Home BuyERS
Paperwork and more paperwork seems to be the name of the home buying game. After providing all the documentation that a lender requests to assure that you are a worthy loan candidate, they will determine your pre-approved mortgage amount. Now, it’s time to find the home of your dreams!
Choosing a realtor to assist you may be the best option. However, it doesn’t matter if you use a specific realtor or go rogue and strike out on your own to view homes that appeal to you. The seller’s realtor is always willing to work on your behalf as well.
When you find your new home, and the buyer has accepted your offer, the first step in purchasing your home is completing the sales contract.
Sales Contract
This document also referred to as the purchase agreement, is a legally-binding contract that sets forth the terms and conditions of the sale. The California Association of Realtors’ “Residential Purchase Agreement and Joint Escrow Instructions” form is the document by which most California home sales are founded. This agreement covers the offer to purchase, the sales contract and lists instructions to the agent or attorney managing the escrow. This agreement will also contain any conditions that need to be met before closing. Inspections, disclosures, and financing would fall under those conditions.
Home Inspection
It is wise to get a home inspection done before closing on the property. A home inspector looks for “hidden” issues that can be undetected but can cause significant issues in the future. Your lender may require a home inspection. They may even have a preferred inspector.
Appraisal
An appraisal to determine the property value is something your lender will want in hand before the close.
Title Documents
A clear title is a big deal in a real estate transfer. Title insurance for the buyer ascertains that the seller has no remaining or unknown liens against the property that could arise at some point after closing. Some title problems that could surface include errors and omissions in the deed, mistakes in the title search, forgery, or undisclosed heirs. At the close of escrow, your title company records the grant deed. It transfers ownership from seller to buyer.
Disclosures
The state of California requires that the seller provides certain disclosures to the buyer. Any readily known defects, as in leaks, a neighborhood nuisance, or a natural or environmental hazard located nearby. The seller also must make known whether someone has died inside the property within the last three years. A lead-based paint disclosure would be given to you should the home have been built before 1978. You will have ten days to inspect the home for lead if you choose to do so.
Loan Documents
All the required documentation for obtaining a loan with your lender listed above will be on file before closing. Your lender will receive a copy of the sales contract and any documentation of counteroffers at closing. They will receive a copy of the title search and escrow instructions that underwrite your loan. At closing, you will be required to sign a promissory note for the balance of the loan. A deed of trust which ties the repayment of the mortgage amount to the home’s title is also signed.
The deed of trust is the document that allows the lender to foreclose if you fail to meet the requirements to repay the loan.
