Budget

It is important to know how much you can afford to pay each month before starting on your search for a new home.  Many homes in San Diego County can cost in the hundreds of thousands of dollars and you need to have a keen sense of how much you can afford to pay. You don’t want to put yourself in a position of having no extra money at the end of each month.

When setting your budget, you need to consider not only the monthly house payments but also all of the costs associated with owning a home. If you have been renting or even living with your parents, you probably have no idea how much home repairs can cost. It is a good idea to budget $200-250 a month to an emergency repair fund so when something does come up, you will have the funds to fix it. Even a minor repair such as replacing a window can run you upwards of $300 so it is important to be prepared.

Other things you need to consider when creating your budget are the property taxes and property insurance. Many lending companies allow these expenses to be escrowed and added to your monthly house payment. Before making an offer on any home, you need to find out the yearly property taxes as well as get an estimate for proper insurance coverage.

No more than 30% of your monthly income should go toward your house payment; that means if your monthly income is $4,000, you don’t want to commit to more than a $1,200 house payment, including the taxes and insurance if possible. 30% may not sound like a lot but when you add in all of your other expenses for the month you will be surprised at how little you may have left.

Preapproval

It is always a good idea to obtain financing prior to beginning your home search. A qualified preapproval expert will help you determine your budget as well as which price range you should be looking for your new home in. When trying to obtain a preapproval, make sure you have an adequate amount for a down payment. While it is possible to obtain preapproval without any money down, you are more likely to get a better interest rate with a down payment.

When trying to obtain preapproval, don’t apply to too many lenders. Numerous credit lookups can have a negative effect on your credit and may result in a higher interest rate for your loan. Always speak with your personal bank first. You have already built a relationship with them and they will be more inclined to give you a better interest rate.

Find a Realtor

Once you have developed your budget and obtained preapproval, it is time to start seeing what properties are available in your price range. Find a realtor you trust to do all of the leg work for you. There are hundreds of reputable realtors available in San Diego County to help you in your quest for a house to call home.

Take a list of your requirements for your new home when you meet with your realtor for the first time. This list should include your desired location, number of bedrooms, baths, lot size, property type, etc. The more details you can provide your realtor, the more likely you are to be looking at homes which meet your needs.

Search Listings

Even though you have retained a realtor, you should still check property listings. It doesn’t matter if the home is listed with a different realtor; let your realtor know of the home you have found and he will make arrangements for you to view it. You can also look for open houses in the area you want to move to. Many times, individuals will sell their homes without the assistance of a realtor and this could save you some money.

When searching listings, it is okay to look at houses a little above your budget. Often times, you can get the seller to agree to a lower price which falls in your budget.

Short Sales

With the rising number of homes going into foreclosure, many banks are agreeing to short sales, or a sale in which the bank doesn’t get the full amount owed on the property but is willing to take the loss to avoid the costly foreclosure process. Many short sales will be listed by the bank or owner but some may still be listed with a realtor.

A short sale is a great way to get a good deal on a property but you need to be careful. Be sure to have the home inspected for any hidden damages which could cost you a fortune in the long run. You can always ask for a home warranty but with most short sales, you are unlikely to get one.

If you decide to make an offer on a short sale, make it a fair offer. While the bank is agreeing to take a loss on the property, they are not looking to give it away. You will get a faster response from the bank when you offer close to the asking price. Offers which come in way below the asking price may get pushed to the back burner for months.