After all the back-and-forth on price and multiple offers, it’s finally over and your offer to purchase the home was accepted.
Now, the real work begins.
Granted, you and the seller are no longer front and center on the home purchase stage however, this is the point where real estate agents really earn their money and a good one proves that he or she is worth every penny.
Once you sign the purchase agreement I will return to my office, check it over for accuracy and ensure signatures and initials are in the proper places and then get going on all the time-sensitive duties.
Quite simply, escrow describes a holding of funds or other items by a neutral third party to a transaction until they are distributed according to the principal parties’ instructions.
In the typical residential real estate transaction, the principals include the seller, buyer and lender.
To open escrow, the agent or her transaction coordinator calls the escrow officer, typically employed by an escrow or title company, to arrange delivery of the purchase agreement and your good faith deposit. The Escrow Officer reviews the terms of the Agreement and orders the Preliminary Title Report and Natural Hazard Disclosure statement and directs the Buyer to wire their Good Faith Deposit.
This is the point at which the clock begins ticking toward the closing date specified in the purchase agreement.
By the way, California is an Escrow State. In non-escrow states, a real estate attorney handles these duties.
This is, in a nutshell, a search of the home’s chain of title (from the present owner back to the original owner).
The title company is looking for any encumbrances or problems with the home’s title, now or in the past. These can be loans, lines of credit, tax or other liens, easements, solar leases,…
It’s up to the seller to clear any problems or items that should not transfer to the Buyers. If he or she can’t or won’t, you can cancel your agreement to purchase the property.
Appraisal and Loan Process
While all of the above is happening, your lender will send out an appraiser to determine the value of the home and begin processing your loan. The primary purpose of the appraisal is to demonstrate to the Lender the value of the property that they should issue the loan for.
It’s important to return your lender’s phone calls and provide requested documents in the format requested as soon as possible. To submit a file for review it must be complete so all documents need to be complete.
The Home Inspection
We will arrange a home inspection based on the information provided by the Sellers in their disclosures. Take your time when reviewing the inspector’s report and get all of your questions answered.
Any adverse conditions revealed in this report, which may require repairs, can be considered to negotiate with the seller.
When we have completed our inspections, reviewed reports and disclosures and negotiated any repairs the next step is to remove the contingencies in the purchase agreement. Contingencies are events that must occur, according to the date listed in the contract, before the sale can close. Typical contingencies include:
- Inspections – repair issue that arise from the home inspection are typically open to negotiation between the sellers. If the seller refuses to remedy any concerns you have the right to cancel the contract with the full return of your earnest money deposit.
- The successful sale of your current home if part of the contract.
- Appraisal – if the home fails to appraise for the amount you are borrowing from the lender you can negotiate with the seller for a lower price, pay a larger down payment or walk away from the sale.
- Final loan approval – failure to obtain a loan will halt the deal.
Once the contract contingencies are removed you can still walk away from the deal but you will forfeit your earnest money deposit and possibly be liable for damages if your contract includes such a clause.
If you haven’t yet shopped for homeowners insurance, it’s time now to take care of it. Ask friends and family which broker they use, if they’re happy with the price they pay and the service they receive. You generally will need this information for your Loan Application so do this early.
Final Walk Through
You have one final chance to walk through the home to ensure that it is in the same condition (or better) as when you agreed to purchase it.
This is when we ascertain that all the agreed-upon repairs were performed and that no damage was done to the home during the seller’s move.
It is my practice to have the Seller provide any instructions for systems, preferred vendors or suppliers and useful tips.
Signing Final Documents
At the final signing you’ll sign a mountain of paperwork with the notary and make sure your closing funds have been wired to Escrow. When the Documents are signed and Escrow receives the loan and your funds they will order the Title Company to Record the Grant Deed and transfer Title to you!
Congratulations you will receive your keys!
For a free consultation about selling or buying your family home in Woodland Hills, Calabasas or West Hills CA please call me at (818)570-1144 email [email protected] or watch my videos on https://janeybishop.video/Empty-Nest-Downsizing-Playlist
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