What You Need to Know When Purchasing a Home

0V7A0504What is Essential and What Would Be Nice to Have in Your New Home

Create a ‘Wish List” of your ‘needs’ and ‘wants’.  Print it and take it with you so that you don’t forget the items that are important to you.

Are You Going to Finance The Purchase of Your Home?

If you want to purchase the home with a mortgage, the smartest thing you can do is get Pre-Approved.  That means you work with a lender so that you know exactly what price you will be able to pay for a home and what your monthly payments will be. That way there will be no surprises.

Ask me for recommendations for trusted loan officers.

Home Inspections

A standard pre-purchase inspection covers a home’s major mechanical systems- electrical, plumbing, heating and cooling – and its construction from roof to foundation, exterior to interior. Overall inspections do not cover soil, pools, wells, septic systems, building code violations or environmental hazards such as lead. The inspections cost several hundred dollars.

Specialized inspections usually involve an expert and can cost more. Remember repairs or remedies are negotiable; they also can derail a deal.

Home Warranty

Home warranties offer advantages to both buyer and seller. This policy protects the Buyer by paying for certain repairs and costs of major mechanical systems and major appliances in the home such as heating and air conditioning. There are a variety of plans available; I can give you information on the options, costs and providers in our areas.

Benefits of Home Warranty coverage to the Seller

  • Home may sell faster and at a higher price
  • Optional coverage during the listing period
  • Protection from legal disputes that occur after the sale
  • Increases the marketability of your home

Benefits of Home Warranty to the Buyer

  • Warranty coverage for your major systems and built in appliances
  • Protects your cash flow
  • Puts a complete network of qualified service technicians at your service
  • Low deductible

Who Pays What?

The Seller Will Generally Be Expected to Pay For:

  • Real Estate Commission
  • Title and Escrow Fees
  • Document preparation fee for Deed
  • Document recording charges that effect the seller
  • County Transfer Tax. This varies with county and city
  • Any loan fees required by buyer’s lender
  • Notary fees – Sellers Documents
  • Termite inspection and repairs according to contract
  • Any city transfer/reconveyance tax
  • Special delivery/courier fees
  • Payoff of all loans in seller’s name
  • Interest accrued to old lender, Statement Fees, Reconveyance Fees and any prepayment penalties
  • Homeowner’s association transfer fee and prorate dues (negotiable)
  • Bonds of assessments according to contract
  • Home warranty according to the contract
  • All delinquent taxes
  • Any judgments, tax liens, etc. against the seller
  • Tax proration
  • Recording charges to clear all documents of record against seller

The Buyer Will Generally Be Expected to Pay For:

  • Title insurance premium covering loan policy (ALTA)
  • Notary Fees – Buyer Documents
  • Document preparation fees – Buyer Documents
  • Tax proration
  • Inspection fees (roofing, geological, property, etc.)
  • Homeowner’s transfer fees
  • Special delivery/courier fees
  • All new loan charges (except those required by the lender for the seller to pay)
  • Interest on new loan from date of funding to 30 days prior to first payment date
  • Fire insurance premium for the first year
  • City transfer/reconveyance tax according to the contract
  • Preliminary change of ownership fee
  • Assumption/change of records fees for takeover of existing loan
  • Beneficiary statement fee for assumption of existing loan
  • Other proration if applicable

The above items are negotiable between buyer and seller, as agreed upon in your individual sales contract. This is for informational purposes only and reflects typical charges.

Who Does What?

Lender and/or Mortgage Broker

  • Defines loan amount for borrower
  • Qualifies borrower
  • Orders appraisal on subject property
  • Submit borrower’s information to underwriter for approval
  • Orders loan documents to be sent to escrow for borrowers’ signature
  • Documents returned to underwriter for final inspection (correct signatures/dates)
  • Funds (loan amount) ordered sent to escrow trust account for agreed to disbursement by escrow officer
  • Escrow records documents from seller to buyer’s name and Deeds of Trust for Lender
  • Escrow usually takes 30-60 days of which 3 weeks is the average loan process time at this time

Escrow Officer

  • Coordinates all principals of purchase and sales contract
  • Orders preliminary Title Report on subject property to confirm legal information on subject property, owners of record, current taxes, deed/lien information and CC&R’s of record
  • Makes certain that all “conditions” are met as per instructions, agreed to by Buyer and Seller
  • Coordinates all information between both agents, title department, lender and inspectors, etc.
  • Gathers all documentation regarding new and old loans, inspection reports, repairs and title requirements, etc.
  • Arranges for buyer and seller to sign all Escrow and Title papers
  • Record all documents required to transfer title from seller to buyer including a Grant Deed, Deed of Reconveyance and Trust Deeds
  • Disburses all funds necessary for old loan payoff, inspections, demands of payments for repairs, etc.
  • Arranges for seller to receive proceeds of sale

Buyers Agent

  • Represents buyer with purchase of property, loan and escrow process
  • Helps buyer locate lender who tells buyer the price of property they qualify to buy
  • Helps buyer find suitable property
  • Advises buyer and helps negotiate the price and term through seller’s agent
  • Reviews all property information from Preliminary Title Reports. liens.
  • Coordinates all information between buyer, lender, escrow, inspections and other agent
  • Guides buyer through process, loan, required insurance, escrow and closing
  • Takes buyer on “walk through” inspection of property to note any problems that need to addressed during escrow period
  • Arranges to meet with any inspectors or property (with or without buyer present)
  • Usually accompanies buyer to escrow for loan and escrow signing
  • Delivers all keys to property after the property records from seller to buyer

Sellers Agent

  • Represents seller of property
  • Orders property profile from title company to determine ownership, liens, legal description, square footage, bedrooms, baths, roof, heat/air, or special amenities such as a pool, workshop, etc.
  • Does market research and tells seller the market value of property from recent sales
  • Lists property on Multiple Listing Service, reaching almost every Realtor® in the community
  • Markets to Realtors®, advertises, holds open houses, introduces to Multiple Listing Service
  • Oversees necessary repairs of property and maintenance during listing period
  • Negotiates price and terms of purchase contract with buyer’s agent on behalf of the seller
  • Opens escrow with the title company
  • Coordinates and disseminates information between buyers’ agent, seller, escrow, property inspections and any other involved in sale
  • Oversees inspections and any other repairs agreed to in contract
  • Usually meets with seller to sign escrow/loan documents
  • Arranges pickup and deliver all keys to property and instructional information on any equipment, warranties, etc.

Submitting an Offer When We Find the Home You Love

Now is the time when we sit down and I show you the ‘comps’ (what other homes like the one you have chosen have sold for in the past few months). After discussing all the ramifications of making an offer to purchase, we get to work determining the price and terms and writing that up on a Purchase Contract.

  • The Purchase Contract will include:
  • Price Offered
  • Down Payment Amount
  • Earnest Money Deposit
  • The Dates for Closing the Escrow
  • How Many Days the Buyer has to Complete:
    • Property Inspection
    • Appraisal
    • Loan Completion

There may be counter offers that I will need to negotiate too.

Once the offer has been accepted by both you and the seller, and your inspections and loan process is complete, we will schedule a final walk through the home about 24 hours before we will meet at the Title and Escrow office to sign the final documents.

Once the paperwork is recorded with the county, the home is yours – and this is one of my favorite parts of my job – I give you the keys to your new home.  Welcome Home!

 

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