This is our FREE Home Buyers Guide from Greenleaf Real Estate. If you plan on moving or relocating to the Temecula area, this is for you.
As a home buyer, it is important that you are prepared and understand the process before making offers. Here are a few things you should think about and discuss before making offers on homes.
- Don’t buy a home at the price you are approved for, buy a home that has a monthly payment you are comfortable paying.
- Verify 5 of the most important “MUST HAVES” in the home and focus on those
- Research the area you like and understand Taxes/HOA/ Mello Roos. (Taxes can skyrocket your payment)
- The average homeowner stays in a home for 7 years, this should definitely impact the home you purchase. (We can go over this)
- If you want a pool realize that pool homes have become very very sought after by many buyers
- Drive times are always important in California, take those into consideration
- Understand that buying a home will be both exciting and stressful. Find an agent that understands the process, has great negotiating skills, and can keep calm throughout the process.
Things To Do ASAP
As soon as you decide to move forward with purchasing a home in the Temecula area, these are things that you need to focus on.
Credit Reports & Scores
This is truly one of the most important initial stages of the home-buying process. The higher your credit score the lower your interest rate. Verify that there are no errors on your credit report, remove debt, and verify that there are no negative hits on your credit. You can verify this through the three major credit companies (Equifax,Experian and TransUnion)
- Contact a trusted real estate professional and have them give me 2-3 referrals for mortgage lenders. Call these lenders up, see how responsive they are. Do they answer their phones? Do you have a good gut feeling about them after speaking? Do they seem knowledgeable? Do they help you what are the issues that might come up on your credit report?
Now that you’ve established what lender you will work with they are going to do a hard pull on your credit report. This will show the lender your creditworthiness. It will also help determine the rates and terms of the loan.
2. The most common issues are debt, low credit score, and money for the down payment. The beauty of talking to a lender early is that you’ll have time to tackle all of these. There’s nothing worse than wanting to buy a home and finding out your 6 months away.
Take action and Research!
There are many different loan types when purchasing a home, make sure the lender explains every one of your options and the difference between mortgages. One example is PMI or private mortgage insurance. some loans have it some don’t. Many times it depends on how much you’re putting down but verify this with the lender. If you can get rid of this it will keep your monthly payment lower.
One of the biggest mistakes I see buyers making is buying a home at the qualified purchase price and not your monthly payment. Just because you’re approved for a $500,000 mortgage doesn’t mean you have to buy a $500,000 home. Buy a home on what the monthly payment will be, not your approved purchase price. Don’t become house poor. What if you love to travel? What if you want to make repairs to the house? What if you don’t want to be stressed every month and be home poor?
Research and find a real estate agent that is going to serve your best interests and also has a vast knowledge of the local Temecula or Murrieta market. Make sure they are familiar with the area, and the type of loan you have and they answer their phone! Most of all, go with your gut. When you find an agent that truly cares about your wants and needs, make sure to treat them with respect. I’ve seen too many times over the years buyers treating really good agents like crap and do not respect their time, experience, and knowledge. Show up to appointments on time, be honest, and if you do have an issue, tell them, usually, they will jump through hoops to fix it.
People in a Real Estate Transaction
- Realtors- should be licensed by the state of California. Ask them for their business card and verify they have a license that’s up to date and no current violations or lawsuits against them have previously been filled or are pending. You can look online for this information at the California Department of Real Estate
- Agents-There is a real estate agent for both the buyer and the seller most of the time. Sometimes, if a buyer is not working with an agent and calls on a sign, the listing agent can represent both parties. In my opinion? It’s hard to represent both parties and have everybody’s best interests at heart. Yes, I have done it and still do it but it’s not my favorite thing.
- Title Officer- In California title is usually chosen by the seller. a preliminary title report will be pulled for you the buyer and the title company will research the property throughout the transaction to make sure you were the buyer purchases a property free and clear of any encumbrances. In Southern California, the seller usually pays for this.
- Escrow Officer- Escrow is also usually chosen by the seller and the escrow officer is a third party who acts as an impartial stakeholder in the real estate transaction. They collect earnest money deposits, write up disclosures, order reports, make sure net sheets and closing statements are correct, and coordinate loan doc signings. Personally, I feel that a good escrow officer is one of the most important parts of a transaction. They keep the transaction flowing and help keep contract deadlines intact.
- Appraiser- In regards to Deals going sour, the appraisal it’s probably the scariest part of the transaction. I’m not going to get into too much depth on this because we have tons of information on our website. My wife has been a Certified Appraiser for 20 years, so I really have an in-depth understanding on the appraisal process for a buyer in an escrow.
- Mortgage Lender- As the escrow moves along they will be asking for documents and clarification on certain things. Personally, I like lenders that do most of the work upfront in regards to gathering documentation. it’s comforting to know that you have an ironclad approval letter and they can close quickly. Lenders should take no longer than 35 days.
Buying Process and Timeline
- get pre-approval letter
- Tour properties
- find a home you love and write an offer
- present the offer in a timely manner
- negotiate back and forth this is where a good buyer’s agent can really be helpful
- open escrow- contracts will be sent to Escrow and within the first one or two days, you will need to wire your earnest money deposit.
- Inspections and contingency periods- Both you and the seller have obligations and timelines you need to adhere to. As the buyer, you have every right to perform whatever inspections on the property you would like. Common inspections include termite, Septic Service, roof certs, home inspection. Common inspections include the home inspection and Termite. Contingency periods can differ per what is written in the contract but generally speaking you’re going to have around 10 days to get inspections and Appraisal done and 20 days to get your loan approved.
- Signing Loan Docs- After all, inspections are done you will sign loan documents. This usually is around the 17th to the 24th day of escrow. Oftentimes Astro can set up a mobile notary so you can sign at work or at home.
- Closing Funds- You will need to wire whatever funds are needed to close on a property.
- Close of escrow- the deed will be recorded at the County Recorder’s Office and your real estate agent will coordinate with you to get the keys.
Taxes, HOA Special Assessments and Mello Roos
Another big mistake that I see buyers making is not realizing how much in tax or the HOA is going to be. Generally speaking, the newer the home the higher the taxes and more chance of an HOA. Oftentimes, newer homes will have almost double the yearly taxes. Often, buyers don’t mind this because they want a newer community and a new home. You just need to be aware of this and it will also affect your buying power. The higher the taxes the lower your purchase price will be, the lender does include them in your monthly payment.
A few DON”T DO’S
- Don’t hide things like child support payments or alimony, be 1000% honest with the lender, they will find out
- Don’t make any big purchases during the home-buying process. wait till you close on the loan before you go buying a new car or furniture for the house.
- Don’t quit your job while buying a house
- Don’t spend money you might need for closing costs, save everything you can.
Okay, so you have talked to a lender, you feel comfortable with your loan and you’ve been approved to purchase a property. You’ve done all your research and feel you have the best rate possible for your situation. You also feel 100% confident that your loan is going to close without any problems.
Offer Accepted! Now What?
- Your offer is signed by both parties and sent to your lender, Escrow and transaction coordinator (ask about our Free Transaction Coordinator)
- You will need to set up a time to wire, drop off, or mail your earnest money deposit. (On Page 1 of the RPA or purchase contract)
- Our transaction coordinator will set up reminders for important due dates (per contract) for the escrow
- We get on the phone with the lender and verify they have everything they need to start the loan.
- Home Inspection- You have the option of calling your own home inspector or using Greenleaf Real Estates. This cost is up-front, not paid through escrow. Usually $350-$700 depending on the size of the house
- Appraisal-Appraisal is ordered by your lender and this is also paid upfront. (Ballpark $500-$1000 ) Depends on the house.
- If the contract requires we verify that the Termite Inspection has been scheduled and/or repairs have been completed. (We want a clear Termite Report ASAP or at least negotiate it)) The termite report has 2 sections. The first section is evidence of either termites or dry rot that need to be repaired. Section 2, which only has to be cleared for VA loans is anything the termite company sees as a future problem. Very rarely does a home need to be tented. I have only had 2-3 occasions in 12 years that this has happened. Remember, if it is in the contract to be cleared, the lender will want to see clearance
- . Review Inspection, Termite and Appraisal Reports.
- Draft a request for repairs disclosure for the seller. The request for repairs will include both Home Inspection and Appraisal report required and recommended repairs. (When an appraiser calls out a repair it usually has to be completed before the loan closes.)
- Once repairs are requested and signed off on by the seller we will oversee that the work is completed properly.
Licensed professionals will be required on electrical, structural, roof, and plumbing issues etc. We will use our judgment. We will not require licensed professionals for small items like door handle replacement or a drywall hole.
The Loan Process
Getting pre-approved is just one step of the loan process. I thought I would go through a few steps throughout an escrow and a few things you will need to accomplish with your lender.
- The Loan Application- As mentioned earlier this is the first step in the process. It’s better to have a lender that asks for more Information upfront which really gives you a solid approval letter and peace of mind. I have lenders that will actually go through underwriting on a property before offers are even accepted so loan docs can be done and ready to go within 15 days. Ask for proof of employment, credit reports, and sufficient funds to close.
- Once escrow is open the lender will order an appraisal within the first three days and request the preliminary title report
- The first few weeks are waiting for the supporting documentation. Usually, the appraisal is what the lender has to wait for it. The turnaround time for this is anywhere from 7 to 14 days.
- Once all documentation is collected the loan will be submitted to underwriting. This process should take no longer than 48 hours but it depends on how busy the underwriters are and could take up to three 3-4 days.
- Once the underwriter is satisfied, they will grant a loan approval. This is a huge step and allows us to go to the final process which is signing loan documents
- Once loan documents are ordered the turnaround time is anywhere from 24 to 48 hours. You will have to meet with a notary either at work, home or at escrow to sign. Signing will take a couple of hours, so just a heads up
- Once loan docs are signed and back with the lender the loan will be funded and recorded. This process usually takes two to three days but often gets done within 24 hours. Certain Counties have special recordings so we can fund and record on the same day.
What is Escrow
Escrow is a third party that is impartial to the transaction. Both the buyer and seller will give the escrow holder written instructions and conditions that escrow will follow. Escrow allows the parties in the real estate transaction to deal with each other, and have less risk. The reason? The Escrow Company is not taking sides, they are there for clerical duties, settlements of accounts, a clearinghouse for payment of all demands, and are custodian for funds and documents
This can be complicated and I urge everybody purchasing a home to talk with the title officer or rep. I will go over common ways of holding title still a very important part of purchasing a home and can affect you drastically in the future if not done properly.
This is basically taking title as an individual, common types are as follows.
- Single man or woman– This is a manner when I’m not legally married are registered as a domestic partner
- A married man or woman as his or her sole and separate property-If you want to take title, the spouse we’ll need to quit claim or relinquish his or her right to the property. Both parties have to agree
- Registered Domestic Partner – similar to the above example one party will have to or agree in writing to this
Title of Property Owned By two Or More People Can Be Vested As Follows:
- Community Property– Owned together as husband or wife or domestic partners
- Community Property With Right of Survivorship– This is a form of that thing title to property owned by two or more persons who may or may not be married or domestic partners. Holding title in this manner, consult a CPA. On the death of an owner, The Descendants interest ends and the Survivor owns the property
- Joint Tenancy- It can be held by two or more people and they do not have to be married or domestic partners. Title must have been acquired at the same time. When a joint tenant dies, title to the property is automatically conveyed by operation of law to the surviving joint tenants. Therefore, joint tenancy property is not subject to disposition by Will.
- Tenancy in Common- Title to a property owned by two or more individuals and have undivided fractional interests. These interests may be unequal in quantity or duration and may arise a different times. Each tenant-in-common owns a share of the property and is entitled to a comparable portion of the income expensive. Each co-tenant may sell/lease their share or will their share to heirs.
- Corporation and LLC- You can also take title as a corporation or LLC. If this is what you plan to do please contact your CPA.
In Southern California is it is customary for the seller to pay for title insurance. Title insurance is protecting both the buyer and lender in the event of certain problems that come up regarding rights and property ownership. Often, there are title defects, even with diligent title searches. Title insurance pays the cost of Defense against the covered claim.
- What are the names on title to the names on the contract
- Verify via plat map but the address is a match
- Verify easements
- Escrow and title should be great problem solvers when it comes to title issues. If something comes up they need to be immediately contacted so they any issues that have come off.
The Home Stretch
The most hectic time in an escrow is the first week and last week. The first week is filled with inspections and paperwork. The last week because people procrastinate and rush around in the final week. (We don’t roll like that)
We make sure all paperwork is signed properly by both buyer and seller We verify the lender is on track to close on time and make sure they have everything needed.
We Set up a final walkthrough to inspect the house and make sure repairs are completed and nothing has changed since the original offer.
Make sure you have a moving company set up and utilities changed over
Review your final closing statement and verify figures for accuracy before closing.
Check to make sure the home warranty is in place if requested
Meet at the house with the keys and have a drink 😂
Frequently Asked Questions
Who pays the buyer’s agent?
Typically the seller pays both the buyers agent and the listing agent
What is a dual agent?
A dual agent is when one agent represents both the seller and the buyer. There are many different thoughts on this situation and it’s really a case-by-case basis. in general, my feeling is that it’s hard to represent both parties equally. if I was buying a home I would want my agent to be looking out for my interests and my interest only.
Zillow vs MLS
Depending on the market, time is often of the essence and very important for a buyer. In our opinion, the MLS has the most up-to-date information available. You will receive a daily/weekly home search, depending on preference, I suggest daily. You can look at Zillow/Trulia/Realtor.com but often times the information is misleading. Zestimates are often way off and many times homes are active on these platforms but pending on the MLS. That being said, we have no problem with you looking for homes on any platform. We just verify it through the MLS
Can I work with more than one agent?
Nothing is more frustrating to an agent than a buyer who is working with multiple real estate agents. Without a commitment from you, it’s not likely that an agent will do their best work for you. The exception to this situation is a buyer who is looking in a large geographic area. If you are looking for property outside the market area your agent specializes in, ask them for a referral to an agent in another area(s). That way, both agents are in communication during the home search, allowing them to partner in finding you the right property.
What if I am unhappy with my agent?
Our policy on both listings and purchases is that if the client isn’t happy we have no problem canceling any contract. This is not the case with every brokerage.
The Current Market Situation
Things you can expect when submitting offers and having a successful relocation to Temecula or Murrieta
- Depending on the home, you can expect to pay 20k-50k above asking
- I will never suggest releasing appraisal contingency but many buyers are doing it
- Oftentimes sellers want a rent back- per lender guidelines it cant be more than 60 days
- If you are contingent on selling it will make your offer less desirable- there are banks that will lend without you having to sell, you just pay the loan back after you close. Banks will usually give you 6 months
- Don’t expect home repairs or termite repairs, I always ask but oftentimes they will counter these things out, especially termite repairs
- Contingency periods shortened on counter 10-day inspection 14-day appraisal and loan
- If you can buy a home with paid off solar I would make a stronger offer, especially if it has a pool
- Sellers ultimately call the shots in the current market. I will do my best to get everything you want but if I get the sense we are pushing too hard I will tell you
Moving to Temecula or Murrieta
- My suggestion is to bring only the things you love or things that cannot be replaced. Facebook marketplace and garage sales are very big here.
- Renting a Uhaul and contracting out movers will save you money
- Plan your trip to drive through LA either at night or from 10am-1pm
Things to think about before making the move to Temecula or Murrieta
- If you are commuting more than 3-4 days a week in rush hour times, be aware that traffic is no joke
- It gets hot from July through September some days will hit 110 degrees but that’s only for about 4-5 hours. Nights are amazing
- Politically this area would be center right
- There are areas that will have higher insurance costs because they are considered high fire areas
- 70% of Temecula and Murrieta do have HOA’s. If you have an RV be aware of that
- Temecula is an amazing location for weekend getaways Big Bear, Palm Springs, San Diego, beaches and airports are all very close
- Golf courses are plentiful and reasonable in way of green fees
- If you are commuting more than 3-4 days a week in rush hour times, be aware that traffic is no joke
- Temecula and Murrieta are set up to have everything close. You will not have to drive more than 5-7 minutes to get to daily needs like groceries, schools, restaurants, parks, Walmart type stores
- Amazon and grocery delivery are a great way to save time
- The homeless problem isn’t very big here. We do have car break-ins if left on the street sometimes but not very much in way of violent crimes
- Pride in ownership and friendly helpful neighbors is generally very good
Please email or call me as this is very important information for me. It will help me narrow down the searches and get the perfect home for you
What are you looking for in a home? What are the 4-5 things that are non-negotiable. This will help me narrow searches in way home-specific homes and areas of Temecula and the surrounding area.
Buying Process Overview
1. Getting Pre-Approved for a Home Loan
2. Determining your wants and needs
3. Begin the search
4. Previewing Properties
5 Find a home you love
6. Determine Your Offer Price
7. Write the offer
8. Negotiating With The Sellers
11. Signing the paperwork