How to Protect Yourself When Buying a Home

How to Protect Yourself When Buying a Home

Almost everyone gets nervous when buying a new home, especially their first home. This is a normal experience considering how valuable of an asset a home can be. As a buyer, you do not want to overpay, or worse, get into unforeseen circumstances. So, here is how to protect yourself when buying a home.

How to Protect Yourself When Buying a Home

As a buyer, other than overpaying for a home, there are several unexpected factors that could cause you a lot of trouble. That is why it is important that you take certain measures to protect yourself and your home for years to come. Some of the risks include hidden liens, tax issues, mortgage issues, or even hidden structural issues.

Couple looking at the floor plan with their real estate agent

As a general rule of thumb, the best way to protect yourself is to be proactive throughout the period of the transaction up until closing. You should be actively involved as much as possible.

Here are a few tips to help you protect yourself when buying a home:

Get an Agent

Unless you are a real estate agent yourself and you have loads of free time on your hands, it is best to employ the services of a real estate agent to help you handle most of the transactions. Having your transaction handled by a real estate agent saves you from a lot of potential risks and helps sell your house faster.

This is because real estate agents are professional and are less likely to act based on emotions. They tend to have more experience and know things to watch out for. Real estate agents have a fiduciary duty to protect your interests. 

One common reason people avoid hiring an agent is to avoid the costs of commission. Agents charge about 3% to 6% of the closing costs. However, instead of boycotting real estate agents outrightly, it is best to hire flat fee agents like those at CA Flat Fee. When representing you as a buyer, commissions are typically paid out of seller proceeds and the seller determines how much to offer though this is always negotiable. If you are selling, you get full-service real estate for a flat $5,000 fee. 

Hire Other Experts

Aside from agents, you should also employ the services of other real estate experts to assist you with your transaction. Said experts could simply be home inspectors or professional appraisers. These professionals should protect you from any hitches. They should also keep you in the loop on any matters that may require your immediate attention or opinion. 

You could also consider hiring a real estate lawyer to help you with reviewing any legal documents and processes before you consent to them by signing. They would walk you through the rights available to you and the responsibilities you have to shoulder. They also come in handy with potential issues like unpaid property taxes and second liens.

Real estate agent shaking hands with buyer after a successful transaction

Do Not Overstretch Your Budget

It is not always advisable to max out your lending cap because it got pre-approved. It can be very tempting to max it out, especially in a competitive market. However, sometimes, you may be making a huge mistake. You tend to enter a bidding war with other buyers and eventually overbid for the property.

You may run into difficulties if the appraisal shows the house is worth less than you bid because your lender is less likely to approve the additional fund. You will then be forced to run around just to get the remainder. Ensure you constantly calculate the financial risk and the affordability of a house. Speak to your agent when in doubt.

Leverage Contingencies

When you make your offer on a home, you should consider including contingencies. Contingencies are simply things that must occur for you to move forward with a deal. If any of these contingencies are not fulfilled or not fulfilled to your satisfaction, you can always exit the transaction with your deposit in hand.

There are several contingencies that are available to you as a buyer. The most common ones are for financing, mortgage loans, title, HOA document review, and inspections. Take advantage of these contingencies and avoid removing them until you are satisfied. 

Keep in mind that if your offer includes too many contingencies, it may be too unattractive to the seller. So go with just the essentials or the contingencies you need to be comfortable about when buying the property.

Inspect the Home

Home inspections are an excellent way to protect yourself when buying a home. You should never skip inspecting a home before you purchase it. Hiring a well-experienced home inspector and pest inspector that is familiar with that neighborhood or environment is vital. They can save you a lot of trouble later on.

Realtor showing the house to a prospective client

They know the potential issues to watch out for. Some of these potential issues include repair issues, common electrical threats, utilities that needs to be fixed, and termite or carpenter ant damage. 

Do Your Due Diligence

Before you close on your purchase, you do your due diligence. This includes having the property’s history investigated by a title company to be sure the title transferred to you is not faulty. You should also obtain title insurance to protect you from any liens against the property. 

If you are interested in living near North Cucamonga, West Covina, Hacienda Heights, Rochester, Alta Loma, and Etiwanda, you may want to check out additional factors like the schools in the neighborhood, access to health care facilities, and any environmental issues that could affect you. You may want to consider public transit options and the availability of local grocery stores or clothing stores. 

Scrutinize the Seller’s Disclosures

You should get disclosure documents in your hands before closing. If you are not given them, ask for them. The seller typically includes anything that may be wrong with the house including physical or structural defects. This could range from fussy heaters to leaky windows or even unapproved improvements.

You scrutinize this thoroughly to ensure you understand what you are agreeing and that you are comfortable with them before moving forward. If the home has too many issues, you can pull out of the deal, this is one of the many reasons why some properties fail to sell. Ask the seller’s agent for clarification if you need any. Be wary of blank disclosures.

[lyte id=’nkia30I2i0Q’ /]


The real estate market can be somewhat difficult to navigate, especially as a newbie. By following these steps, you can protect yourself from most of the potential risks that come with home buying. With flat fee agents like CA Flat Fee, you get full advisory services while saving costs. 

Save Money On Your Home Today

Full Service One Flat Rate!

Call Orange County      : 760-388-9118

Call Los Angeles County  : 626-790-2250

Call Inland Empire          : 909-581-8364

Related Post

What Commission Does 72Sold Charge?

What Commission Does 72Sold Charge?

72Sold is an Arizona-based firm that promises to sell homes within 72 hours or 8 days. It is an attractive alternative for homeowners who want to quicken the home-selling process. According to 72Sold, homeowners don’t have to compromise on the selling price.  The homeowners often wonder if the 72Sold’s commission is much higher. In this article, you will learn about the commission that 72Sold charges to sell the home within 8 days.  72Sold’s Commission Structure The commission charged by 72Sold is comparable to what the traditional agents charge. The commission range is between 5% to 6% of the home’s final price. This rate covers both the listing agent’s fees and the buyer’s agent’s fee. This commission is split between these two parties. They get around 2.5% to 3% each.  Traditional Agents vs 72Sold Commission The commissions charged by the traditional agents are similar to 72Sold. Besides that the traditional agents may take some extra fees. They usually charge additional marketing costs for professional photography and staging. Also, the traditional agents may take  administrative fees that increase the overall cost. Flat Fee Agents vs 72Sold Commission Flat fee agents like Ca Flat Fee charge a fixed rate rather than a percentage of  the selling price. But the overall cost of flat fee agents can be similar to the commission structure of 72Sold. The flat fee agents take some additional charges for marketing and open houses. You should evaluate if the quick sell is justified to trade off against the fixed rate of flat fee agents. Hidden Fees  You have to pay the closing costs and some hidden fees regardless of the agent you select. The closing costs are escrow fees, transfer costs, and insurance. You also need to prepare your home to make your home appealing to the potential buyers. For that, you have to bear the repair and maintenance costs.  Alternatives to 72Sold Though 72Sold offers a faster selling process within 8 days, this commitment can’t be guaranteed. The homeowners can opt for other trusted options like traditional agents, flat fee agents, and discount real estate brokers. Homeowners can also sell the home on their own (FSBO).  The discount brokers charge 1% to 2% of the selling price. Homeowners who are cost-sensitive may find this alternative reasonable. But the discount brokers may offer fewer services and the level of service may vary.  Is 72Sold Worth It? Homeowners whose house is located in a demanding market may find the 72Sold as a perfect option. As they offer to sell homes within 8 days at a higher price, they attract many sellers. However, you will have to pay similar fees to the traditional agents and other alternatives. You may also miss opportunities to grab a higher price. You can surely boost up your earnings by comparing the real estate agents to choose the best one.  Conclusion  Homeowners who are looking for a faster home-selling option may opt for 72Sold to sell their house. They can also consider other options like the flat fee agents and traditional real estate agents.  For example- the flat fee agents can guarantee the highest possible sale price at a fixed commission rate. By evaluating the prominent platforms, sellers can pick the right option according to their priorities. 

How to Buy a House in California? 

How to Buy a House in California? 

In America, many people dream of buying a house in California- the Golden State. California offers the diversity of big cities like Los Angeles. Then again you can also enjoy the tranquility of Santa Barbara. But buying a house in California can be confusing, especially for first-time homebuyers. According to the California Association of Realtors (CAR), California’s median home price is expected to be $860,300 in 2024. So, you should know the appropriate process before deciding to invest. This article will guide you through the steps to buy a house in California.  5 Steps to Buy a House in California Financial Preparation At the very first step, assessing your financial situation is essential. Only then you can create a realistic budget. Home affordability calculators will assess your income, expenses, and debts and evaluate your mortgage payment ability. Houses in California are indeed expensive. But the cost varies with the location.  How Much Do You Need for a Down Payment in CA? The down payment amount can be up to 20% in CA. Also, it can be a minimum of 3% in the case of conventional loans. You can have the option to put less money down. For that, the lender may ask you to get private mortgage insurance. Home Buying Down Payment Assistance Programs in California Down payment assistance programs lessen your hurdles of managing a down payment. The programs are designed for first-time home buyers. Also, buyers whose income falls below the median income are eligible for the programs. The first-time homebuyers assistance programs in California are: CalHFA Forgivable Equity Builder Loan CalHFA’s Myhome Assistance and Zero Assistance Program (ZIP) California Dream for All Shared Appreciation Loan Although there are certain requirements to avail of these assistance programs. CalHFA requires a minimum credit score of 660 to 680.  Credit Score Requirement for a Home Loan You will need a credit score above 650 depending on the loans. To improve your credit score, you can review your credit report and check what goes against your favor. First, try to pay off all the balances every month. Besides that, limit requests for new credit and avoid defaulted accounts. Find out the Right Mortgage In this step of buying your house in California, you need to get a pre-approval for a mortgage. You can find the best lender by comparing the bank rates. Some of the best mortgage lenders in California are:  Veteran United Home Loans  Bethpage Federal Credit Union  Wells Fargo,  First Mortgage Direct New American Funding. The pre-approval shows the maximum amount the lender is willing to give you as a loan. It helps you to decide the price range of buying a house in California. The lender evaluates financial documents before giving pre-approval for a mortgage.  Mortgage Options in California  To compare the bank rates, you have to evaluate different mortgage options. Buyers should select mortgage options according to their eligibility and needs. Some of the mortgage options are:  Conventional home loans VA loans FHA loans Jumbo loans USDA loans House Hunting in the Right Neighborhood Finding the best house in your desired location requires some effort. First, you need to gain knowledge about the diverse housing market and consider an appropriate location. The living cost in California is quite high. So, your budget is a vital issue in selecting a location. But the living cost is a bit lower in many areas.  For example: the cost of living in Sacramento is less than in Los Angeles.  Now, it’s time to search for your dream home. A real estate agent will guide you through the search process. Their expertise in the local real estate market will help you to compare the offers. Thus, you can pick the best house according to your budget.   You can find properties with your desired needs on the property search sites. Check the listing websites with the latest and comprehensive information. Plan your visit carefully when you are visiting open houses. It’s always better to prepare necessary questions beforehand. Look beyond the staging and take your agent with you. Then check the neighborhood well.  Make an Offer and Negotiate to Buy CA Home The next step to buy a house in California is making the offer. The offer price, contingencies, and proposed closing date are written in the proposal. Your real estate agent will help to negotiate efficiently. The offer price should be competitive but realistic.  The offer may include an earnest money deposit. It is usually 2% of the purchase price. It is paid to make the house off-market before closing as an incentive to the seller. The earnest money is adjusted with the down payment later.  Closing  You can proceed with closing when the offer is accepted by both parties. Make sure to get done with the home inspection appraisal process. If all goes well, you can close the deal. In this step, you have to pay all the closing costs.  Closing Costs of Buying a House in California The closing cost of buying a house in CA is 2% to 5% of the purchasing price. Some of the closing costs are loan organization fees, agent fees, appraisal fees, and title search fees. Escrow Process to Buy a California House Escrow agents handle the transactions of the buyers and sellers. They ensure the security of transactions. The buyer deposits the funds in the escrow account. Here both parties submit essential documents to the agent. The money is released once all the contingencies of both parties are met. The agent closes the escrow account after the transfer of ownership.  The Final Walkthrough and Closing  You are now at the final stage of buying a house in California. Schedule your final walkthrough to check the property’s  condition before signing the papers. The appliances should work properly and the seller should complete any agreed-upon repair.  Finally, you have to sign tons of documents to close the deal. Some of the documents are title transfer, final loan application, and deed. You may find it difficult … Read more

Selling Your House with a Mortgage in USA

Selling Your House with a Mortgage in USA

They say that buying a house is one of the most stressful experiences in life you’ll ever encounter, and while that may indeed be the case, there isn’t enough talk about the hardships associated with selling a house, especially one with a mortgage.   Despite the endless paperwork associated with selling a mortgaged property, we’ve lately seen a sharp increase in the amounts of homeowners selling their homes, despite them still being mortgaged.   Those looking to sell house with mortgage USA may wonder where they stand legally, and indeed, how easy selling a house with an outstanding loan actually is. Can you sell a house with a mortgage, and if so, just how easy is it? Well, the truth is that, despite there being several steps to sell a house with a mortgage, doing so is surprisingly easy, and very common.   Here is a quick overview for those looking to sell a house with a mortgage USA, and several key facts to understand.   Can You Sell a House with a Mortgage?   The simple answer is yes you can.   If you’re looking to sell a mortgaged property, you are perfectly within your rights to do so. In fact, doing so is extremely common.   Statistically, the average US homeowner stays in their home for 13 years. Typically they pay off their outstanding mortgage on the property by selling it. Providing you have enough equity to pay off the mortgage in full when the deal closes, there’s nothing stopping you from selling a house with an outstanding loan, I.E a mortgage.   Benefits of Selling a Mortgaged House   Despite being perfectly legal and common, some of us may be wondering whether it’s the right decision to selling a house with a mortgage.   Here are a few benefits associated with selling a house with a mortgage.   You can use profit from selling a mortgaged house to put toward your next property. If you are downsizing, you can keep the profits once your previous mortgage has been paid off. If you’re upsizing, you can use profit from selling a mortgaged house to put toward a down payment.   What Happens to My Mortgage When I Sell My House?   In a typical home sale, unless the real estate market is going through a very bad patch, you should be able to sell your property for more than you owe on your mortgage.   By paying off your mortgage over the years, you will have accrued equity in your home. This can then be cashed in on once you sell up.   When a house sale closes, between the mortgage loan and the down payment, the buyer will provide the funds at the settlement that are equal to the sale price of your home. You can then use these funds to pay off any equity loans, closing costs such as agent fees ETC, and of course, the outstanding mortgage balance.   Can I Sell my House If I Owe More Than It’s Worth? (Underwater Mortgage)   Selling underwater mortgage house issues are also fairly common in the real estate world. Put simply, an underwater mortgage is when the mortgage is worth more than the property is worth, meaning you have negative equity. If for example, you paid over the odds for the property, or simply bought before the property market tanked, you could find yourself with what is known as an underwater mortgage. Can you still sell, but it’s important to know your options.   First off, you could pay off any outstanding payments yourself, from your own savings or investments. This is obviously far from ideal, but it will help protect your credit rating. Another option would simply be to put the house sale on hold and wait for real estate prices to increase.   The third option is a short sale. This means that your mortgage lender must provide permission for the house to be sold for less you owe on your mortgage. The lender has the final say over which offer to accept or reject. This will, however, negatively impact your credit score.   How Much Equity Do I Need to Sell My House?   In truth, there is no clearcut answer to this question because it depends on a number of factors and circumstances.   A general rule of thumb, however, is that you should aim for around 15% if you wish to upsize, or 10% if you’re simply looking to relocate and purchase a similar-sized property.   What Are the Closing Costs for Selling a House with a Mortgage?   As far as closing costs when selling with a mortgage, again, there is no clear and concise answer to what they will be because each sale will be different. As a general guide, expect closing costs of between 2% and 6% of the total mortgage loan amount.   How Long Does It Take to Sell a House with a Mortgage?   How long is a piece of string? The simple fact of the matter is that we can’t give you a precise answer to this question because there isn’t one. You could list a mortgaged house for sale and find that it sells in less than 7 days, or it could take months, or even remain on the market for years.   Statistically however, as of March 2023, it took on average 54 days to find a buyer. Does this mean that your house will sell in that duration of time? Absolutely not. It could sell much quicker, or it could take much longer. It should be noted that, as soon as the Fed begins implementing the projected three interest rate cuts later in 2024, property sales should start speeding up.