The Purchase Process
- Buying a home in California is a complex process and there are many potential pitfalls. Fortunately, with my help, you can relax and allow yourself to be guided through the following stages in order to achieve a successful transaction.
- Having decided that you want to buy a home, the first step in the process is to determine what price home you can buy and that will be determined to some extent by how much a lender is prepared to advance to you based on your personal circumstances. It is very important that you get pre-approved for financing so you know what kind of home you can afford to buy. I can introduce you to a reliable and reputable mortgage specialist if you don’t already have one.
- Having figured out how much you are prepared to spend on a home, you will probably view quite a number before finding one where you want to make an offer. Once you get to that point, I will investigate what prices comparable homes have sold for over the past few months and advise you on how to structure an offer that has the best chance of being accepted. I will write up the offer for you and submit it to the listing agent, together with a copy of a pre-approval letter from your lender. At this stage, you will also have given me an “earnest money” deposit check which will typically be around 1% of the proposed purchase price, rounded to the nearest $5,000. This is held by me, un-cashed, until your offer is accepted. You can expect to receive a response from the seller within 24 hours, and this may be an acceptance or a counter-offer or a rejection. Sometimes there are a number of counter-offers from both seller and buyer before agreement is reached.
- Once a price has been agreed, I will open an escrow account with the Title Company and provide them with all the details of the transaction and your deposit check, which will be paid into the escrow account.
- The Purchase Contract specifies the timeline within which the various disclosures have to be provided by the seller and also how long you have to complete your investigations prior to removal of all contingencies.
- There are a number of disclosures that a seller is required to provide and I will ensure that you read and understand these. In addition, you will normally want to have a number of physical inspections carried out. The minimum will typically be a Home Inspection but additional inspections such as a termite inspection, roof inspection and chimney inspection are common. Sometimes even a drainage inspection or foundation inspection, particularly if suggested by the home inspector, and also a pool inspection when there is a swimming pool. I will arrange all the inspections for you and I will also be present when they are carried out.
- The inspections may raise some points of concern and at their conclusion, this is when you need to confirm that you intend to continue with the purchase, and remove all contingencies. Sometimes, you will want to request that the seller complete some repairs as a result of the inspections, or credit you with a dollar amount so that you can take any necessary action after the transaction has been completed.
- In most cases, when I write an offer for you, it will require the seller to have a Termite Inspection carried out at his expense, and in the event that there are any “Section 1” items identified (areas where the structure of the home may be compromised), then the seller should agree to have any necessary repairs carried out.
- Simultaneously with your inspections taking place, your lender will have arranged for an Appraisal to be carried out. Provided that the home appraises at full price (which it should do), your lender will commit to financing the purchase. If it fails to appraise at full price, you may want either withdraw from the contract or renegotiate the price.
- Your lender raises all the necessary documents for the loan and provides them to the Title Company. At that point, I will make an appointment for you to go to the Title Company to sign all the paperwork required to complete the transaction. The Title Company then arranges for the lender to wire the funds into the escrow account a day before the scheduled close of escrow. You need to ensure that you have the balance of the down payment in the escrow account at the same time, either by providing a cashier’s check or by wiring the money direct. The Title Company then records the closing of the transaction and you can take possession of your new home.
It sounds like a complicated process and it is but you really do not need to be overly concerned by it. I have many years experience in helping people to buy homes and with me guiding you every step of the way, you should find the process to be painless and stress-free. If you have any questions, please do not hesitate to send an email or call me on my Cell 510 376-4447.