Buying a house in California can be both an exciting and confusing process, especially for first-time home buyers. Our guide breaks down the process in eight steps, with insights and practical tips to help you navigate the Golden State's competitive market.

👋 If you're weighing your options to buy a house, Clever's fully licensed Concierge Team is standing by to answer questions and provide free, objective advice on how to get the best outcome. Get free advice from a licensed expert today — no obligations!

Step 1: Save for a down payment

Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender pays the remaining balance.

A down payment can be up to 20% of the home's final purchase price. In California, that could mean paying up to $149,211 for a $746,055 home.

If you put less money down, your lender will typically require you to get private mortgage insurance (PMI) on the loan. That can save you money up front but increase your monthly payment and total interest costs over the life of the loan.

However, if you can't afford to put that much down at closing, or want to hold onto more of your cash to cover other home-buying expenses, some government-backed loans have lower down payment mortgage options.

First-Time Home Buyer Guide for California

Looking for first-time-home buyer programs in California? We've got you covered in this handy guide to buying your first home in California.

Step 2: Find a great real estate agent in California

Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great California realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.

In addition to finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers (like title companies and inspectors) to help you buy your home in California — just remember you can always shop around!

Best of all, hiring a good real estate agent comes at no extra cost to you — sellers typically pay all realtor fees from the home sale — and can get you the best price on a home.

When finding and choosing a California realtor, consider their local knowledge and proximity to the specific neighborhoods you're interested in.

For example, an agent could have intimate knowledge of Alameda but not Oakland. If you don't know where you're moving to yet, you can reach out to agents who specialize in the broader Bay Area.

You can start your search by looking up a brokerage or realty, but don't stop there. Take the time to research and interview multiple real estate agents, paying attention to their:

• Years of experience (the median is 8 years)
• Number of home buyers helped in the last year — the more the better!
• Expertise in your target neighborhood and price range
• Online reviews and complaints
• Licensing and certifications, such as an Accredited Buyer's Representative
• Membership in local real estate boards, such as the San Francisco Association of Realtors or the Orange County Association of Realtors

Step 3: Get preapproved for a mortgage

Mortgage preapproval is a lender's conditional offer to lend you a maximum amount of money to buy a home.

Most sellers in California will ask for a mortgage preapproval letter before showing you their home. It demonstrates that you're financially qualified to make an offer and can give you an advantage over buyers who don't have one.

Pre-approval can be as simple as a 40-minute phone call with your lender, a credit check, and sending them your proof of funds. Once you make an offer on a house, you'll start the initial mortgage application.

What do lenders review?

Mortgage lenders will check your credit score, payment history, income, employment, and debts to determine approval and how much they are willing to lend to you. (Note: These are the same factors that determine the loan's interest rate.)

You're evaluating lenders, too

Consider each lender's quoted mortgage rate, estimated closing costs and fees, reputation and online reviews, customer service quality, and responsiveness to your questions.

Although you don't have to decide on a lender now, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best rate and terms when you buy your California home.

A local lender:

• Might provide you with more market-specific information, such as typical home values in your desired area
• Likely has a better understanding of lending regulations in the state
• Can connect with you other real estate professionals (realtors, contractors, inspectors, etc.)

You don't necessarily need to use a California-based lender when buying a home in the state. Many national and online lenders are licensed to provide mortgage loans in California and may provide better rates and terms.

Step 4: Choose the right location

Start zooming in on the best neighborhoods where home prices fall within your budget, and consider what you want out of your home.

If home equity is most important to you, search where home values are rising the most. But don't forget about local culture and amenities that fit your lifestyle.

California home prices

Currently, the typical home value in California is $746,055, but prices vary dramatically from city to city and even from neighborhood to neighborhood!

Top 5 Best Real Estate Investment Markets in California

California has a number of potentially lucrative real estate investment markets. Here are the five best real estate markets in California.

Lifestyle

Talking to a local realtor can be huge when buying a home, especially in California's competitive market. They'll provide a unique perspective, with in-depth knowledge of neighborhoods and their potential for appreciation over time.

A good local agent can also provide tailored housing recommendations based on your lifestyle, such as information on the best schools, local amenities, and traffic patterns.

Step 5: Start house hunting in California

Searching for homes in California is the fun part of the home buying process! You'll get to look at a variety of available listings and discover what you really want in a home.

Make a list of everything you want in a home and prioritize them by must-haves (such as proximity to work or your children's school) versus your nice-to-haves (like a spacious garage or backyard).

Consider the full costs of owning a home, not just the mortgage payment. Other potential costs of owning the home include maintenance and repairs, property taxes, homeowner's insurance, and HOA fees.

Your realtor can help you understand which of your needs and wants fit your budget and favorite neighborhoods and adjust where possible.

You should also decide whether you'll only visit homes in person or if you trust your agent to visit the properties on your behalf. This can be useful if you work demanding hours and can't always be available to see a house.

Next, your agent will search for homes on your local MLS and bring you top picks, and you'll schedule viewings and tours.

Step 6: Make an offer

Once you find a California house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Talk to your real estate agent to work out all your contingencies and concessions so you can act quickly and make a strong offer that gives you a good chance of winning the home.

Part of your offer could include an earnest money deposit, which may be 1–2% of the purchase price. It's an incentive for the sellers to take the home off the market until closing. If the sale goes through, the earnest money goes toward your down payment, so you won't be anything additional out of pocket.

» LEARN: More about what an offer should include

Note: When housing inventory is high, so is demand. So if you're house-hunting in May, you may have less time to make an offer than in December.

Step 7: Inspections, appraisals, and financing

Once the seller accepts your initial offer, you have to do due diligence before officially purchasing the home. Inspections let you better evaluate the home's condition, and lenders use appraisals to determine value and decide how much your final loan amount will be.

If something unexpected pops up or if the home's appraised comes in below the purchase price, you could have an opportunity to renegotiate the terms of your contract.

Underwriting

This is also the period that your lender will verify that you can afford your mortgage. They may ask for proof of income, pay stubs, and letters of explanation for income that doesn't come from wages, and other loan statements (like for student debt).

Delays could lead to postponed closing, so start collecting this information early so that you can be ready to submit documents when your lender asks.

Home inspections in California

Having your California home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it. A licensed professional checks the house for any unseen, unexpected, or potential issues. 

Your inspector should check out the following parts of the property:

• Roof
• Foundation
• Electrical system
• HVAC system
• Plumbing

A home inspection costs around $300 to $600, depending on factors like the home's location, condition, and age.

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

California-specific inspections

California has strict disclosure laws, but it’s still recommended for home buyers to have additional tests done before closing. Here are a couple good inspections to consider:

• Radon testing: Certain parts of California, including Santa Barbara and Ventura County, can have elevated radon levels. California residents can order a radon testing kit to make sure the chemical isn't present in a potential home.
• Termite inspection: Certain loans require pest inspections, but it's a good idea for all buyers to complete this process. Termites and other pests can affect the safety of a home, pose possible health hazards, and lead to bigger extermination fees later. Getting a pest inspection before closing will ensure that your future home will be safe and termite-free.

Appraisals

Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

Step 8: Close on your new home!

Final walk-through

Before you close on your new home, you and your agent will do a final walk-through of the property to ensure that it's still in the expected condition. You'll want to check to make sure: 

1. The appliances are in working order.
2. Any agreed-upon repairs were handled by the seller. 
3. There was no damage to the home when the seller moved out.

Closing day 

On the closing date, you’ll meet at the title company to review lots of important paperwork. You'll need to read and sign several documents, including:

• The final loan application
• The deed transfer
• Various disclosures

Before signing anything, ask your agent or closing attorney about any questions you have to make sure you fully understand each document.

After completing the paperwork, you'll have to pay for closing costs. The title company will collect the total amount you owe for various services and pay each party on your behalf.

Typically, a buyer's closing costs can be separated into four categories:

• Prepaid costs: Ongoing costs of homeownership, such as property taxes and homeowners insurance. Mortgage lenders often require buyers to pay these monthly fees up front.
• Title and escrow charges: Charges for the title company's services, such as title searches and title insurance.
• Lender fees: Fees for the mortgage company to originate and underwrite your loan. Lender fees might include other expenses associated with your loan, such as appraisal fees or mortgage points.
• Other closing costs: Miscellaneous costs unique to each buyer. Other closing costs can include pest inspection fees, natural disaster certification fees, and other variable expenses.

Buyers in California typically pay 3% to 5% of the purchase price in closing costs. For a $746,055 home — the typical home value in California — that's between $22,383 and $37,305.

After signing all of the paperwork, you'll get the keys and can move into your new home. Congrats! 

Start of mortgage payments

If you took out a mortgage to purchase the home, your first loan payment is likely due within a month after closing.

Ask your lender for more specific details about the payment schedule, how to make the first payment, and how to set-up automatic payments (if desired).

Related links

How to Find a Real Estate Agent That's Right for You

This guide on how to find the best real estate agent is packed with useful tips and information, based on hundreds of hours of research and expert interviews.

Home Buyer Rebates: Get Cash Back When You Buy!

You can get cash back when you buy a home if you receive a home buyer rebate. We'll show you where they're available and how to get one on your next purchase!

The 20 Best House Buying Websites in 2023

We've compiled a list of the best house buying websites so you can quickly find ALL the properties for sale in your area. Jumpstart your home hunting journey today!

Redfin vs Zillow vs Trulia: Honestly, Which Is Best?

Comparing Redfin vs Zillow vs Trulia? We'll explain who has the most accurate home value estimates, the best real estate agents, and more.

Real Estate Closing Costs: Find ALL the Fees You'll Pay

Wondering who pays what when it comes to closing costs? Whether you are selling your home or buying a new one, we break down exactly what closing costs to expect.

The post Buying a House in California in 8 Easy Steps appeared first on Semya-Moya.

There are lots of houses currently for sale in Colorado, but they are selling quickly. Here’s what you need to do to buy a house in the Centennial State’s competitive market.

This guide breaks down the home buying process into eight steps, with insights and practical tips.

👋 If you're weighing your options to buy a house, Clever's fully licensed Concierge Team is standing by to answer questions and provide free, objective advice on how to get the best outcome. Get free advice from a licensed expert today — no obligations!

Step 1: Save for a down payment

Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender pays the remaining balance.

A down payment can be up to 20% of the home's final purchase price. In Colorado, that could mean paying up to $105,657 for a $528,285 home (the median sale price of homes).

How much you save for a down payment on a house in Colorado depends on how much you're willing to pay up front versus over time.

If you put less money down, your lender will typically require you to get private mortgage insurance (PMI) on the loan. That can save you money up front but increase your monthly payment and total interest costs over the life of the loan.

However, if you can't afford to put that much down at closing, or want to hold onto more of your cash to cover other home-buying expenses, some government-backed loans have lower down payment mortgage options.

Minimum down payment on a house in Colorado

Step 2: Find a great Colorado real estate agent

Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great Colorado realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.

In addition to finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers (like title companies and inspectors) to help you buy your home in Colorado — just remember you can always shop around!

Best of all, hiring a good real estate agent comes at no extra cost to you — sellers typically pay all realtor fees from the home sale — and can get you the best price on a home.

We recommend picking a realtor based on how well they know the neighborhoods you're interested in.

For example, an agent could have intimate knowledge of Aurora but not Lakewood. If you don't know where you're moving to yet, you can reach out to agents who specialize in the broader Denver Area.

You can start your search by looking up a brokerage or realty, but don't stop there. Take the time to research and interview multiple real estate agents, paying attention to their:

• Years of experience (the median is 8 years)
• Number of home buyers helped in the last year — the more the better!
• Expertise in your target neighborhood and price range
• Online reviews and complaints
• Licensing and certifications, such as an Accredited Buyer's Representative
• Membership in local real estate boards, such as the Colorado Association of Realtors or the Denver Metro Association of Realtors

Step 3: Get preapproved for a mortgage

Mortgage preapproval is a lender's conditional offer to lend you a maximum amount of money to buy a home.

Most sellers in Colorado will ask for a mortgage preapproval letter before showing you their home. It demonstrates that you're financially qualified to make an offer and can give you an advantage over buyers who don't have one.

Pre-approval can be as simple as a 40-minute phone call with your lender, a credit check, and sending them your proof of funds. Once you make an offer on a house, you'll start the initial mortgage application.

What do lenders review?

Mortgage lenders will check your credit score, payment history, income, employment, and debts to determine approval and how much they are willing to lend to you. (Note: These are the same factors that determine the loan's interest rate.)

You're evaluating lenders, too

Consider each lender's quoted mortgage rate, estimated closing costs and fees, reputation and online reviews, customer service quality, and responsiveness to your questions.

Although you don't have to decide on a lender now, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best rate and terms when you buy your Colorado home.

A local lender:

• Might provide you with more market-specific information, such as typical home values in your desired area
• Likely has a better understanding of lending regulations in the state
• Can connect with you other real estate professionals (realtors, contractors, inspectors, etc.)

You don't necessarily need to use a Colorado-based lender when buying a home in the state. Many national and online lenders are licensed to provide mortgage loans in Colorado and may provide better rates and terms.

Step 4: Choose the right location

Start zooming in on the best neighborhoods where home prices fall within your budget, and consider what you want out of your home.

If home equity is most important to you, search where home values are rising the most. But don't forget about local culture and amenities that fit your lifestyle.

Colorado home prices

Currently, the typical home value in Colorado is $528,285, but prices vary dramatically from city to city and even from neighborhood to neighborhood!

Top 5 Best Real Estate Investment Markets in Colorado

Finding the perfect real estate investment can be easy when you partner with a real estate investment to help you make the right choice.

5 Important Things to Consider When Buying Land in Colorado

Learn more about factors buyers need to consider before deciding to purchase land in Colorado. Rad on to learn more about Colorado land.

Lifestyle

Finding an area where you’ll enjoy living can be fun and challenging, especially if you’re from out of state. An experienced local agent can help you find locations that fit your interests and needs.

An agent can recommend neighborhoods based on things like schools, amenities, or traffic patterns. They’ll also know which neighborhoods are on the rise and worth putting down roots in.

Step 5: Start house hunting in Colorado

Searching for homes in Colorado is the fun part of the home buying process! You'll get to look at a variety of available listings and discover what you really want in a home.

Make a list of everything you want in a home and prioritize them by must-haves (such as proximity to work or your children's school) versus your nice-to-haves (like a spacious garage or backyard). 

Consider the full costs of owning a home, not just the mortgage payment. Other potential costs of owning the home include maintenance and repairs, property taxes, homeowner's insurance, and HOA fees.

Your realtor can help you understand which of your needs and wants fit your budget and favorite neighborhoods and adjust where possible.

You should also decide whether you'll only visit homes in person or if you trust your agent to visit the properties on your behalf. This can be useful if you work demanding hours and can't always be available to see a house.

Next, your agent will search for homes on your local MLS and bring you top picks, and you'll schedule viewings and tours.

Step 6: Make an offer

Once you find a Colorado house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Talk to your real estate agent to work out all your contingencies and concessions so you can act quickly and make a strong offer that gives you a good chance of winning the home.

Part of your offer could include an earnest money deposit, which may be 1–2% of the purchase price. It's an incentive for the sellers to take the home off the market until closing. If the sale goes through, the earnest money goes toward your down payment, so you won't be anything additional out of pocket.

Note: When housing inventory is high, so is demand. So if you're house-hunting in June, you may have less time to make an offer than in December.

Average time homes spend on market in Colorado

Step 7: Inspections, appraisals, and financing

Once the seller accepts your initial offer, you have to do due diligence before officially purchasing the home. Inspections let you better evaluate the home's condition, and lenders use appraisals to determine value and decide how much your final loan amount will be.

If something unexpected pops up or if the home's appraisal comes in below the purchase price, you could have an opportunity to renegotiate the terms of your contract.

Underwriting

This is also the period that your lender will verify that you can afford your mortgage. They may ask for proof of income, pay stubs, and letters of explanation for income that doesn't come from wages, and other loan statements (like for student debt).

Delays could lead to postponed closing, so start collecting this information early so that you can be ready to submit documents when your lender asks.

Home inspections in Colorado

Having your Colorado home inspected by a licensed inspector gives you peace of mind about the property's condition before you commit thousands of dollars to purchase it. A licensed professional checks the house for any unseen, unexpected, or potential issues.

Your inspector should check out the following parts of the property:

• Roof
• Foundation
• Electrical system
• HVAC system
• Plumbing

A home inspection costs around $300 to $600, depending on factors like the home's location, condition, and age.

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

Colorado-specific inspections

Colorado law requires sellers to disclose almost every problematic condition in a house. But it's still a good idea to do additional inspections to check for any other underlying issues. Here are some recommended tests to consider before closing on a house in Colorado:

• Radon testing: If the seller hasn't done a radon test recently, try to get one done as soon as possible. Radon is highly toxic and can easily enter a home undetected. You can order a free radon test kit from the Colorado state government here.
• Mold inspection: Moisture and drainage problems are some of the most common in Colorado homes. Inspecting for mold can ensure that there are no hidden health hazards in the house you’re buying.

Appraisals

Home appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

» LEARN: 3 options for buyers after a low appraisal

Step 8: Close on your new home

Final walk-through

Before you close on your new home, you and your agent will do a final walk-through of the property to ensure that it's still in the expected condition. You'll want to check to make sure: 

1. The appliances are in working order.
2. Any agreed-upon repairs were handled by the seller. 
3. There was no damage to the home when the seller moved out.

Closing day

On the closing date, you’ll meet at the title company to review lots of important paperwork. You'll need to read and sign several documents, including:

• The final loan application
• The deed transfer
• Various disclosures

Before signing anything, ask your agent or closing attorney about any questions you have to make sure you fully understand each document.

After completing the paperwork, you'll have to pay for closing costs. The title company will collect the total amount you owe for various services and pay each party on your behalf.

Typically, a buyer's closing costs can be separated into four categories:

• Prepaid costs: Ongoing costs of homeownership, such as property taxes and homeowners insurance. Mortgage lenders often require buyers to pay these monthly fees up front.
• Title and escrow charges: Charges for the title company's services, such as title searches and title insurance.
• Lender fees: Fees for the mortgage company to originate and underwrite your loan. Lender fees might include other expenses associated with your loan, such as appraisal fees or mortgage points.
• Other closing costs: Miscellaneous costs unique to each buyer. Other closing costs can include pest inspection fees, natural disaster certification fees, and other variable expenses.

Buyers in Colorado typically pay 3%–5% of the purchase price in closing costs. For a $528,285 home — the typical home value in Colorado — that's between $15,849 and 5%!

After signing all of the paperwork, you'll get the keys and can move into your new home. Congrats!

Start of mortgage payments

If you took out a mortgage to purchase the home, your first loan payment is likely due within a month after closing. 

Ask your lender for more specific details about the payment schedule, how to make the first payment, and how to set up automatic payments (if desired).

Related links

How to Find a Real Estate Agent That's Right for You

This guide on how to find the best real estate agent is packed with useful tips and information, based on hundreds of hours of research and expert interviews.

Home Buyer Rebates: Get Cash Back When You Buy!

You can get cash back when you buy a home if you receive a home buyer rebate. We'll show you where they're available and how to get one on your next purchase!

The 20 Best House Buying Websites in 2023

We've compiled a list of the best house buying websites so you can quickly find ALL the properties for sale in your area. Jumpstart your home hunting journey today!

Redfin vs Zillow vs Trulia: Honestly, Which Is Best?

Comparing Redfin vs Zillow vs Trulia? We'll explain who has the most accurate home value estimates, the best real estate agents, and more.

Real Estate Closing Costs: Find ALL the Fees You'll Pay

Wondering who pays what when it comes to closing costs? Whether you are selling your home or buying a new one, we break down exactly what closing costs to expect.

The post Buying a House in Colorado in 8 Easy Steps appeared first on Semya-Moya.

Now that the housing market is finally calming down after the pandemic[1], buyers are facing a new challenge: Soaring mortgage rates.[2]

In Minnesota, the average 30-year fixed mortgage rate is 6.94% — up from 2021's historic lows. This raises the average monthly mortgage payment to $1,715 (assuming a 20% down payment at the median home value).

But buying a home in Minnesota is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.

In this guide, you’ll learn how to buy a house in Minnesota with confidence no matter what the market brings. Learn why you can trust our advice.

Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.

Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.

Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Semya-Moya. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!

Step 1: Save for a down payment

Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.

Typically, mortgage lenders in Minnesota want you to contribute 20% of the purchase price as a down payment. That would be $64,843 for a $324,215 home — the typical home value in Minnesota.

However, you have options to lower your down payment amount.

Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).

But making a down payment of less than 20% comes with some risks.

First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.

Second, you may have to purchase mortgage insurance.

Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.

Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.

VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.

» READ MORE: Everything you need to know about low-income home loans

Minnesota down payment assistance programs

The state of Minnesota offers numerous down payment assistance (DPA) programs for homebuyers who need extra financial assistance. Eligible participants may receive a grant or second mortgage to help cover closing costs or a down payment.

Here are just a few DPA programs in Minnesota that you can apply for:

Minnesota Housing Monthly Payment Loan

Minnesota Housing offers three DPA programs for buyers with a Minnesota Housing first mortgage.

The Monthly Payment Loan offers a second mortgage of up to $17,000 for participants of the Start Up or Step Up program. The loan is to be paid each month over ten years at the same rate as your first mortgage.

Minnesota Housing Deferred Payment Loan

Minnesota Housing's Deferred Payment Loan offers a loan of up to $11,000 to first-time home buyers participating in the Start Up program.

The financial aid is given as a second interest-free mortgage. Payments aren't required until you refinance, resell, or pay off your home.

Minnesota Housing Deferred Payment Loan Plus

Minnesota Housing's Deferred Payment Loan Plus program offers a loan of up to $15,000 to first-time home buyers in the Start Up program.

Financial assistance is provided as a second interest-free mortgage. No payments are required until you resell, refinance, or pay off your first mortgage.

U.S. Department of Housing and Urban Development

A list of additional DPA programs in Minnesota can be found on the state HUD page here.

Step 2: Find a great real estate agent in Minnesota

Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Minnesota.

Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:

• Years of experience
• Number of transactions in the last year (the more the better!)
• Experience in your price range
• Overall review score
• Individual reviews and complaints

Step 3: Get preapproved for a mortgage

A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.

Most sellers in Minnesota will require preapproval before showing you their home.

You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Minnesota home.

Step 4: Choose the right location

Currently, the typical home value in Minnesota is $324,215, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!

Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.

To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Saint Paul:

Home value appreciation in Saint Paul

Step 5: Start house hunting in Minnesota

Searching for homes in Minnesota is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.

Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."

Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.

Look at current housing inventory

The timing of your house hunt in Minnesota can have a big impact on your number of options. For example, in Minnesota, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.

On the other hand, December gives you the fewest choices in Minnesota. Historically, there are 65.3% fewer homes for sale than during Minnesota's peak season.

Housing inventory in Minnesota by season

Step 6: Make an offer

Once you find a Minnesota house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Currently, in Minnesota, homes stay on the market for 59 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.

Historically, Minnesota homes sell fastest in June, where the average property is only on the market for 44 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.

On the other hand, if you buy in January, you have a bit more time to search. Homes typically stay on the market 28 days longer than Minnesota's annual average.

Average time homes spend on market in Minnesota

» LEARN MORE: What should an offer include?

Step 7: Inspections and appraisals

Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.

Home inspections in Minnesota

Having your Minnesota home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.

Your inspector should check out the following parts of the property:

• Roof
• Foundation
• Electrical system
• HVAC system
• Plumbing

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

Minnesota-specific inspections

Minnesota law requires sellers to disclose all known issues with a property to potential buyers. However, it's possible that there are undetected issues that the seller isn't aware of. To avoid expensive repairs later, it's highly recommended to have additional inspections done before closing on a home.

In addition to a general home inspection, here are a few tests you should consider:

• Radon testing: Radon can be dangerous at elevated levels, so homes should get tested for the substance annually. If the seller hasn't conducted a radon test recently, homebuyers are strongly urged to get a test done before closing.
• Pest inspection: Some lenders require buyers to have a pest inspection completed, but all homebuyers should consider doing one. Catching potential infestations before closing will save you from expensive repairs and health hazards in the future.

Appraisals

Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

» LEARN: 3 options for buyers after a low appraisal

Step 8: Close on your new home!

To officially close on your Minnesota home, you'll meet at the title company to process some legal paperwork and settle your closing costs. It's recommended to review the documents before the closing date to make sure you fully understand everything before signing.

Expect to spend about an hour reading and signing the legal documents. There will be several important sections to double-check, including:

• Your final loan application
• The deed
• The mortgage promissory note
• The disclosure statements

Once you complete the paperwork, you’ll have to pay your closing costs. The title company will make this easy by collecting the total amount you owe and then distributing the funds to the right recipients.

Closing costs for buyers can usually be divided into four main categories:

• Lender fees: Fees paid to your mortgage lender for originating and underwriting your loan. Lender fees can also cover other costs related to your loan, such as appraisal and survey fees.
• Title and escrow charges: Charges for the title company's services, including conducting the closing process, performing the title search, and providing title insurance.
• Prepaid costs: Ongoing costs of homeownership. Lenders often require new homeowners to pay for certain expenses up front, such as property taxes and homeowners insurance.
• Other closing costs: Miscellaneous fees that can vary according to each buyer's needs. Some common costs may include natural disaster certification fees or real estate attorney fees.

Buyers in Minnesota typically pay 3–5% of the purchase price in closing costs. For a $324,200 home — the typical home value in Minnesota — that's between $9,726 and $16,210!

Frequently asked questions

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The post How to Buy a House in Minnesota [8-Step Guide for 2023] appeared first on Semya-Moya.

California has an average home value of $765,495 — more than double the U.S. national average. And this market shows no signs of slowing down — prices have appreciated by 7.1% over the past year.

Los Angeles in particular is quite expensive. But you might be able to score a deal by buying foreclosed homes in Los Angeles. According to recent data, California initiated more foreclosures (2,594) than any state in the U.S.

However, the Los Angeles foreclosure market can be notoriously difficult to navigate — especially on your own. Whether you’re an ambitious investor buying in cash or a young family looking for a starter home, your best chance of getting a bargain is to connect with a local real estate agent who has experience with foreclosures.

Agents that focus on foreclosures know exactly where to look for good deals — and they may even have ties with local lenders. If you need help finding an agent that focuses on foreclosures, Semya-Moya is an agent-matching service that can connect you with the top foreclosure experts in your area — no strings attached.

Finding foreclosures is hard enough — let us help simplify the agent-finding process. Get free local agent matches now!

What is a foreclosed home?

When a homeowner falls behind on their mortgage payments or doesn't pay taxes, the lender or government can seize the home — a process called foreclosure.

Once the lender or government has taken possession of their home, the next step is to sell it. You can buy these foreclosed properties at auction or, if the property doesn’t sell at auction, directly from the bank in a real-estate-owned (REO) sale.

How to buy foreclosures in Los Angeles

1. Get preapproved for financing

The first step in buying a foreclosed home is to get preapproved for a mortgage.

After reviewing your finances and deciding you qualify, the bank will issue a preapproval letter. This letter tells sellers that you're serious about buying.

If you’re curious how much you can get preapproved for, our friends at Rocket Mortgage can send you an estimate right away. Answer a few simple questions to see what you can afford!

Most lenders won't give you a mortgage if the foreclosure you’re targeting isn’t in livable condition. However, if it can pass an inspection, you might be able to take advantage of low-interest, low down payment loans from the USDA, VA, and FHA.

If your lender won’t extend you a mortgage for a Los Angeles foreclosure that’s been deemed non-livable, you could try for a 203(k) FHA loan. This mortgage finances both the purchase price of the property plus up to $35,000 of repairs.

2. Hire a top Los Angeles realtor with foreclosure expertise

Every Los Angeles foreclosure is unique. A realtor who specializes in dealing with foreclosures can help you navigate competing claims, clouded titles, and iffy as-is properties. They may even have inside information about foreclosures that haven’t hit the open market yet, giving you a head start on your perfect foreclosure.

Most importantly, a good agent can tell you what to expect from your buying process. Many foreclosure purchases can drag on because of issues with the bank or tangled ownership. This can be anxiety-inducing for a first-time foreclosure buyer, but an agent will be able to tell you if what’s happening is unusual or if it’s par for the course.

Need help finding a Los Angeles agent with foreclosure expertise? Clever is here to help. We have a large network of agents that work for brokerages like Century 21, Keller Williams, and more. They offer the expertise you need to beat the competition and come out ahead with your offers.

3. Find foreclosed homes in Los Angeles

Foreclosed homes can be difficult to track down. We highly recommend starting your search with a tool that does the searching for you, like Foreclosure.com. Simply search by state and county to see a list of foreclosed homes near you.

California law requires all foreclosure auctions to be advertised to the public for at least three weeks prior to the auction. Typically, this requirement is fulfilled by posting in the courthouse and in local newspaper classifieds.

You can view foreclosure sales from all California newspapers on capublicnotice.com.

National directories for foreclosure auctions to keep in mind include:

• Auction.com
• Bankforeclosuressale.com
• U.S. Department of Housing and Urban Development (HUD)
• Fannie Mae’s HomePath
• Department of the Treasury

Foreclosure auctions require the winning bidder to pay for the home, in full, when the auction is done (or soon after). Most bidders at foreclosure auctions are investors, so if you’re looking for a bargain home to live in, an auction may not be your best bet.

Traditional buyers might be better off looking for real-estate-owned properties. Check the following resources to find REO homes:

• Wells Fargo
• Bank of America
• Bankownedproperties.org

4. Tour foreclosures in person

If you’re interested in a foreclosed home in Los Angeles, always try to tour it in person before submitting an offer.

You’ll likely be able to tour an REO property and even have it inspected before putting in a bid. However, if you’re buying in pre-foreclosure or in a foreclosure auction, you may not be able to tour it beforehand. Many foreclosures are still occupied by owner-borrowers who, understandably, may not want to cooperate in the sale process.

At the very least, try to do an exterior examination of any foreclosure you’re interested in. You can also ask the neighbors about potential vandalism or trespassers.

5. Submit offers

Once you’ve decided on a Los Angeles foreclosure, submit a strong offer. Don’t assume the bank will accept a lowball offer just to get the property off its books.

Include your mortgage pre-approval letter with your offer, as well as any relevant price research you’ve done on comparables. A large down payment upfront will also signal seriousness.

Just keep in mind that it may take a while to get a response. If you’re making an offer on a bank-owned property, for example, the bank may need to run the offer by the loan’s actual owners and wait for their approval.

6. Conduct due diligence on the property

Once your offer has been accepted, you’re now in your due diligence period.

The first step is to have a title company or real estate attorney perform a title review. This review identifies anyone who may have a claim to the property. If the title is found to be free of any liens or claims, it’s designated as a "clean title." Just to be safe, you should opt for title insurance, which protects you against any future claims.

In a conventional sale, this is when you’d receive disclosures from the seller — but in a foreclosure, the owner has not occupied the property, and so it can’t provide the standard disclosures. This is another risky aspect of buying a foreclosure.

7. Get the home appraised if you're financing it

Your lender will order a home appraisal to determine if your home is actually worth the amount of the loan. If it’s appraised at less than the loan, your financing may fall through.

There’s an increased risk of this happening with Los Angeles foreclosures because banks will often hire third-party agents to sell their foreclosed properties. These agents may not specialize in the markets where these foreclosures are located, and their list prices could be far off the actual value of the home.

If your foreclosure is appraised below the sale price, don’t despair — you still have a few options:

• Ask the seller to reduce the price
• Pay the difference out of pocket
• Dispute the value with a second appraisal
• Walk away from the sale (though you risk losing your deposit if you don't have an appraisal contingency)

8. Close on the purchase

How do foreclosures work at closing? If you’re paying cash for your Los Angeles foreclosure, and the purchase agreement doesn’t have any contingencies to worry about, closing will be painless and fast.

Closing on a foreclosure with financing can take a little longer. Lenders usually won’t send a representative to attend the closing in person. Instead, the closing paperwork is mailed to the bank and mailed back once it’s complete. This can add days or weeks to the process.

Another difference from a traditional closing is that the seller — in this case, the bank — probably won’t cover any of the closing costs. While a savvy agent might be able to negotiate a deal for the bank to cover part of the closing costs, don't rely on it.

Since closing on a Los Angeles foreclosure can be complicated, you'll want to have an experienced agen to walk you through the protracted and sometimes confusing process.

When you use Clever to find an agent, not only will you get a highly experienced professional, but you could also qualify for cash back. This free money could be a great way to get started on renovating your foreclosure purchase.

See if you qualify for cash back now!

Pros and cons of buying a Los Angeles foreclosure

Pros

✅ A great price

Buying a foreclosure in Los Angeles can sometimes enable you to buy a top-dollar California home for significantly less than market value.

✅ A clear title

A bank-owned property will likely come with a clear title, as the bank has already solved any liens and claims. You won’t have to worry about claimants coming out of the woodwork months or years later.

Cons

🚫 You’ll have a lot of competition

The truth about buying a foreclosed home is that many other buyers and investors will be vying for the same bargains you’re looking at. And if those other buyers make a better offer than yours — perhaps even an all-cash offer — you’ll probably lose out on that deal of your dreams.

🚫 Many foreclosures are distressed or come in as-is condition

If you’re buying a foreclosure, the seller isn’t going to patch a leaky roof or replace broken appliances before the sale. You’re buying the property as-is, which means you’ll probably have to put in a lot of work once you get in the property.

Stages of a foreclosure in Los Angeles

As a general rule, a foreclosure in Los Angeles takes 200 days minimum, but most take longer. California has one of the longest foreclosure timelines in the U.S.

Pre-foreclosure

The pre-foreclosure period begins after the first missed payment. If the owner-borrower falls 90 days behind on their mortgage, their loan enters default. Federal law dictates that the lender must wait 120 days before serving notice of default.

Once the owner-borrower receives the notice of default, they have 90 days to get current on their mortgage. If they fail to do that, the bank can schedule their home for auction.

Buying a home in pre-foreclosure can yield a great deal, since the seller may want to sell the home as fast as possible so they won’t have a foreclosure on their record.

Foreclosure auction

The foreclosure auction can take place 20 days after the notice of trustee sale was delivered to the owner-borrower. However, a judge or trustee can delay the auction for up to a year, and in California, they often do.

Once the property makes it to auction, it’s sold to the highest bidder. Qualifying to bid involves making a sizable deposit, and the winning bidder has to pay in cash at the close of the auction.

Another important note: if the auction was a non-judicial sale, meaning it wasn’t the result of a lawsuit, the sale is final and irrevocable. However, if it did go through the courts — known as a judicial foreclosure — the former owner has up to a year to reclaim the property by paying off their debts, plus sale costs. For this reason, many investors steer clear of judicial foreclosures.

Bank-owned or real estate owned (REO)

If no bid exceeds the opening bid, the property doesn’t sell and becomes a real estate-owned (REO) property. Now, you'll have to buy it directly from the bank.

Buying a Los Angeles foreclosure directly from a bank requires dealing with a slow-moving bureaucracy. Sometimes, banks just want to get REO properties off their books, no matter the price, and sometimes they’ll insist on near-market value.

A good real estate agent who specializes in foreclosures can help you figure out how to handle your REO purchase!

Los Angeles foreclosure laws for buyers

California Civil Code Section 2924 is the section of California state law that lays out how to buy a foreclosed home in California, including the timelines, requirements, paperwork, and other specifics. If you're looking for information on foreclosure-prevention measures, you'll want to refer to the California Homeowner’s Bill of Rights.

SB 1079, The Homes for Homeowners, Not Corporations Act

This law took effect in 2021 and makes it easier for people to buy foreclosed properties — even if an investor has already won it at auction. Under this law, anyone who wants to actually occupy a property can submit a competing offer for up to 45 days after an investor won it at auction. If their offer beats the investor’s winning bid, the occupant gets the property.

The Servicemembers Civil Relief Act (SCRA)

This federal law extends foreclosure protections to military servicemembers who were on active duty at the time their property was foreclosed. Military personnel who quality can challenge or reverse their foreclosure for 90 days after they leave active duty, which could complicate some foreclosure purchases.

FAQs about buying a foreclosed house in Los Angeles

Why trust us?

Semya-Moya has spent hundreds of hours researching foreclosure law and interviewing licensed agents with experience buying foreclosures to create this guide. We utilized authoritative sources including the California Civil Code and the Judicial Council of California.

The author, Lindsay Stefan, has over eight years of experience writing, editing, and copywriting for various websites, publications, and advertisements.

Learn more about Clever.

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The post How to Buy Foreclosed Homes in Los Angeles (2023 Guide) appeared first on Semya-Moya.

The District of Columbia has 1 foreclosure for every 5,152 housing units, putting it roughly 20th nationally. Considering that DC only has a little more than 350,000 housing units total, not many foreclosures are coming onto the market.

Still, when a DC foreclosure does hit the market, it’s a golden opportunity for a buyer or investor to get a property in a hot market at a big discount.

Buying a foreclosure can be a little more intimidating than buying a conventional home. That’s why your best bet is to partner with an experienced District of Columbia real estate agent — preferably one who specializes in foreclosures. A seasoned agent will help you stay on top of the District’s fast-moving foreclosure market, put in competitive bids, and get the keys to your dream foreclosure!

If you need help finding an agent that focuses on foreclosures, Semya-Moya is an agent-matching service that can connect you with the top foreclosure experts in your area — no strings attached.

Finding foreclosures is hard enough — let us help simplify the agent-finding process. Get free local agent matches now!

What is a foreclosed home?

A foreclosed home is a property that’s been seized (foreclosed on) by the lender, government, or other agency because the borrower-owner fell behind on their mortgage payment, taxes, or other fees.

To recoup their losses, the foreclosing party then sells the property either at a foreclosure auction or on the open market.

How to buy foreclosed homes in Washington, DC

1. Get preapproved for financing

Mortgage preapproval requires you to submit your financial info to your lender. It will then tell you how much of a loan you can take out. Getting a pre-approval letter from your lender will show sellers that you’re a serious, qualified buyer.

If you’re curious how much you can get preapproved for, our friends at Rocket Mortgage can send you an estimate right away. Answer a few simple questions to see what you can afford!

Buyers targeting foreclosures in Washington, DC could access low-interest government-backed mortgage programs from the FHA, VA, or the USDA.

Qualified DC residents can also access special financing like the District’s Home Purchase Assistance Program, which offers home buyers up to $202,000 in financing assistance.

2. Hire a top Washington, DC realtor with foreclosure expertise

Buyers targeting foreclosures in DC should partner with a DC agent who has ample experience in the foreclosure market. The right agent can:

• Let you know about foreclosures before they hit the market
• Advise you on making optimal offers
• Help you navigate foreclosure auctions
• Guide you through what can be a long, confusing closing process

Need help finding a Washington, DC agent with foreclosure expertise? Clever is here to help. We have a large network of agents that work for brokerages like Century 21, Keller Williams, and more. They offer the expertise you need to beat the competition and come out ahead with your offers.

3. Find foreclosed homes in Washington, DC

To find foreclosed homes for sale in DC, we highly recommend starting your search with a tool that searches for you, like Foreclosure.com. Simply search by state and county to see a list of foreclosed homes near you.

The District’s Office of Tax Revenue also maintains a list of properties to be auctioned off for back property taxes.

Big real estate websites might be another place to look. For example, Zillow and Realtor.com both let you search for pre-foreclosures and foreclosures within a certain radius.

Private banks often maintain directories of their bank-owned foreclosure properties:

• Wells Fargo’s REO List
• Bank of America’s REO list

Finally, some government-maintained databases of foreclosed properties include:

• The U.S. Department of Housing and Urban Development (HUD) foreclosed homes database
• Fannie Mae’s HomePath
• Freddie Mac’s HomeSteps
• The Department of Treasury’s list of IRS-repossessed foreclosures
• USDA Rural Development and Farm Service foreclosures

4. Tour foreclosures in person

You should always try and tour a foreclosure in person before you put in an offer. But this isn't always possible.

If the foreclosed property is still occupied, the people living there may not be eager to help the sale process along. Even if it's an empty foreclosure, these properties are sold "as is" and are not usually accessible to auction bidders or buyers. However, if a bank-owned property (REO) is being sold on the open market, the listing agent will usually let you tour the property.

If you do manage to tour a foreclosure, look for things like signs of neglect or trespassers, serious damage like burst pipes or a leaky roof, and the quality of the neighborhood.

5. Submit offers

To make your offer on your Washington, DC foreclosure as strong as possible, consider the following:

• Enclose your mortgage pre-approval: Pre-approval shows you're a qualified buyer.
• Submit a close-to-market-value offer: While many foreclosure buyers are tempted to submit lowball offers, most lenders today aren't desperate to offload their foreclosed properties.
• Make a sizable down payment: Putting more money upfront shows you're a serious, safe buyer.
• Prepare for a long wait: If you're making an offer on a bank-owned property, your offer must move up the chain of command before it can be approved.

6. Conduct due diligence on the property

Once the seller accepts your offer, it's time for you to conduct your due diligence.

In a conventional sale, this is when you'd typically receive required disclosures from the sellers. But since the owner of a foreclosure hasn't occupied the property, they won't be able to provide these to you.

To protect yourself, take these four actions:

• Buy title insurance to protect you if any undiscovered claims on the property emerge after the sale.
• Order a title review to look into whether there are any legitimate liens or claims on the title. If any are discovered, they'll have to be remedied before the sale can be finalized. The title review is usually done by a title company or a real estate attorney.
• Order a survey to confirm the property’s boundaries.
• Get an inspection. With some foreclosures, this may not be possible. Government foreclosures have unique rules governing pre-sale inspections, and while you can usually have a bank-owned property inspected, the owners probably won’t accept an inspection contingency.

7. Get the home appraised if you're financing it

Your lender will require an appraisal of your foreclosed property purchase to confirm it's actually worth what it's loaning you. If the appraisal amount is less than your mortgage amount, the sale could fall through.

If your appraisal ends up being low, your options include:

• Getting the price reduced
• Getting a second appraisal
• Making up the difference in cash
• Walking away

8. Close on the purchase

Closing on a foreclosed property in Washington, DC can be unconventional for a number of reasons.

• The seller won't cover any closing costs: In a conventional sale, the seller usually meets you halfway and pays a portion of the closing costs. But when buying a foreclosed property, the seller rarely compromises. (An experienced agent may be able to negotiate a better deal.)
• Closing can take far longer than a day: With a foreclosure purchase, you'll likely have to send the closing paperwork to the seller (usually a bank) and wait for them to review, sign, and return it.

Closing on a Washington, DC foreclosure can be complex, and there's a lot at stake. Consider hiring a reputable agent to help guide you through the process.

When you use Clever to find an agent, not only will you get a highly experienced professional, but you could also qualify for cash back. This free money could be a great way to get started on renovating your foreclosure purchase.

See if you qualify for cash back now!

Pros and cons of buying a foreclosed home in Washington, DC

Pros

✅ Low price

The main reason to pursue a Washington, DC foreclosed home is that you can often buy a property for significantly less than market value. This is an especially valuable opportunity in a pricey market like the District.

✅ Clear ownership

If you're purchasing a bank-owned property, the bank has already cleared the title, so you don't have to worry about unknown liens or claims emerging in the future.

Cons

🚫 Foreclosures are sold "as is"

When you buy a home in DC in a conventional sale, you can negotiate with the seller to make repairs before closing. But foreclosures are almost always sold "as is," so any repairs are your responsibility.

🚫 Inspections can be hard to arrange

Since many foreclosures are still occupied or boarded up when they're listed, you may not be able to physically access the property before you submit an offer.

🚫 Some foreclosures are distressed

Disgruntled occupants can vandalize the property shortly before they're evicted via foreclosure, and abandoned foreclosures are sometimes illegally occupied by vagrants.

Stages of a foreclosure in Washington, DC

Pre-foreclosure

Once the owner-borrower misses their first mortgage payment, pre-foreclosure begins. Here's a quick look at the pre-foreclosure timeline:

• The bank mails notice of default to the borrower no more than 36 days after their first missed payment.
• In the District of Columbia, borrowers can opt for foreclosure mediation within 30 days of receiving the notice of default.
• If mediation fails, the bank sends a notice of intention to foreclose to the borrower. This notice includes the time of the foreclosure auction. Foreclosure can't happen until a loan has been delinquent for 120 days.
• In the District of Columbia, borrowers can "reinstate" the loan by paying all back payments and fees up to five days before the auction.

Foreclosure auction

If the owner-borrower doesn't bring their mortgage current by the end of pre-foreclosure, the property is auctioned off to the highest bidder at a foreclosure auction.

While this does theoretically offer an opportunity to snag a bargain foreclosure, these auctions are usually attended by investors who pay all cash, so it can be tough for a conventional buyer to get a deal. In addition, many auction houses require a significant deposit to participate in bidding, which can limit access.

Bank-owned or real estate owned (REO)

A foreclosed property that fails to sell at auction becomes a bank-owned or real-estate-owned (REO) property.

Many banks contract with real estate agents to sell these REO properties on the open market, though sometimes buyers have to negotiate directly with the bank. Either way, buying a foreclosed property directly from the bank can be a lot more challenging — and frustrating — than buying from an individual seller. The best course of action here is to work with a Washington, DC real estate agent who has experience with bank-owned foreclosure properties.

Washington, DC foreclosure laws for buyers

You'll find the main laws on DC disclosures in DC § 42-815. It covers the rules and timelines for the:

• 30-day Notice of Intent to Foreclose requirement
• Public Notice of foreclosure
• Notice of Default
• Owner Right of Reinstatement (up until five days before the auction)

Foreclosure mediation

Lawmakers recently added a new section to DC foreclosure law — § DC 42–815.02. This DC law gives homeowners the right to a mediation process that can halt or delay a non-judicial foreclosure. If you agree to meditation, you have to complete the process with 180 days unless both parties agree to a 30-day extension.

The Servicemembers Civil Relief Act

The Servicemembers Civil Relief Act is a federal law that extends significant foreclosure protections to members of the military. It includes a right of redemption that can reverse a foreclosure after the fact if it took place during the former owner’s active duty.

FAQs about buying a foreclosed house in Washington, DC

Why trust us?

Semya-Moya has spent hundreds of hours researching foreclosure law and interviewing licensed agents with experience buying foreclosures to create this guide. We utilized authoritative sources including the Code of the District of Columbia and the DC Office of Tax and Revenue.

The author, Lindsay Stefan, has over eight years of experience writing, editing, and copywriting for various websites, publications, and advertisements.

Learn more about Clever.

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The post How to Buy Washington, DC Foreclosures (2023 Guide) appeared first on Semya-Moya.

Buying a foreclosed property in Maryland is a great way to find a home under market value in a hot housing market. Home prices in Maryland have gone from around $300,000 in 2018 to over $406,000 in November 2022, but foreclosures often sell for less.

However, the truth about buying a foreclosure in Maryland is that it can be a long, complicated process. Under certain circumstances, the previous owner can even have the foreclosure reversed, sometimes years later.

Whether you’re looking to buy a starter home at a deep discount or you’re an investor looking for your fourth rental property, the best way to begin your foreclosure purchase is to partner with an experienced local real estate agent who can guide you through the market.

Agents that focus on foreclosures will know exactly where to look for good deals — and they may even have ties with local lenders. If you need help finding an agent that focuses on foreclosures, Semya-Moya is an agent-matching service that can connect you with the top foreclosure experts in your area — no strings attached.

Finding foreclosures is hard enough — let us help simplify the agent-finding process. Get free local agent matches now!

What is a foreclosed home?

In most cases, a foreclosed home is a dwelling that is seized by the lender or government after an owner fails to keep up with their mortgage payments or taxes. The foreclosing party then sells the home to try and recoup the money still owed to them.

Lender-owned properties are called real estate owned (REO). Learn more about the different types of foreclosures.

How to buy foreclosures in Maryland

1. Get preapproved for financing

The first step in how to buy a foreclosed home is to get a preapproval letter. Having a preapproval letter signals you’re a qualified buyer, and sellers will take you more seriously.

To get preapproved, you'll need to provide your lender with your financial information. It'll use this to see how much it's willing to lend you.

If you’re curious how much you can get preapproved for, our friends at Rocket Mortgage can send you an estimate right away. Answer a few simple questions to see what you can afford!

You might be able to get a conventional loan if the home is in livable condition. Or, if you qualify, you can even use federally backed FHA, USDA, or VA loans that come with very low interest rates and down payment requirements.

Another option for buyers is a 203(k) FHA loan, which allows the buyer to finance the price of the property plus the cost of repairs with a single mortgage.

2. Hire a top Maryland realtor with foreclosure expertise

Finding a Maryland realtor who has experience with foreclosed properties can make the process of getting that perfect foreclosure much smoother.

Agents who specialize in foreclosures often have relationships with lenders. This helps them find out about foreclosed properties before they officially hit the market. They’ll understand the dynamics of the local foreclosure market and may even have insight into claims on specific properties.

Finally, their experience with the complicated foreclosure process can be an important source of assurance for the buyer.

Need help finding a Maryland agent with foreclosure expertise? Clever is here to help. We have a large network of agents that work for brokerages like Century 21, Keller Williams, and more. They offer the expertise you need to beat the competition and come out ahead with your offers.

3. Find foreclosed homes in Maryland

Foreclosed homes can be difficult to track down. We highly recommend starting your search with a tool that does the searching for you, like Foreclosure.com. Simply search by state and county to see a list of foreclosed homes near you.

Other search options exist when buying a Maryland foreclosure. Some good places to start are:

• The Maryland Department of Housing and Community Development
• The Department of the Treasury
• The U.S. Department of Housing and Urban Development
• Fannie Mae’s HomePath website
• Banks like Bank of America and Wells Fargo

For buyers interested in bidding on foreclosures at auction, resources include:

• Maryland's Office of Real Estate and Economic Development
• Auction.com
• Bankforeclosuressale.com

Auctions are generally for investors or buyers with a lot of cash on hand, as you’ll be expected to pay the purchase price in full if you win the auction. Most auctions also require you to put a sizable deposit down just to bid that will either be refunded or put toward your purchase.

For those reasons, conventional buyers using mortgages to purchase are better off finding homes in pre-foreclosure or buying an REO property, even though it will take a lot longer.

4. Tour foreclosures in person

Buyers should always try to visit the property and check it out for themselves — even an exterior walkaround can yield a lot of information, and neighbors can often tell you if the property has been neglected or vandalized.

Usually, banks that own REO properties let buyers go in before the sale. However, if a foreclosed property is still occupied, the people living there may not agree to let potential buyers tour the home.

Many foreclosed properties are also inaccessible because of neglect or damage, as occupants are often evicted without having a chance to clean up.

5. Submit offers

How much to offer on a bank-owned property varies. One common misconception about REO properties is that the bank is eager to get the property off its books and will take a lowball offer. Banks are usually savvier than that. Typically, they’ve done their own price research and have a good idea of what the property is worth.

Make your offer stronger by including your own price research on comparable properties, your mortgage preapproval, and a big deposit.

Once you’ve made your offer, be patient. Banks often move slowly through this process and may come back at you with a counteroffer. This is when working with an agent who’s experienced with negotiating foreclosures can pay big dividends!

6. Conduct due diligence on the property

After going under contract, the due diligence period starts.

During the due diligence period, you’ll want to have the title cleared by a real estate attorney or title company. They will look for any competing liens or claims and determine clear ownership. You'll also want title insurance to protect you from any claims that pop up in the future.

This is also when you’ll want to have a thorough inspection done to uncover any hidden problems.

7. Get the home appraised if you're financing it

Lenders generally require a home appraisal to make sure the home you’re buying is worth what they’re loaning you.

Why are appraisals so important for foreclosures? Lenders who own foreclosed properties often hire outside agents unfamiliar with the local market to sell these properties, and they may misprice the property. Then when the home appraisal comes in under the sale price, the lender could get cold feet.

So what happens if your foreclosure appraisal comes in lower than the sale price? You have several options:

• Ask for a price reduction that's closer to the appraised value.
• Dispute the appraised value by getting your own appraisal.
• Pay the difference if you really want the house.
• Walk away from the sale — just know you may lose your deposit if you didn't have an appraisal contingency.

8. Close on the purchase

If you’re paying cash for a foreclosure, with no contingencies in the deal, closing should be fast and easy.

If you’re financing the purchase, the closing process will be similar to a conventional sale’s closing, but you'll likely need to pay all closing costs on your own or try to negotiate otherwise.

One factor that can complicate closing is that many REO properties are owned by banks without a presence in Maryland. In these cases, required paperwork has to be sent to them, make its way through the bank bureaucracy to be signed and approved, and mailed back — a process that can take weeks.

Because closing on a foreclosed property can be complex, we suggest working with an experienced real estate agent who can guide you through the process and review all the relevant documentation.

When you use Clever to find an agent, not only will you get a highly experienced professional, but you could also qualify for cash back. Eligible buyers can receive cash back after closing. This free money could be a great way to get started on renovating your foreclosure purchase.

See if you qualify for cash back now!

Pros and cons of buying a Maryland foreclosure

Pros

✅ Low price

The top reason to buy a foreclosure in Maryland (or any other state) is that you might be able to get it for significantly below market value. In many instances, the lender’s top priority just is to recoup whatever they’re owed on the home and not necessarily get the highest possible sale price.

✅ Title clean and clear

If you’re buying an REO property, the bank has likely already solved the various claims and liens associated with the property. That means you won’t have to shell out any cash to resolve claims from unknown creditors down the line.

Cons

🚫 As-is condition

Nearly all foreclosures are either distressed or sold in as-is condition. Even if you’re able to have the property inspected before you put in an offer, you’ll likely have a lot of work ahead of you once you get the keys.

🚫 Brisk competition

There are a lot of other people trying to buy foreclosures for the very same reason you are. Some of those competitors may be investors with deep pockets, and their all-cash, zero-contingency offers could trump yours.

🚫 Accelerated timeline

Because the Maryland foreclosure market is so competitive, you may have to move fast with an offer. You might not have time to have the home inspected or see it in person.

Stages of a foreclosure in Maryland

Pre-foreclosure

How do foreclosures work? The first step is pre-foreclosure — the period after the owner falls behind on their mortgage payments but before the property is officially foreclosed.

Once the owner has gone three months without making a payment, the lender generally gives them 45 days to bring the mortgage current. If they don’t, the lender issues a notice of default and initiates formal foreclosure proceedings after 120 days.

Buying a property in pre-foreclosure can be very advantageous. Sellers are under time pressure to sell before foreclosure devastates their credit rating.

Foreclosure auction

A foreclosure auction takes place after the lender repossesses the property. The property is auctioned off so the lender can recover some of the money still owed to them.

In a foreclosure auction, the property is sold to the highest bidder. Generally, those bidders are investors or deep-pocketed buyers who are paying all cash, so this isn’t a great place for individual buyers to snag a bargain.

Bank-owned or real-estate-owned (REO)

If a foreclosed property doesn’t sell at auction, it becomes a bank-owned or real estate-owned (REO) property. These properties are managed by the institution’s REO department, meaning the selling process often involves navigating several layers of bureaucracy.

Buying an REO property can be unpredictable. Sometimes, the bank just wants to recover its investment and will sell the property at a significant discount. At other times, it may demand a price closer to market value. A good real estate agent who specializes in foreclosures can help you figure out how to handle your REO purchase!

Maryland foreclosure laws for buyers

Maryland condominium and HOA foreclosure law

There are three areas of Maryland state law that govern how homeowners associations and condominium owners associations can foreclose on properties that fall behind on their HOA and COA obligations:

• The Maryland Homeowners Association Act
• The Maryland Condominium Act
• The Maryland Contract Lien Act

In Maryland, the law states that HOAs can foreclose once the homeowner falls 90 days behind on their dues or other fees. In some other states, the lender has first claim on the foreclosure sale proceeds, but in Maryland, the HOA claims are settled first — meaning that HOA foreclosures are relatively common in Maryland.

Protections for military servicemembers

The Servicemembers Civil Relief Act (SCRA) allows members of the military to challenge or even reverse foreclosure sales years later, as long as they file a claim within 90 days of leaving the service. Buyers should be wary of purchasing foreclosed properties that were owned by military servicemembers, as there could be complications.

FAQs about buying a foreclosed house in Maryland

Why trust us?

Semya-Moya has spent hundreds of hours researching foreclosure law and interviewing licensed agents with experience buying foreclosures to create this guide. We utilized authoritative sources including the Maryland Department of Housing and Community Development and the Maryland Office of Real Estate and Economic Development.

The author, Lindsay Stefan, has over eight years of experience writing, editing, and copywriting for various websites, publications, and advertisements.

Learn more about Clever.

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The post How to Buy Foreclosures in Maryland (2023 Guide) appeared first on Semya-Moya.

Now that the housing market is finally calming down after the pandemic[1], buyers are facing a new challenge: Soaring mortgage rates.[2]

In Washington, the average 30-year fixed mortgage rate is 6.92% — up from 2021's historic lows. This raises the average monthly mortgage payment to $2,988 (assuming a 20% down payment at the median home value).

But buying a home in Washington is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.

In this guide, you’ll learn how to buy a house in Washington with confidence no matter what the market brings. Learn why you can trust our advice.

Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.

Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.

Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Semya-Moya. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!

Step 1: Save for a down payment

Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.

Typically, mortgage lenders in Washington want you to contribute 20% of the purchase price as a down payment. That would be $113,210 for a $566,052 home — the typical home value in Washington.

However, you have options to lower your down payment amount.

Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).

But making a down payment of less than 20% comes with some risks.

First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.

Second, you may have to purchase mortgage insurance.

Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.

Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.

VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.

» READ MORE: Everything you need to know about low-income home loans

Washington down payment assistance programs

There are several down payment assistance (DPA) programs that cater towards Washington state residents. If you are a first-time or low-income buyer, you may be eligible for a grant or second mortgage from one of these programs.

Here are just a few resources you can check out:

WSHFC DPA Program

The Washington State Housing Finance Commission's (WSHFC) Home Advantage DPA program offers a 30-year, 0% interest second mortgage for buyers approved for a Home Advantage first mortgage. The total amount of the loan may be 4% or 5% of the first mortgage amount.

To qualify, the borrower's annual income cannot exceed $160,000, and they must complete a homebuyer education course.

WSHFC Needs-Based Assistance

WSHFC's Needs-Based program offers a 30-year, 1% interest second mortgage to those with a Home Advantage first mortgage. Financial assistance may go up to $10,000, depending on the individual's needs.

To qualify, participants must complete a homebuyer education course and not earn more than the household income limit set for their county.

WSHFC Opportunity DPA Loan Program

The Opportunity DPA Loan Program offers a 30-year, 1% interest second mortgage to those with an Opportunity first mortgage. Borrowers may receive up to $15,000 in financial assistance, which only has to be repaid if the home is sold, transferred, or refinanced.

This program is only available for first-time buyers who are purchasing homes in specific counties. Eligible participants cannot earn more than the household income limit set for their county.

U.S. Department of Housing and Urban Development

HUD’s list of alternative programs in Washington can be found here.

Step 2: Find a great real estate agent in Washington

Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Washington.

Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:

• Years of experience
• Number of transactions in the last year (the more the better!)
• Experience in your price range
• Overall review score
• Individual reviews and complaints

Step 3: Get preapproved for a mortgage

A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.

Most sellers in Washington will require preapproval before showing you their home.

You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Washington home.

Step 4: Choose the right location

Currently, the typical home value in Washington is $566,052, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!

Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.

To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Tacoma:

Home value appreciation in Tacoma

Step 5: Start house hunting in Washington

Searching for homes in Washington is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.

Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."

Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.

Look at current housing inventory

The timing of your house hunt in Washington can have a big impact on your number of options. For example, in Washington, May has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.

On the other hand, December gives you the fewest choices in Washington. Historically, there are 59.3% fewer homes for sale than during Washington's peak season.

Housing inventory in Washington by season

Step 6: Make an offer

Once you find a Washington house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Currently, in Washington, homes stay on the market for 47 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.

Historically, Washington homes sell fastest in June, where the average property is only on the market for 34 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.

On the other hand, if you buy in January, you have a bit more time to search. Homes typically stay on the market 23 days longer than Washington's annual average.

Average time homes spend on market in Washington

» LEARN MORE: What should an offer include?

Step 7: Inspections and appraisals

Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.

Home inspections in Washington

Having your Washington home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.

Your inspector should check out the following parts of the property:

• Roof
• Foundation
• Electrical system
• HVAC system
• Plumbing

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

Washington-specific inspections

Washington state law requires sellers to complete a disclosure form about their property to interested buyers. However, it's easy for some issues to go undetected by the seller. It's up to the buyer to take extra precautions and conduct additional tests to make sure a home is safe before closing.

In addition to a general home inspection, Washington homebuyers are strongly advised to have these tests done as well:

• Radon testing: If the seller hasn't checked their property's radon levels within the past year, you should do a test as soon as possible. High levels of radon can lead to serious health concerns over time, so consider ordering a free radon test kit from the Washington State Department of Health.
• Pest inspection: Termites and other pests often go unnoticed until they cause significant property damage, so homebuyers are encouraged to get a professional pest inspection to thoroughly check a home for signs of infestation.

Appraisals

Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

» LEARN: 3 options for buyers after a low appraisal

Step 8: Close on your new home!

On closing day in Washington, you'll meet at your title company to complete some paperwork and settle your closing costs.

You can expect to spend about an hour reviewing and signing legal documents, including:

• Your final loan application
• The deed
• The mortgage promissory note
• The disclosure statements

Make sure to read each page carefully before signing. All information must be accurate for a clean title transfer.

Once you're finished with your paperwork, you'll pay your closing costs to the title company. The company will distribute the payments to the correct recipients on your behalf.

As a homebuyer, your closing costs can be divided into four main categories:

• Lender fees: Fees paid to your lender for preparing your loan. Sometimes, appraisal fees, survey fees, and other expenses related to your loan are included in this payment.
• Title and escrow charges: Fees the title company charges for providing title insurance, conducting the title search, and facilitating the closing.
• Prepaid costs: Ongoing homeownership costs, such as property taxes and homeowners insurance. Mortgage lenders often require new homeowners to pay for these expenses up front.
• Other closing costs: Miscellaneous expenses that vary based on your unique situation. Natural disaster certification fees, pest inspection fees, and real estate attorney fees are a few common expenses for buyers.

Buyers in Washington typically pay 3–5% of the purchase price in closing costs. For a $566,100 home — the typical home value in Washington — that's between $16,983 and $28,305!

Frequently asked questions

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The post How to Buy a House in Washington State: 8 Steps Real Estate Experts Recommend appeared first on Semya-Moya.

California has the 10th highest foreclosure rate in the U.S. — 1 foreclosure for every 3,651 units. With nearly 14.4 million housing units in the state, that's a lot of foreclosures. And it's great news for buyers or investors looking for a deal in the nation’s second-most expensive housing market. So how does buying a foreclosure work?

The truth about buying a foreclosed home in California is that it can be a long, complicated process. That’s why the first step in your real estate journey should be to partner with an experienced local real estate agent who specializes in foreclosures. A good agent will help you navigate the purchase process, tell you what to expect, and help you get your foreclosure purchase across the finish line.

If you need help finding an agent that focuses on foreclosures, Semya-Moya is an agent-matching service that can connect you with the top foreclosure experts in your area — no strings attached.

Finding foreclosures is hard enough — let us help simplify the agent-finding process. Get free local agent matches now!

What is a foreclosed home?

Foreclosure happens when a borrower misses their mortgage payments or fails to pay their taxes or other fees. The lender, government, or other organization can seize and take ownership of the property to recoup their losses.

Once an organization forecloses on a home, it usually sells the property to recover its investment. Usually, this comes in the form of a foreclosure auction or real-estate-owned (REO) sale.

How to buy foreclosed homes in California

1. Get preapproved for financing

Getting prepproved for a mortgage involves submitting your financial information to a lender. If you meet its loan standards, it'll issue you a preapproval letter telling you how much you can borrow.

If you’re curious how much you can get preapproved for, our friends at Rocket Mortgage can send you an estimate right away. Answer a few simple questions to see what you can afford!

If the foreclosure is livable, you can usually take out either a conventional loan or federally backed mortgage programs like FHA, USDA, and VA loans. California buyers can also use state-specific financing programs like California’s MyHome Assistance Program.

2. Hire a top California realtor with foreclosure expertise

Whether you’re looking to buy San Diego foreclosure homes or a foreclosure in Los Angeles, you’ll want to work with a local real estate agent who has experience with foreclosures.

A seasoned foreclosure-centric agent can help you:

• Monitor the fast-paced foreclosure market
• Leverage their professional network to find out about foreclosures before the competition
• Understand hyper-competitive foreclosure auctions
• Navigate the long closing process

Working with the right agent can give you some much-needed reassurance and peace of mind as you figure out how to purchase a foreclosed home.

Need help finding a California agent with foreclosure expertise? Clever is here to help. We have a large network of agents that work for brokerages like Century 21, Keller Williams, and more. They can show you how to buy a foreclosed home and provide you with the expertise you need to come out ahead with your offers.

3. Find foreclosed homes in California

Foreclosed homes can be difficult to track down. We highly recommend starting your search with a tool that does the searching for you, like Foreclosure.com. Simply search by state and county to see a list of foreclosed homes near you.

In California, state law requires all foreclosure auctions be advertised to the public for at least three weeks before the auction. This is usually done by publishing a classified ad or posting in the local courthouse. You can search and view foreclosure announcements from all California newspapers at capublicnotice.com.

Otherwise, to find the right foreclosure, you'll have to search government or bank foreclosure directories. These list all homes that have been foreclosed on by the government or lender.

Leading government foreclosure directories include:

• The U.S. Department of Housing and Urban Development (HUD) home store
• The Department of the Treasury’s list of IRS-repossessed foreclosures
• Fannie Mae’s HomePath

Sources of bank-owned or REO foreclosures include:

• Wells Fargo REOs
• Bank of America REOs
• Bankownedproperties.org

4. Tour foreclosures in person

Touring a foreclosure in person before you submit an offer is always a good idea, as it will give you a sense of the strengths and potential problems of the property. But properties in different phases of the foreclosure process offer different levels of accessibility.

• In pre-foreclosure: Buyers are often desperate to sell, so it’s possible they’ll let you take a look at the property if it will help close the sale. But they may also be unhappy about being forced out of their home — and not excited about enabling the process.
• At foreclosure auction: You’ll rarely be able to inspect foreclosure auction properties in person. Many of these properties are still occupied, and those occupants won't want to help the bank sell their homes. Other properties may be abandoned or dilapidated and are being sold "as is."
• Bank-owned (REO) property: These properties are usually sold on the open market with an agent, so they’re usually very easy to tour in person.

If you can’t tour the property in person, drive or walk by to see if the home has been vandalized or is currently occupied.

5. Submit offers

Submitting an offer on a California foreclosure is a lot like submitting an offer on a conventional home. Here are some tips to make your offer competitive:

• Don’t lowball: The bank very likely knows what the property is worth on the market and is probably not desperate to offload it for pennies on the dollar.
• Include your mortgage preapproval letter: Your offer will be stronger if the seller knows that financing won’t fall through.
• Put as much money down as possible: A sizable down payment signals you’re a serious buyer.
• Be patient: If you’re buying from a bank, several different people and departments will need to sign off on the sale.

6. Conduct due diligence on the property

If and when your offer is accepted, the due diligence period begins. Here is how to perform due diligence:

• Get a title review: This is done by a real estate attorney or a title company. It investigates any claims or liens connected to the property.
• Purchase title insurance: This protects you from any undiscovered claims that may surface later.
• Don’t count on disclosures: In a conventional sale, you might receive disclosures about the home. But since the owner of a foreclosure has probably never occupied it, you won’t receive this information.

7. Get the home appraised if you're financing it

Your lender will order a home appraisal to confirm the property is worth what you're paying. If the appraisal comes in lower than the loan, your lender may deny your mortgage application.

This is a special risk with foreclosures since they’re often priced and sold by agents unfamiliar with the area.

If your appraisal comes in low, you’ll have a few options:

• Ask the seller to the lower the price to the appraised value.
• Make up the difference out of pocket.
• Ask for a different appraisal.
• Cancel the sale.

8. Close on the purchase

If you’re paying cash, closing should be fast and easy. If you’re not, here are some of the differences between closing on a foreclosure in California and a conventional closing:

• Closing can take a while: The bank won’t send a representative to the closing. Instead, you’ll have to mail the closing documents to the bank and wait for them to return them.
• Seller won’t cover closing costs: The bank has little incentive to share closing costs. That will leave you, the buyer, paying most or all of them.
• Closing may not be final: If you’re an investor, the law in California allows nonprofits and occupant-buyers to buy the property out from under you within 45 days.

Closing on a foreclosure in California can be confusing, so it’s wise to work with an experienced real estate agent who can help you navigate the process.

When you use Clever to find an agent, not only will you get a highly experienced professional, but you could also qualify for cash back. Eligible buyers will receive cash back after closing, which is a great way to get started on renovating your foreclosure purchase.

See if you qualify for cash back now!

Pros and cons of buying a foreclosed home in California

Pros

✅ You could get a bargain

In California, where the average home is worth more than twice the U.S. average home value, foreclosures are a chance to get an affordable home. Your odds of getting a deal are better if you search in one of California's top investment markets.

✅ You'll likely have a clean title

If you buy an REO property, the bank has already untangled the many claims and liens on the property. That means you can buy with confidence.

Cons

🚫 You could lose the property — even after closing

SB 1079, a state law passed in 2021, allows nonprofits and individual occupant-buyers to step in and supersede an investor’s winning bid or offer for up to 45 days. In addition, judicial foreclosures in California can be reversed for up to a year if the former owner pays off what they owe, plus sale costs.

🚫 Many foreclosures are in poor condition

Because they’ve been neglected or even vandalized by disgruntled occupants, many foreclosures are distressed. Foreclosures are typically sold "as is."

🚫 It's a competitive market

In a real estate market as expensive as California’s, there are a lot of other people looking for a deal.

🚫 It could take a long time to buy

California has one of the lengthiest foreclosure processes in the U.S., taking a minimum of around 200 days — and often dragging out for months or years.

Stages of a foreclosure in California

Pre-foreclosure

Pre-foreclosure is the period before the bank or government takes ownership of the home. The timeline breaks down like this:

• First mortgage payment is missed: Pre-foreclosure begins
• Mortgage falls 90 days behind: Loan enters default
• 120th day after the first mortgage payment is missed: Lender can legally serve notice of default
• After notice of default: Owner has 90 days to get current on mortgage, or lender can schedule house for auction

Buying a house in pre-foreclosure can yield a great deal since the seller likely just wants to sell quickly to avoid foreclosure. But as you can see from the timeline above, you’ll be on the clock to close the deal.

Foreclosure auction

In California, a foreclosed property can be auctioned off 20 days after the notice of trustee sale is delivered to the borrower. However, many foreclosures in California are delayed for up to a year, or even longer.

At a foreclosure auction, the property is sold to the highest bidder.

Bank owned or real estate owned (REO)

If a foreclosure doesn’t sell at auction, it becomes a real-estate-owned (REO) or bank-owned property.

Buyers purchase these properties directly from the lender or bank, which can be difficult. Banks have layers of bureaucracy that each have to approve a sale, and ownership of these properties can be muddled. If you’re looking to buy an REO property, you’d be wise to partner with an experienced California agent who can let you know what to expect.

California foreclosure laws for buyers

California Civil Code Section 2924 is the main section of California state laws that define how the foreclosure process works. However, there are a few other laws that provide useful context on buying California foreclosures.

The California Homeowner’s Bill of Rights (HBOR)

Passed in 2012, HBOR applies to nonjudicial foreclosures of residential properties and offers homeowners specific protections against foreclosures. It defines foreclosure-prevention options and also gives tenants the right to stay in the home, even after the sale, if they had a pre-existing fixed-term lease.

The Homes for Homeowners, Not Corporations Act (SB 1079)

Passed in 2021, this law allows individuals and nonprofits to overrule an investor’s winning bid or offer on a foreclosure for up to 45 days — meaning that they can essentially take the property from the investor for up to a month and a half after the sale is ostensibly finalized.

The Servicemembers Civil Relief Act (SCRA)

SCRA offers foreclosure protections to military servicemembers, including a generous right of redemption that can reverse a foreclosure months or years after the fact.

HOA foreclosures and the right of redemption

In California, homeowners associations (HOAs) can foreclose on homes that fall behind on dues. However, former owners have a 90-day right of redemption during which they can reclaim the property by paying off their debts. In certain cases involving a judicial foreclosure, they may have up to a year!

FAQs about buying a foreclosed house in California

Why trust us?

Semya-Moya has spent hundreds of hours researching foreclosure law and interviewing licensed agents with experience buying foreclosures to create this guide. We utilized authoritative sources including the California Civil Code and the California Homeowner Bill of Rights.

The author, Lindsay Stefan, has over eight years of experience writing, editing, and copywriting for various websites, publications, and advertisements.

Learn more about Clever.

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Buying a House in California in 8 Easy Steps

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The post How to Buy Foreclosed Homes in California (2023 Guide) appeared first on Semya-Moya.

Now that the housing market is finally calming down after the pandemic[1], buyers are facing a new challenge: Soaring mortgage rates.[2]

In Wyoming, the average 30-year fixed mortgage rate is 6.98% — up from 2021's historic lows. This raises the average monthly mortgage payment to $1,780 (assuming a 20% down payment at the median home value).

But buying a home in Wyoming is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.

In this guide, you’ll learn how to buy a house in Wyoming with confidence no matter what the market brings. Learn why you can trust our advice.

Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.

Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.

Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Semya-Moya. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!

Step 1: Save for a down payment

Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.

Typically, mortgage lenders in Wyoming want you to contribute 20% of the purchase price as a down payment. That would be $67,032 for a $335,160 home — the typical home value in Wyoming.

However, you have options to lower your down payment amount.

Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).

But making a down payment of less than 20% comes with some risks.

First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.

Second, you may have to purchase mortgage insurance.

Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.

Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.

VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.

» READ MORE: Everything you need to know about low-income home loans

Wyoming down payment assistance programs

The state of Wyoming offers several down payment assistance (DPA) programs that can help you afford a home. If you're eligible, you can receive a grant or loan to cover closing costs or your down payment.

Here are a few DPA resources for Wyoming residents that you may qualify for:

WCDA Amortizing DPA

The Wyoming Community Development Authority (WCDA) offers homebuyers up to $10,000 through its Amortizing DPA program. This financial assistance comes as a fixed-rate second mortgage with a maximum term of 10 years.

Eligible participants must have a credit score of 620 or above and contribute at least $1,500 towards the down payment.

WCDA Home$tretch DPA

The WCDA Home$tretch DPA program can provide homebuyers with a loan of up to $10,000 with 0% interest. No monthly payments are required until the home is resold, refinanced, or the first mortgage is paid off.

To be eligible for this program, your credit score must be at least 620, and you'll need to contribute a minimum of $1,500 for the down payment.

Welcome Home Wyoming Program

The Welcome Home Wyoming Program offers several homebuying options, including the opportunity to receive up to 6% borrower assistance. Interested buyers must talk to a lender about their household income and credit score to see if they qualify.

U.S. Department of Housing and Urban Development

HUD’s list of alternative programs in Wyoming can be found here.

Step 2: Find a great real estate agent in Wyoming

Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Wyoming.

Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:

• Years of experience
• Number of transactions in the last year (the more the better!)
• Experience in your price range
• Overall review score
• Individual reviews and complaints

Step 3: Get preapproved for a mortgage

A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.

Most sellers in Wyoming will require preapproval before showing you their home.

You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Wyoming home.

Step 4: Choose the right location

Currently, the typical home value in Wyoming is $335,160, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!

Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.

To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Jackson:

Home value appreciation in Jackson

Step 5: Start house hunting in Wyoming

Searching for homes in Wyoming is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.

Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."

Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.

Look at current housing inventory

The timing of your house hunt in Wyoming can have a big impact on your number of options. For example, in Wyoming, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.

On the other hand, December gives you the fewest choices in Wyoming. Historically, there are 55.6% fewer homes for sale than during Wyoming's peak season.

Housing inventory in Wyoming by season

Step 6: Make an offer

Once you find a Wyoming house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Currently, in Wyoming, homes stay on the market for 89 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.

Historically, Wyoming homes sell fastest in July, where the average property is only on the market for 64 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.

On the other hand, if you buy in February, you have a bit more time to search. Homes typically stay on the market 33 days longer than Wyoming's annual average.

Average time homes spend on market in Wyoming

» LEARN MORE: What should an offer include?

Step 7: Inspections and appraisals

Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.

Home inspections in Wyoming

Having your Wyoming home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.

Your inspector should check out the following parts of the property:

• Roof
• Foundation
• Electrical system
• HVAC system
• Plumbing

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

Wyoming-specific inspections

Wyoming is known as a "buyer beware" state, so it's the buyer's responsibility to thoroughly check a home for potential hazards before closing. Although it isn't required, it's strongly recommended to complete more specialized inspections. These optional tests can reveal problems that can often go overlooked during a general inspection.

If you're buying a home in Wyoming, consider having these extra tests done:

• Radon testing: High levels of radon can pose serious health hazards. If the seller hasn’t had a test done within the past year, you're encouraged to get one completed as soon as possible. You can order a free radon test kit from the Wyoming Department of Health here.
• Pest inspection: Although getting a pest inspection isn't mandatory for every buyer, it's a good idea to get one before closing on a property. Termites and other pests can invade a home and cause major property damage long before residents notice the signs of an infestation.

Appraisals

Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

» LEARN: 3 options for buyers after a low appraisal

Step 8: Close on your new home!

On closing day in Wyoming, you'll meet at the title company to complete some paperwork and settle your closing costs.

Most homebuyers take about an hour to review and sign all of the required paperwork for their loan application and title transfer. Some of the most important documents will include:

• Your final loan application
• The deed
• The mortgage promissory note
• The disclosure statements

Read each page carefully to ensure that all of the information is correct. Any errors could potentially delay the title transfer process.

Once you complete the paperwork, you'll pay your closing costs to the title company. The company will take care of distributing the funds to the proper recipients.

As a homebuyer, your closing costs will cover four main categories:

• Lender fees: Fees that your mortgage lender charges for preparing your loan. Appraisal fees, survey fees, and other expenses associated with your loan may also be included in this payment.
• Title and escrow charges: Fees that the title company charges for conducting the title search and facilitating the closing process. Buyers and sellers generally split this cost.
• Prepaid costs: Ongoing costs of owning a home that are paid up front. Lenders often require new homeowners to pay for certain homeownership expenses in advance, such as property taxes and homeowners insurance.
• Other closing costs: Miscellaneous expenses that vary from buyer to buyer. A few common costs can include pest inspection fees and real estate attorney fees.

Buyers in Wyoming typically pay 3–5% of the purchase price in closing costs. For a $335,200 home — the typical home value in Wyoming — that's between $10,056 and $16,760!

Frequently asked questions

Related links

How to Find a Real Estate Agent That's Right for You

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Home Buyer Rebates: Get Cash Back When You Buy!

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The 20 Best House Buying Websites in 2023

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Real Estate Closing Costs: Find ALL the Fees You'll Pay

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The post Buying a House in Wyoming? Here Are 8 Steps Real Estate Experts Recommend appeared first on Semya-Moya.

Now that the housing market is finally calming down after the pandemic[1], buyers are facing a new challenge: Soaring mortgage rates.[2]

In Tennessee, the average 30-year fixed mortgage rate is 7.05% — up from 2021's historic lows. This raises the average monthly mortgage payment to $1,658 (assuming a 20% down payment at the median home value).

But buying a home in Tennessee is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.

In this guide, you’ll learn how to buy a house in Tennessee with confidence no matter what the market brings. Learn why you can trust our advice.

Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.

Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.

Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Semya-Moya. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!

Step 1: Save for a down payment

Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.

Typically, mortgage lenders in Tennessee want you to contribute 20% of the purchase price as a down payment. That would be $61,983 for a $309,913 home — the typical home value in Tennessee.

However, you have options to lower your down payment amount.

Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).

But making a down payment of less than 20% comes with some risks.

First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.

Second, you may have to purchase mortgage insurance.

Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.

Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.

VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.

» READ MORE: Everything you need to know about low-income home loans

Tennessee down payment assistance programs

If you're having trouble affording a home on your own, there are several down payment assistance (DPA) programs available to first-time and low-income buyers throughout the state of Tennessee. These programs provide eligible homebuyers with a grant or second mortgage to help cover closing costs or a down payment.

Here are a few DPA resources in Tennessee that you might be eligible for:

THDA Great Choice Plus

The Tennessee Housing Development Agency’s Great Choice Plus program offers financial assistance through a deferred option or an amortizing option.

The deferred option can provide you with a forgivable 30-year second mortgage of $6,000. This mortgage accrues no interest and payments are forgiven at the end of the 30-year term.

The amortizing option gives you a second mortgage of up to 6% of the home purchase price. This mortgage interest rate will be equal to the first mortgage rate, and it's to be paid monthly over a 15-year period.

The Housing Fund DPA Program

The Housing Fund offers DPA loans of up to $35,000 for eligible buyers throughout the state of Tennessee.

Participants must contribute at least 1% of the sales price, have a first mortgage from an FHA-approved lender, and complete a homebuyer education course. Household income and home purchase price limits apply and vary by county.

U.S. Department of Housing and Urban Development

HUD’s list of alternative DPA programs in Tennessee can be found here.

Step 2: Find a great real estate agent in Tennessee

Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Tennessee.

Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:

• Years of experience
• Number of transactions in the last year (the more the better!)
• Experience in your price range
• Overall review score
• Individual reviews and complaints

Step 3: Get preapproved for a mortgage

A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.

Most sellers in Tennessee will require preapproval before showing you their home.

You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Tennessee home.

Step 4: Choose the right location

Currently, the typical home value in Tennessee is $309,913, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!

Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.

To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Memphis:

Home value appreciation in Memphis

Step 5: Start house hunting in Tennessee

Searching for homes in Tennessee is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.

Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."

Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.

Look at current housing inventory

The timing of your house hunt in Tennessee can have a big impact on your number of options. For example, in Tennessee, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.

On the other hand, December gives you the fewest choices in Tennessee. Historically, there are 37.9% fewer homes for sale than during Tennessee's peak season.

Housing inventory in Tennessee by season

Step 6: Make an offer

Once you find a Tennessee house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Currently, in Tennessee, homes stay on the market for 59 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.

Historically, Tennessee homes sell fastest in June, where the average property is only on the market for 50 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.

On the other hand, if you buy in January, you have a bit more time to search. Homes typically stay on the market 15 days longer than Tennessee's annual average.

Average time homes spend on market in Tennessee

» LEARN MORE: What should an offer include?

Step 7: Inspections and appraisals

Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.

Home inspections in Tennessee

Having your Tennessee home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.

Your inspector should check out the following parts of the property:

• Roof
• Foundation
• Electrical system
• HVAC system
• Plumbing

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

Tennessee-specific inspections

Tennessee law requires sellers to inform buyers of all known issues with a property, but some problems can go undetected. To protect yourself from expensive repairs in the future, it's highly recommended to perform a few additional tests after the general home inspection to uncover all potential hazards.

Here are a few tests that you should consider doing before closing on a home:

• Radon testing: It's generally recommended to test homes regularly for elevated radon levels, so consider doing a test if the seller hasn't performed one within the past year. You can order a free radon test kit from the Tennessee Department of Environment and Conservation each January.
• Pest inspection: Pest inspections aren't required, but having one done now can save you from serious infestations and structural damage later. Termites and other pests can invade a home and go undetected by residents until they cause extensive damage. Get a thorough check from a professional to put your mind at ease.

Appraisals

Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

» LEARN: 3 options for buyers after a low appraisal

Step 8: Close on your new home!

Before you can become a Tennessee homeowner, you'll need to meet at the title company on closing day to complete your paperwork and settle your closing costs.

Prepare to spend about an hour reading and signing several legal documents, including:

• Your final loan application
• The deed
• The mortgage promissory note
• The disclosure statements

This paperwork needs to be completed accurately in order to transfer the title to your name. Take your time to make sure that all of the information is correct before signing anything. If you have any questions, your agent can help you out.

After you're done signing the documentation, you’ll pay the total amount you owe in closing costs to the title company. The company will take care of distributing the funds to the right recipients.

As a homebuyer, your closing costs can be separated into four general categories:

• Lender fees: Fees paid to your lender for preparing your loan. Other fees related to your loan, like appraisal fees or survey fees, may be added here as well.
• Title and escrow charges: Fees the title company charges for conducting the title search and facilitating the closing process. Buyers and sellers often split this cost.
• Prepaid costs: Ongoing costs of homeownership. Most mortgage lenders require buyers to pay for certain home expenses up front, such as property taxes and homeowners insurance.
• Other closing costs: Miscellaneous expenses that vary from buyer to buyer. A few common miscellaneous costs include natural disaster certification fees and real estate attorney fees.

Buyers in Tennessee typically pay 3–5% of the purchase price in closing costs. For a $309,900 home — the typical home value in Tennessee — that's between $9,297 and $15,495!

Frequently asked questions

Related links

How to Find a Real Estate Agent That's Right for You

This guide on how to find the best real estate agent is packed with useful tips and information, based on hundreds of hours of research and expert interviews.

Home Buyer Rebates: Get Cash Back When You Buy!

You can get cash back when you buy a home if you receive a home buyer rebate. We'll show you where they're available and how to get one on your next purchase!

The 20 Best House Buying Websites in 2023

We've compiled a list of the best house buying websites so you can quickly find ALL the properties for sale in your area. Jumpstart your home hunting journey today!

Redfin vs Zillow vs Trulia: Honestly, Which Is Best?

Comparing Redfin vs Zillow vs Trulia? We'll explain who has the most accurate home value estimates, the best real estate agents, and more.

Real Estate Closing Costs: Find ALL the Fees You'll Pay

Wondering who pays what when it comes to closing costs? Whether you are selling your home or buying a new one, we break down exactly what closing costs to expect.

The post How to Buy a House in Tennessee: 8 Steps Real Estate Experts Recommend appeared first on Semya-Moya.