10 Steps to Buying a Home in San Diego

From Chula Vista to Fallbrook and everywhere in between, San Diego has hundreds of communities that can match any lifestyle. But, buying a home requires a lot of time and effort. These 10 steps can help make the home buying process smooth and easy.

Step 1: Research Neighborhoods

As soon as you can, start researching neighborhoods that may meet your lifestyle. Does it have a dog park? Great coffee shop? Amazing schools? Do your research and make a shortlist of potential neighborhoods. Then, make a note of particular homes you are interested in and see how long they stay on the market. Also, make a list of things a home absolutely must have to make it on your shortlist. This will give you a sense of the housing trends in specific areas.

Want to know what’s on the market today? Use our free Listing Search tool!

Step 2: Determine How Much House You Can Afford

Lenders generally recommend that people look for homes that cost no more than three to five times their annual household income if the home buyers plan to make a 20% down payment and have a moderate amount of other debt. But remember, you don't need to have a 20% downpayment. In some cases, a down payment of 3.5% is enough to get you into a home! 

Are you not sure about what you can afford? Many banks and financial websites have affordability calculators that can help you estimate what you could afford. You can also use this home loan analysis to get more information.

Step 3: Get Prequalified and Preapproved for credit for Your Mortgage

Before you start looking for a home, you will need to know how much you can actually spend. The best way to do that is to get prequalified for a mortgage. To get prequalified, you need to provide some financial information to your mortgage lender, including your income, savings, and investments. Your lender will review this information and tell you how much you can afford. Later, you can get preapproved for credit, which involves providing your financial documents (W-2 statements, paycheck stubs, bank account statements, etc.) so your lender can verify your financial status and credit.

Step 4: Find the Right Real Estate Agent or Realtor

Real estate agents are important partners when you're buying or selling a home. Our San Diego real estate experts can provide you with helpful information on homes and neighborhoods that aren't easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with San Diego can be extremely valuable. And best of all, it doesn't cost you anything to use an agent – they're compensated from the commission paid by the seller of the house.

Are you interested in starting today? Click here!

Step 5: Shop for Your Home and Make an Offer

Let the fun begin! Once the paperwork is done, you can start looking for your dream home. It might be helpful to take notes on all the homes you visit. You will see a lot of houses! It can be hard to remember everything about them, so you might want to take pictures or video to help you remember each home. Also, make sure to notice the little details on each home and neighborhood. Take as much time as you need to find the right home. Sometimes you find “the one” in the first week. Sometimes, it takes months. Either way, it’s OK!

Once you have a favorite home, work with your real estate agent to negotiate a fair offer based on the value of comparable homes in the same neighborhood. Once you and the seller have reached agreement on a price, the house will go into escrow (the period of time it takes to complete all of the remaining steps in the home buying process).

Step 6: Get a Home Inspection

Typically, purchase offers are contingent on a home inspection to check for signs of structural damage or necessary fixes. Your real estate agent will help you arrange to have this inspection conducted within a few days of your offer being accepted by the seller. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.

Both you and the seller will receive a report on the home inspector's findings. You can then decide if you want to ask the seller to fix anything on the property. Before the sale closes, you will have a walk-through of the house, which gives you the chance to confirm that any agreed-upon repairs have been made.

Step 7: Work with a Mortgage Lender to Select Your Loan

Lenders have a wide range of competitively priced loan programs and a reputation for exceptional customer service. You will have many questions when you are purchasing a home, and having an experienced, responsive loan officer can make the process much easier. Every home buyer has their own priorities when choosing a mortgage. Some are interested in keeping their monthly payments as low as possible. Others are interested in making sure that their monthly payments never increase. And still others pick a loan based on the knowledge they will be moving again in just a few years. Our experts can help you find the right lender for you.

Step 8: Have the Home Appraised

Lenders will arrange for an appraiser to provide an independent estimate of the value of the house you are buying. The appraiser is a member of a third party company and is not directly associated with the lender. The appraisal will let all the parties involved know that you are paying a fair price for the home.

Step 9: Coordinate the Paperwork

As you can imagine, there is a lot of paperwork involved in buying a house. Your lender will arrange for a title company to handle all of the paperwork and make sure that the seller is the rightful owner of the house you are buying.

Step 10: Close on Your New Home

Congratulations! You are almost done with the home buying process. At closing, you will sign all of the paperwork required to complete the purchase, including your loan documents. It typically takes a couple of days for your loan to be funded after the paperwork is returned to the lender. Once the check is delivered to the seller, you are ready to move into your new home!