Having sold homes in and around Pasadena California for many years now, I’ve seen a lot of situations where Pasadena home buyers find a home of their dreams, but somehow going through the steps of the home purchase they make decisions that jeopardize their transactions.
If you are thinking of buying a home in Pasadena or are in the middle of a real estate transactions, I am hoping that these home buying tips will help you. They are not in any particular order, but each of them is critical and important in their own way.
- Do NOT, and I mean, absolutely do NOT, quit your job in the middle of escrow. Home buyers, sometimes think that if they have already been approved for a home loan, they will be fine quitting or changing jobs after the fact. Unfortunately, that’s one sure way to be declined for your home mortgage. Banks will verify employment and salary just before funding your home loan. Funding usually takes place 2 days before you close escrow on your new Pasadena home. No verification, no funds, no sale.
- Home buyers – honestly – sometimes, you just talk too much. Some of you have a tendency to talk away with the home seller prior to getting your offer accepted and disclose a ton of material information that should be kept confidential. If you have any questions, have your real estate agent ask them. Stop talking. You think that you’re finding out stuff about the house, but in actuality the home seller is learning more about YOU! Let the real estate agent do their job and negotiate on your behalf. After the contract is sealed, you can talk away all you want.
- You, the home buyer, didn’t meet with a lender for a complete consultation to get preapproved and did not set a budget for your home purchase. It’s important to understand how much you are able to afford before you make an offer on your home. Once you find your Pasadena home, you will start incurring costs – for home inspections, sewer line inspections, appraisal, permits, etc. If you did not do your due diligence and did not take the time to sit down with a lender, complete a full application and provide all the requested paperwork, you don’t really know if you’re qualified for a loan on that home.
Pre-qualifications, where lenders just do a quick analysis over the phone without submission and full underwriting review, mean absolutely nothing. As we say in the real estate business, prequals are not worth the paper they’re written off.
Ensure that you have been fully approved for your mortgage and you understand what your budget is.
How much money should you borrow from the bank? The rule of thumb in real estate lending is to make sure that your monthly payment does not exceed 36% of your income before taxes.
Also, ensure that you understand what your closing costs will be and how much money you should set aside to cover these home purchase costs.
- Do not understand your mortgage choices. There are so many different types of real estate loans to choose from. Each one is unique in its own way. As a home buyer, explore all your options. A good real estate mortgage lender will ask questions that will help them recommend the appropriate financial product that is right for your individual needs.
Did you know that there are 40 year fixed mortgage loans available now? Is an FHA loan the best solution for you? Are you a first time buyer? If so, did you check to see if there are any down payment assistance programs available to you? How long do you anticipate living in your home? Less than 5 years? Maybe a fixed loan that adjusts after 5 or 7 years is the best way to go for you? You have many, many options. Explore them!!! Buying a home is a huge decision!
- You are not being represented by a real estate agent. Or, you are being represented by the seller’s agent, also known as the listing agent. Now… unless you know this real estate agent very, very well and you have the utmost confidence in him or her being able to objectively look at both sides of the transaction and gear you in the right direction having your best interest in mind, hire your own real estate agent.
The great thing about being a home buyer is that you do not have to pay a real estate agent commission in most cases. The home seller pays the commission to their real estate brokerage and that real estate broker will share the commission with the buyer’s real estate agent. Simple, isn’t it? Get your own buyer broker representation! Find a real estate “pit bull” that will ensure your interests are protected!
- You saw the house, wrote the offer and never went back to check on the neighborhood. Ouch… escrow is underway and you find out that the neighbor next door has a band that practices in their garage every Sunday morning. Or, you drive in for a home inspection to see that there’s no parking on the street because there’s some sort of on-going activity taking place a block away from your newly found home. You see what I mean, right? If you are not 100% familiar with the neighborhood, take the time to drive by the house and around the neighborhood at different times of day and evening. Check your commute time to work from the house. See what it’s like being in that neighborhood or on that street on weekends.
- You did not get the home inspected by a professional inspector. Every home should be inspected by a California CREIA (California Real Estate Inspection Association) approved home inspector. Living in California, termite inspections are a must. And, when buying a home in Pasadena, San Marino or any of the surrounding cities, consider hiring a sewer line inspector.
- You bought the most expensive house on the block. Shall I say more? If you have a lot of money and it doesn’t really matter – go for it. But, if you’re like the rest of us, please do not buy the most expensive home on the block. THINK RESALE VALUE!!!
Take the time to look at comparable homes prior to writing the initial offer.
Ensure that the home will appraise.
Have a discussion with your real estate agent to see how much this home will be worth 3, 5 or 7 years from now. When I represent home buyers, I always ask myself – if I had to sell this home today what would its pros and cons be.
- Review all offer terms carefully. Crafting an effective offer is a skill. Strategize on the best way to write an offer with your real estate agent. Are you asking the seller for concessions? Is your offer clean? Is it contingent upon you selling your home? Present yourself, home buyer, in the best light by being approved by a lender, providing proof of funds, writing an introduction letter to the home seller and having a great and experienced real estate agent effectively packaging all this for you.
Read More: 5 Tips to get more home for your money!
And, just for fun, here’s one of my favorite posts – What can you expect from a great real estate agent! Watch the video – it’s hillarious!!!
Buying a home in Pasadena or any other city can be stressful and can have many pitfalls. Ensure that you are guided by a real estate professional that you trust and respect and who has YOUR best interest at heart.