The Seller just signed your offer. WooHoo! Time for the happy dance and a big high five! You are one step closer to weekend honey-do lists! But what now?
First, escrow will cash your check, so be sure the funds are in that account. No bounced checks, or I get cranky. You can also wire transfer your deposit directly to escrow, as well.
I will open escrow and set up the framework of the transaction with them. Escrow acts as the neutral third party who holds the money, collects the title report and all other reports, then records your deed when we are ready. They will email you three things.
- The Preliminary Title Report for some "light reading", showing everything that is recorded against the home currently.
- A Statement of Identity asking for personal details so they can separate judgments against you from other people with your same name.
- Info about tax withholding for the seller.
Next let's get your inspections lined up. I'll make the appointments after you tell me who you want to use. With luck, they will all be the same day. Possibilities include:
- Home Inspection - Mandatory! You can choose Uncle Harry, but I suggest a professional home inspector who will give the home the once-over, just like your family doctor. They are the GP of your home's health. If they find goobers, they may call for a specialist. ($300 - $500 typically)
- Roof Inspection - the Home Inspector will look at the roof, but we may want the specialist as well. (free, typically, including a bid for repairs needed to be able to certify against leakage)
- Chimney Inspection - (same comment as for roof) ($100 - $400, depending on cleaning and whether a camera is used)
- Sewer Scope or Septic Inspection- A plumber will actually send a tiny camera down the sewer line, clear to the sewer hookup (At least we hope he gets clear to the hookup. If not, you have blockage.) $125 - $175 usually.
- Pest Inspection - It used to be standard that the Seller provide a pest report and clearance, but all the foreclosure activity has change our customs on that one. Foreclosing banks typically make you do your own pest inspections. There are other reasons, as well, why you might want to get your own pest inspection. We'll talk...
Meanwhile get crackin on yor loan
. Since you are already pre-approved by your lender, they should have most of your information already. But stay on top of what else they ask for. They will need updated copies of bank statements and pay stubs, and may ask for letters of explanation on something. Don't dilly dally on any of their requests. You may be asked for money for the appraisal and the credit report, but nothing else. They will inundate you with forms to sign repeatedly. (At least four times you will say "But I already signed that." Guaranteed. At some point you will want to "lock your loan", which locks in your interest rate
Insurance. Get your new home owners insurance lined up. Once you ahve decided, give them your escrow contact number so they can chat.
Removal of Contingencies. Typically, you will have from 10 to 17 days to check everything out before deciding for sure to buy it. Up to that point, your deposit is returned to you if you cancel your contract. After you remove your contingencies, you will lose your deposit if you do not buy for any reason. During the contingency period, you will consider all info from:
- Inspection results (hopefully there are no broken beams in the attic)
- Seller Disclosures (were there any bombshells in the history of the home?)
- The neighbors (definitely get the scoop form the neighbors. And be sure your old high school girlfriend doesn't live next door...)
- Megans Law website (If you want to check for sex offenders)
- Permit issues (I cannot do that for you. You must call the County yourself, if you want to check on past permits)
- Preliminary Title Report (were there any weird easements or restrictions on the property?)
- Homeowners Association Documents, if applicable, including rules and their financial status.
- Mom and Dad - Yes, Mom, dad, coworkers, Uncle Harry and all your friends will have had an opinion on your new purchase. Get used to it! It ain't over.
If there are issues with the home, you can ask for repairs from the sellers on a Request For Repairs. Typically we stick to "Health and Safety" repairs, like electrical goobers, or faulty water heater installation. They may or may not say yes. It's all negotiable.
If there are no issues, or if the seller accepts your request for repairs, then you sign the Removal of Contingencies form, which throws down the gauntlet and says "Time to schedule my movers!!!!". Now you are committed, and we proceed to close the escrow, and get you your keys.
Final Loan Approval. This is the golden ticket we've been waiting for. This means the appraisal was "at value", and you are getting your loan. Now your lender will "proceed to doc draw", which means hack down a tree to prepare your loan documents, then send them to the escrow company.
Escrow Signing. Once your documents have arrived at escrow, you and I will meet there to sign them. You should know how you want to hold
title. Bring your drivers license for the notary. You will approve the exact amount of funds to close, then wire in (or bring a cashier's check) to the escrow officer for that amount, from an approved source. Once the seller has also signed, we "close", which in California means the escrow company takes your deed to the County Recorder who waves their wand on it, gives it a number, and YOU OWN YOUR HOUSE! I will meet you there to present your new key.
I know this sounds daunting, but I have done this hundreds and hundreds of times. I can make it work.