Even if you are not a seasoned investor or buyer of Orange County real estate, chances are you have heard about the numerous advantages of home ownership. Mortgage payments can be tax deductible, and equity can increase over the years. Rent prices are likely to rise, but most monthly mortgage payments will stay the same as the day you purchased the home.
Owning a home can be an effective hedge against inflation. The fact that a home owner has the power to customize and modify a home to their individual tastes and preferences only adds to the appeal.
Liquidity and a higher price of admission are two drawbacks that are often mentioned by those who would seek to rent in favor of buying a home in Orange County, California. But as the highly useful and informative rent versus buy calculator linked to here shows, buying a home is a more effective wealth building strategy than renting, especially when buying a home is cheaper or around the same price.
Setting a Budget
Note this step comes before the actual process of searching for a home. Apart from location, the price is often the single most important factor buyers consider when looking for a home. Starting the search from a position of knowledge is the key to using your time effectively. Whether you prefer to contact a local mortgage broker or research your options for financing online, it is important to understand the differences between a letter of prequalification and a letter of preapproval.
A prequalification is based on trust and a preliminary discussion. It’s good for getting a ballpark idea of what you can afford, but that is about it. In contrast, a letter of preapproval is based on hard data and a thorough review of your financial situation by a qualified professional. It’s essential for giving you a real idea of where you stand, and many sellers require one before they review an offer.
Down Payment & Closing Costs
Of course, down payments and closing costs factor into what you can afford to spend on a home in Orange County. An important point to remember is that it is not required to have a 20 percent down payment; in fact, in many situations, it can be possible to buy a home with a down payment as small as 3.5 percent. For some, it can even be possible to obtain 100 percent financing.
As mentioned above, a higher price of admission is often a barrier to home ownership. Closing costs can be significant in some cases, as they can vary between two and five percent of the contract price. The good news, however, is that these fees can sometimes be rolled into the loan or even paid for by the seller, provided you are working with a competent and knowledgeable agent, such as a representative from Keza Realty.
Finding a Home
This is the fun part—when all the boxes have been checked and you have a solid idea of what you can afford. Searching for a home is an exciting process, though it is often not as easy and fast as the TV shows would have you believe.
As the well-worn adage will tell you, location is the most important factor to consider, since it will have a substantial impact on your quality of life and the home’s future value. In this critical phase of the buying process, it’s vital to work with a local neighborhood expert such as Amber Martin (link to Bio), a lifelong Orange County resident, who can provide you with useful guidance and relevant information.
After a specific neighborhood or a number of target areas have been successfully identified, it will be worthwhile to answer more questions, such as: How many bedrooms do you need? What style home do you like? How close do you want to be to friends and family? Would you rather have a large lot and a quiet setting or close proximity to the conveniences of the city? What school district is the property located in?
Answering these questions is a lot easier when you are working with an experienced agent (link to contact page), who can help you sift through your options effectively and decide which factors are most important to you.
Making an Offer/Negotiations
The next step in the process, once a home that checks all the boxes has been found, is to submit an offer. Figuring out a good opening point in the negotiating process can be fairly complex. After an offer has been submitted to the seller, the process gets even more complicated. Many other factors such as repairs, contingencies, and timelines also have to be negotiated and managed effectively to ensure your interests are protected.
As with many other things in life, it pays to work with an expert. All of the agents on the Keza Realty team are supervised by Amber Martin, a highly skilled negotiator with a thorough understanding of California real estate laws and the purchase contract.
After a purchase price has been agreed upon by all of the involved parties, there are many other facets of the transaction that need to be successfully managed and researched in order for the deal to close on time. This period between the date the home officially goes under contract and the closing date is known as the escrow period, and the timeline can vary significantly from transaction to transaction. Having a knowledgeable, trusted advisor on your side to consult with you during this time can be the difference between a stressful experience and a positive, seamless transaction.
This article only scratches the surface of what is involved with the offer process and the escrow period. To cover these two subjects effectively, an entire article would be necessary. If you have questions, or would like to have a comprehensive discussion about your search for an Orange County home or Orange County investment property, contact a representative from Keza Realty today.