Advice for First-Time Homebuyers in San Diego
Photo Credit: American Advisors Group
Buying your first home is a fun and exciting time, but it can also be a little overwhelming! If you’re looking for your first house in San Diego, here are a few tips and tricks that will hopefully make the process a little less stressful.
First, figure out what you do (and do not) want in a home - but be flexible. Knowing in advance what your “must-haves” are will help you and your agent get your San Diego home search off on the right foot. For example, if you have three dogs and need something with a yard, you probably won’t want to waste your time looking at downtown condos! At the same time, though, you need to keep an open mind. Inventory in the San Diego housing market remains very tight, so don’t be afraid to branch out and look at neighborhoods and home styles you wouldn’t necessarily have considered. Your dream home just might end up looking different than what you’ve imagined! See my Homebuyers Questionnaire for ideas!
Second, be patient - but willing to act fast. Again, home inventory in San Diego is still very tight, so properties don’t sit on the market very long in many neighborhoods! It may take you a bit of searching to find the perfect place, but once you do, be prepared to jump on it and put in an offer immediately if inventory is low in the neighborhoods/price range you’re looking in.
Part of being ready to snap up that dream home when you find it is to get pre-approved by your mortgage lender. This essentially means that your lender makes a written commitment to fund your home purchase. The pre-approval process will require you to provide your bank statements and investment statements, past two or three years of tax returns, proof of your employment status and salary, and your credit report. By getting a pre-approval, you’re signalling to sellers that you are a serious buyer and are ready to move! (See 16 Questions to Ask during Your Preapproval Process)
Pre-approval is also just the start of the paperwork, so it’s essential to have all of your financial documents organized. Once you put in an offer and it’s accepted, things will move very quickly! Having your financial information (again, bank statements and investment accounts, tax returns, pay stubs, credit report, and credit card statements or any other outstanding debts) on hand and ready to go will be very helpful.
Another thing you’ll need on hand and ready to go? Cash. One of the first things you’ll be asked to do upon signing your purchase agreement is to provide your earnest money deposit. This is a good faith deposit, showing the seller that you’re serious about the transaction. The money is held in a trust or escrow account until closing, at which point it will typically be applied to your down payment. While the details of the earnest money deposit may vary (always read your contract thoroughly!) the industry standard for paying your earnest money deposit is 3 days, so be sure you have enough liquid cash to make that payment! (Remember, if you’re planning to pull money from investment or retirement accounts, that typically takes at least 5 business days.)
Earnest money deposit? Points? Private mortgage insurance? As you start to go through the offer process, it will also be helpful for you to learn a little more about the real estate jargon! There are several good real estate glossaries out there to get you started. Here are a few definitions I think are important when you're starting your home search!
Also never be afraid to ask questions if you don’t understand something in your contract or loan documents!
Of course, the best tip I can give you is to work with a team you trust! You need to feel comfortable with your agent, your loan officer, and everyone involved in your first homebuying experience. And of course, I would love to be part of that team for you. If you’re thinking about buying your first home in San Diego County (north, south, east, or west), contact me today to set up a buyer strategy sessions o we can talk about your needs, your budget, and how I can help.
Also Read: The Informed Buyer
Also Read: Relocating to San Diego
Justin Gramm is the founder and principal broker of Globella Buyers Realty, your San Diego Exclusive Buyer Brokerage.
Exclusive Buyer Agents do not list homes for sale and never represent sellers. They have no "inventory" to try to sell you. They can represent you in purchasing any home. They are specialists at representing buyers only on the buyers' side of the transaction. Exclusive Buyer Agents work to get buyers the best price and terms when they buy a home.
If you have excellent credit and plan to buy a home or condo in San Diego County within 90 days, contact Justin Gramm to hire an agent on your side of the transaction. More about Justin Gramm on Google+. Call Justin at (858) 437-2662 or E-mail.