The following is a reprint of my column that appeared in Frontiers In L.A. magazine on January 19th, 2011
The question I’ve spent the last two issues addressing is, what exactly does the process of buying a home look like? What should one expect? I’ve tried to really break it down for you in as much detail as possible while still keeping it somewhat brief.
8. Disclosures. In the last column, while on the subject of inspections and repairs, I briefly mentioned disclosures. The first week of the escrow period is also when you will receive, via your agent, a stack of state-mandated disclosures that the seller is required to provide (all on forms provided by California Association of Realtors) regarding the property. This is the seller’s opportunity to disclose to you anything and everything they know regarding the condition of the property, the neighborhood, the land, the structure itself—anything—that they know that might affect the salability of the property. Failure to disclose is one of the leading causes of lawsuits between buyers and sellers. When I’m working with sellers, especially on high-end properties, my advice is “when in doubt, disclose.” In other words, if you have to ask, just disclose it. By law, you as the buyer have three days after receiving any new information about the property to decide whether it’s acceptable to you before moving on.
9. Getting your loan approved. Over the next couple of weeks, your mortgage broker will be working furiously to get all of the required documentation from you in order to get your loan approved, and will send an appraiser to the property to make sure it’s worth at least what they’re lending on it. Don’t be surprised if the lender requires you to sign away your first-born child. It happens. Aside from being on standby for anything the lender needs, the next couple of weeks you’re basically in a holding pattern, beginning the fun stuff like making arrangements to move into your new home. On a side note, here’s a strong word of advice. Do not make the mistake of obligating yourself to be out of your current residence on the date you expect to close escrow on your new home. Delays can and will happen, and there is nothing more stressful than finding out two days before you are supposed to close that it’s been pushed back by a few days. Even worse is having a moving van scheduled for that day. Give yourself some leeway if at all possible.
10. Wrapping it up. It’s a few days before you are scheduled to close escrow. Your agent will schedule a final walk-through of the property with you, so that you have the opportunity to make sure everything is in the same condition it was when you agreed to purchase, and that any repairs the seller agreed to make have been completed. At this point, your loan should have been fully approved and your lender should have ordered loan docs. About two to three days before the scheduled close date, you will wire the remainder of your down payment and any other funds due. Typically, you will go to the escrow company’s office, where you will sign loan docs. This will entail signing your name about 800 million times. Depending on a few things, your loan should be funded by the lender the next day. The following business day, the property changes hands legally and officially, and that change is recorded with the county.
Congratulations. You just bought a home in 10 easy steps! If you think you might want to try this process out for yourself, give me a call and I’ll hold your hand the entire way. Likewise, if you or anyone you know is planning to sell a home, give me a call and let’s talk about how I can help.