1. Select a Realtor/establish a relationship.
2. Initial consultation with your REALTOR to evaluate your needs and resources.
We will meet to discuss your needs and analyze your resources. Once we establish your needs, I will provide guidance to financial institutions where you can obtain information in order to get the best financing available.
3. Find the right home for you.
I will show you homes based upon the criteria that we have established together. The more precise and direct you are with me, the more successful our search will be.
4. Determine the seller’s motivation.
Once we have found the home that you wish to purchase, I will do the necessary research to help structure a successful offer.
5. Write the purchase offer.
I will draft the “purchase Agreement” for you, advising you on protective contingencies, customary practices, and local regulations. At this time you will need to provide an “earnest money” deposit, usually from 1% to 3% of the purchase price. The deposit check is not cashed until your offer has been accepted by the seller.
6. Present the offer.
I will present your offer to the seller and the seller’s agent. The sellers have three options; they can accept your offer, counter your offer, or reject your offer. My knowledge of your needs and qualifications will enable me to represent you in the best way possible.
7. Seller responds.
I will review the seller’s response with you. My negotiating skills and knowledge will benefit you in reaching a final agreement.
8. Open escrow.
When the purchase agreement is accepted and signed by all parties, I will open escrow for you. At this time your earnest money will be deposited. The escrow company will receive, hold and disburse all funds associated with your transaction.
Escrow : A procedure in which a third party acts as a stakeholder for both the buyer and the seller, carrying out both parties ’instructions and assuming responsibility for handling all the paperwork and distribution of funds
9. The contingency period.
This is the time allowed per your purchase agreement to obtain financing, perform inspections, and satisfy any other contingencies to which your purchase is subject.
Typical Contingencies include:
- Approval of the seller’s transfer disclosure statement.
- Approval of the preliminary report from the title company.
- Loan approval, including an appraisal of the property.
- Physical inspections of the property.
- Pest inspection and certification.
10. Obtain homeowner’s insurance
I will work with your insurance agent and escrow office to make sure your policy is in effect at the close of escrow.
11. Make down payment
You will need a cashier’s check or money transfer for the down payment several days prior to the closing date of escrow.
12. Close escrow!
When all of the conditions of the purchase agreement have been met, you will sign your loan documents and closing papers. You will deposit the balance of your down payment and closing costs into escrow and your lender will deposit the balance of the purchase price. The deed will then be recorded at the County Recorder’s office and you will take ownership of your new home!
The Inspection Process
When you make an offer on a home, your Purchase Contract will likely contain provisions allowing you various inspections of the property. The purpose of these inspections is to educate you as to the physical condition of the property you are purchasing. While these inspections do not provide guarantees of the condition of the property, they do provide valuable information to you as a Buyer. It is important to remember that your Purchase Contract may provide for withdrawal from the contract if these reports are unsatisfactory to you, but inspections should not be considered an open door to renegotiate the purchase price
Structural Pest Control Inspection
Often referred to as a "Termite Report," the Structural Pest Control Inspection is conducted by a licensed inspector. In addition to actual termite damage, the Pest Report will indicate any type of wood destroying organisms that may be present, including Fungi (sometimes called "dry rot"), which generally results from excessive moisture.
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Section I Conditions
Most Pest Reports classify conditions as Section 1 or Section 2 items. Section 1 conditions are those which are "active," or currently causing damage to the property. Generally, Section 1 items need to be corrected before a lender will make a loan on a home.
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Section II Conditions
Those which are not currently causing damage, but are likely to, if left unattended. A typical Section 2 item is a plumbing leak where the moisture has not yet caused fungus decay.
Who Pays?
Your Purchase Contract will specify who is responsible for the cost of the inspection and making these corrections. This is a negotiable item and should be considered carefully. I will advise you as to what is customary and prudent.
PHYSICAL INSPECTION
The Physical Inspection clause in your Purchase Contract, when initialed by both parties, allows you the right to have the property thoroughly inspected. This is usually done through a General Home Inspection. While Home Inspectors are not currently required to have a license, most are, or have been, General Contractors. The inspection and the resulting report provides an overall assessment of the present condition of the property.
What is Inspected
The Home Inspection covers items such as exterior siding, paint, flooring, appliances, water heater, furnace, electrical service, plumbing, and other visible features of the property. This is a general inspection and will often call for additional inspections by specific trades, such as roof and furnace inspections.
Further Inspections
If conditions warrant, the Home Inspector may recommend a Structural Engineer's Report. Such a report would identify structural failures and detail recommended corrections.
Who Pays?
Typically, this inspection is paid for by the Buyer.
Who Pays for What
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The SELLER can generally be expected
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The BUYER can generally be expected
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To pay for :
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To pay for:
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Real Estate Commission
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Title Insurance Premium
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Document preparation fee for Deed
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Escrow Fee
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Documentary transfer tax ($ 1.1 0 per
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Document preparation (if applicable)
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$1 000.00 of sales price)
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Notary Fees
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Any city Transfer/Conveyance Tax (according
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Recording charges for all documents in buyer's
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to contract)
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names
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Any loan fees required by buyer's lender
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Termite Inspection (according to contract)
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Payoff of all loans in seller's name (or existing
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Tax proration (from date of acquisition)
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loan balance if being assumed by buyer)
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Homeowner's transfer fee
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Interest accrued to lender being paid off,
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All new loan charges (except those required by
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Statement Fees, Reconveyance Fees and any
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lender for seller to pay)
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Prepayment Penalties
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Interest on new loan from date of funding to 30
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Termite Inspection (according to contract)
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days prior to first payment date
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Termite Work (according to contract)
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Assumption/Change of Records fees for takeover
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Home Warranty (according to contract)
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of
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Any judgments, tax liens, etc., against the
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existing loan
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seller
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Beneficiary Statement Fee for assumption of
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Tax proration (for any taxes unpaid at time of
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existing
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Transfer of title)
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loan
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Any unpaid Homeowner's dues
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Inspection Fees (roofing, property inspection,
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Recording charges to clear all documents of
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geological, etc.)
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record against seller
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Home Warranty (according to contract)
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Any bonds or assessments (according to
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City Transfer/Conveyance Tax (according to
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Contract)
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contract)
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Any and all delinquent taxes
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Fire Insurance Premium for first year
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Notary Fees
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Escrow Fee
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Title Insurance Premium
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The Life of an Escrow
- Buyer and Seller sign purchase and sale agreement
- Buyer places deposit
- Buyer or Seller's agent /broker opens escrow
- Escrow holder orders Preliminary Title Report from Title Company
- Escrow prepares instructions and documents
- Escrow holder and agent/broker review preliminary report
- Buyer and Seller sign and return escrow supplemental documents
- Escrow holder forward the "Statement of Identity" to title officer to clear title under General Index
- Escrow holder calls lender for Status and Conditions
- Escrow holder obtain loan approval, check terms, order loan documents
- Escrow holder reviews file and verifies all conditions have been met including : completion of termite reports, new insurance, homeowner's association information, data on liens, prepare additional documents if needed.
- Escrow holder receives loan documents
- Buyer's loan documents are signed and returned to escrow holder with remainder of funds.
- Escrow holder reviews buyer and seller file, verifying that documents are properly executed, notarized, and funds are good and all conditions have been met
- Escrow holder requests funds from lender
- Escrow holder and title company review the title insurance requirements
- Escrow holder receives funds from lender
- Record Deed, close file, prepare statements, disburse funds and prepare 1099 report.
