The Process, Step-by-Step
The Initial Agreement and Deposit.
Lindsey & the team will let you know once you have an accepted contract. Once the contract has been accepted, Escrow will be opened and Lindsey’s team will email you with:
- a copy of the fully executed contract,
- a timeline of all stages of the process
- the amount need to send for your Earnest Money Deposit (EMD)
- a list of home inspectors
Escrow & Title.
The Escrow/Title company will hold the deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.
How to Hold Title.
You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder. NOTE: This can always be changed at a later date.
Once your offer is accepted by the seller, you will need to have a licensed property inspector inspect the property within the time frame that was agreed upon in the effective contract to purchase. Typically within 5-14 calendar days. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). If you are purchasing a commercial property, then you will need to have an environmental audit done on the site for the lending institution. We can recommend several different inspectors.
Depending on the outcome of these inspections, one of three things may happen:
1. Either the buyer has approved of the home inspection and no repairs were requested and the contingencies will be removed, bringing you one step closer to the close, or
2. The buyer, after reviewing the property and the papers, requests certain repairs on the home by a licensed technician or a credit in lieu of repairs.
3. Or the Buyer elects to cancel the transaction during their due diligence period and receive their Earnest Money Deposit (EMD) back.
Appraisal and Lending.
It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.
Homeowners Association (HOA/CIC).
If the property that you are purchasing is conditional upon an association, the rules, regulations, and other important documents will be delivered from the seller to you during the escrow period. You will have five (5) calendar days to review the CC&Rs and other documents to confirm you are OK with the HOA/CIC and their rules and regulations.
If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. If you are purchasing with CASH, it’s still a good idea to have property insurance. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance. You can also save money with these tips.
- Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
- Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts.
- Insure your house NOT the land under it. After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
We will be happy to recommend experienced knowledgeable insurance agents for every property type.