Contract to Closing Home Buying
Projections for 2015
- Rise in job creation
- Declining mortage rates
Step that is taken to complete the transaction
- Agency Relationship: The relationship of trust in which one person (the agent) represents another (the principal) in dealing with third parties, as authorized by the principal.
- Loan Application: Working with a local lender
- What is the interestrate?
- Down payment assistant programs
- California Homebuyer’s Down Payment Assistant Program (CHDAP)
- School Facility Fee Down Payment Assistant Program (SFF)
- Extra Credit Teacher Program (ECTP)
- Affordable Housing Partnership Program (AHPP)
- Funds that are needed for closing costs
- Some loans have “points”.
- Mortgage Insurance.
- Finding the Home
- Look for homes within your loan approval amount
- Keep an open mind
- Patience
- You’ll know it is the right home when you see it
Buyer’s biggest fear is the negotiation of their home purchase
- Making an Offer – Have a market analysis on the property before deciding what to offer.Length of time on the market, Inventory in the neighborhood, Curb appeal & Condition of the home are all part of the consideration.
- Deposit – 1% of the purchase price is standard but there are exceptions.
- Contingencies – A condition that must be satisfied before a contract is binding. For instance, a sales agreement may be contingent upon the Buyer obtaining financing.
- Counter Offer – Counter offers will state that the seller has accepted the buyer’s offer subject to particulars that might have beenin the offer or is in consideration of conditions.
- Examples could be – Higher price, increased the earnest money (deposit), not willing to pay for certain reports or fees, change title company, change closing date or possession date, exclude personal items, modify contingency time frames.Each time an offer is counter it is considered a new offer.
- Ratified Contract – All parties have come to agreeable terms.
- During the Transaction – Due Diligence– Inspections
- Disclosures about the property will be furnished and requires close review.
- It is imperative that you don’t wave inspections as this is one of the biggest investment that a person makes. Learning more about the property is in your best interest.
- If there are any need issues concerning repairs it will be written on a form called “Request for Repair” to be negotiate with the seller. What tends to be addressed are safety and health.
- Contingency Removal
- After 17 days of contingency for inspections and 21 days of loan contingency – providing that the property is acceptable, appraisal came in at value and the loan is ready to fund than all of the contingency will need to be removed
- Removing the contingency will be indicating that you are accepting the terms of the contract.
- The reason contingency are important is that the property is not held up any longer than the agreed terms of the contract as the seller is stop marketing the property during that time period.
- If there is any doubt about moving forward a cancellation can take place and the deposit will be refunded providing that communication took place during the transaction information the listing agent of known concerns.
- Homeowner’s Insurance / Utilities transferred / Mail Forwarded
- After the contingency has been removed all parties are working towardsthe close of escrow as a date has been established. At this point the home insurance company, utilities & post office has been notified of the date of ownership.
- Providing the utility company with advance notice will prevent having the power turned off as there is a charge for new service.
- Make plans to change the door locks.
- Appraisal/Loan Approval / Funding
- Once the loan is ready to fund the title company will schedule an appointment to sign documents on the loan and any other documents that were part of the contract.
- Attending the signing at the title company are the persons who names will be on the deed. Bring picture ID (driver’s license).
- After signing the documents will be heading back to the lender from the title company for final review before funding. As there are times the underwriter might verify employment, bank balances and to make sure there are no other conditions.
- Title company is had the County Assessor’s office record the new ownership of the property.
- The final walk-through
- This happens 3 day prior to the close of escrow.
- The purpose is to verify that the property is in the same condition as the day the offer was accepted
- What to avoid before closing escrow:
- Don’t leave town or stop communications.
- Don’t change employment.
- Don’t purchase any large items for the property.
- Don’t buy a car during escrow.
- Don’t pay your bills late.
- Don’t transfer/move bank accounts balances.
- Escrow is closed.
- The agent will meet you at the property to have you the key or you can pick up the key at the title company based on your needs.
- New homeowner.
- You might have a refund coming back from the title company.
- Title Company will be providing you with your signed documents.
- Filing for Homeowners’ Exception up to $7,000.00 of the assessed value of a dwelling, for those qualified. This is a saving of $70.00 per year on your property taxes. In order to qualify for the exemption you must either:
1. Own and occupy your principal residence as of January 1st of each year or
2. Intend to occupy a recently purchased or constructed residence within ninety (90) days after the purchase or completion of construction.
3. The form is available as the Assessor office or online.
- Keep the following records.
- Real Estate documents should be 3 – 6 years or as long as you own the property..
- Home Improvements receipts – until you are ready to sell your home.Good information to provide the new homeowner.