, but this was an overview of the traditional transaction so you can be informed about what to expect. With the change in RE market in recent years new challenges have arisen, San Diego Real Estate now boasts a load of REO’s and short sales. These terms are quite prominent in the San Diego Real Estate market, but what they mean is quite simple. REO’s are bank-owned properties that are sold “as-is” and short sales are homes that are being sold by homeowners who can no longer afford their mortgage and are trying to negotiate to sell their home for lesser than they purchased, at a loss. The negotiation process in both of these transactions is quite daunting, and requires a skilled negotiator to push such transaction through, which take longer than a traditional transaction.
Paul Easton is writer who is writing on San Diego real estate and giving us idea of most expensive place in San Diego. To know more – http://bay-realty.com/
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