Homebuyers Guide

Homebuyers Guide

The

HOME BUYERS GUIDE

You’ve found your agent, searched dozens of homes, put in offers, and now you’ve found “the one”, now whats next?

We have outlined the financial steps and stages you will travel through during your home buying experience.

Our team, along side with your Portiera Agent, will bring a plethora of technology, valuable tools, resources and years of experience to the table for an easy guide through the completion of your transaction.

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.
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Course of Events

IN ESCROW

WE ARE COUNTING 17 DAYS FROM THE DAY AND HOUR OF ACCEPTANCE OF THE OFFER AS OUR STARTING DAY FOR OUR DUE DILIGENCE.

  • I will set an appointment with an inspector to do the inspection.
  • We will all receive (including you) copy of the inspection report to review.
  • You and me will go over all the details and if needed draw a “request for repairs” for you to sign.
  • I will present this request of repairs to the seller.
  • You will need to provide a “proof of funding” for the funds necessary to the close of escrow ( a letter from your bank or something showing that you have the money to close)
  • The seller will have to accept or not our request for repairs and there might be some more negotiating there to do.
  • The seller will order a termite inspection and we will be a advised on the results and receive a copy of the report. The seller is responsible to “fix” problems as per our Wood Destroying & Pest Inspection addendum.
  • You will be receiving a Natural Hazard Disclosure (mainly covering and disclosing the earthquake issue, fire hazard and other local area disclosure.)
  • You and me will be receiving a “preliminary title report” disclosing any problems with the deed or any lien if there is.
  • You will be receiving a set of documents for you to sign all disclosures and I will help you go through.
  • You will be receiving a full set of Home Owners Association (CC&R’s) covering all the covenants of the community.
  • The seller will be ordering a Home Owner Warranty covering one year for all appliances including air conditioning and pool if relevant as per the offer.

ON OR BEFORE THE 17TH DAY YOU WILL BE ASKED TO SIGN A “REMOVAL OF CONTINGENCIES” CONFIRMING THE FACT THAT YOU ARE “IN” AND COMMITTED TO CLOSE ESCROW. IF YOU BACK OUT ANYTIME AFTER THAT YOU WILL LOSE YOUR DEPOSIT, EXCEPT IF WE HAVE A LOAN CONTINGENCY UNTIL FUNDING. THIS WOULD BE THE ONLY CONTINGENCY REMAINING.

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The

INSPECTION PROCESS

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.

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.

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.

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..

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.

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.

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.

If conditions warrant, the Home Inspector may recommend a Structural Engineer’s Report. Such a report would identify structural failures and detail recommended corrections.

Typically, this inspection is paid for by the Buyer.

A close up and high angle view of a professional male wearing blue t-shirt, writing out forms during a home inspection, standing on stairs with copy-space.

Who Pays

FOR WHAT?

THE SELLER CAN GENERALLY BE EXPECTED TO PAY FOR:

  • Real Estate Commission
  • Document preparation fee for Deed
  • Documentary transfer tax ($ 1.10 per $1,000.00 of sales price)
  • Any city Transfer/Conveyance Tax (according to contract)
  • Any loan fees required by buyer’s lender
  • Payoff of all loans in seller’s name (or existing loan balance if being assumed by buyer)
  • Interest accrued to lender being paid
  • Statement Fees, Reconveyance Fees and any Prepayment Penalties
  • Termite Inspection (according to contract)
  • Termite Work (according to contract)
  • Home Warranty (according to contract)
  • Any judgments, tax liens, etc., against the seller
  • Tax proration (for any taxes unpaid at Transfer of Titler)
  • Any unpaid Homeowner’s dues
  • Recording charges to clear all record against seller
  • Any bonds or assessments (according to contract)
  • Any and all delinquent taxes
  • Notary Fees
  • Escrow Fee
  • Title Insurance Premium

THE BUYER CAN GENERALLY BE EXPECTED TO PAY FOR:

  • Title Insurance Premium
  • Escrow Fee
  • Notary Fees
  • Document preparation (if applicable)
  • Recording charges for all documents in buyer(s) names (according to contract)
  • Homeowner’s transfer fee
  • All new loan charges (except those required by lender for seller to pay)
  • Tax proration (from date of acquisition)
  • Interest on new loan from date of funding to 30 days prior the first payment date
  • Assumption/Change of Records fees for takeover of existing loan
  • Beneficiary Statement Fee for existing loan
  • Inspection Fees (roofing, property inspection, geological, etc.)
  • Home Warranty (according to contract)
  • City Transfer/Conveyance Tax (according to contract)
  • Fire Insurance Premium for first year
  • CC&r’s book (even if the escrow does not close)

YOURS OR THEIRS

THE PERSONAL VS. REAL PROPERTY DILEMMA
The distinction between personal property and real property can be the source of difficulties in a real estate transaction. A purchase contract is normally written to include all real property; that is, all aspects of the property that are fastened down or an integral part of the structure. For example, this would include light fixtures, drapery rods, attached mirrors, trees and shrubs in the ground. It would not include potted plants, free-standing refrigerators, washer/dryers, microwaves, bookcases, swag lamps, etc.

If there is any uncertainty whether an item is included in the sale or not, it is best to be sure that the particular item is mentioned in the purchase agreement as being included or excluded.

Glossary of

TERMS

COMING SOON

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