The last two posts looked at the process of buying a home up to where you found the one you want. Now let’s discuss getting the keys to your new home.
Once you’ve found the right home, you need to know
1) whether the price they are asking is reasonable
2) whether the home will appraise at that price (so you can get your loan)
3) whether you want to trade-off some costs for some benefits
Your realtor will provide recent sales of similar properties to help with the first and second items. While the lender will have their own appraiser, recent sales will give you an idea of the value before you even make an offer. The third item is very much a personal decision.
If you like the home, you may want to accept certain conditions. For example, that the seller will need to stay in the home through the end of the school year. Or that the selling price will not include replacing the worn carpet. Or that it will be up to you to paint the home. In a competitive situation, these can be turned to your advantage. By offering to do any combination of these and other things, the seller may accept your offer over other offers.
As you know from previous posts, without financing you are unlikely to get the home you want. This not the only thing you need to focus on once your offer is accepted. The process of transferring ownership (known as escrow) involves a lot of paperwork. It is crucial that you deal with it when you receive it and not at some future date. The escrow company ensures that all aspects of the sale contract are met. They work with a title company to make sure you are buying the home from its true and legal owner. They also make sure that all taxes and fees have been paid. All of this is to assure the lender that the loan will be safely secured by the home.
The lender will be appraising the home to make sure the collateral (the home) is appropriate for the loan. They will also be checking your credit once again before releasing any funds. This is why previous posts mention the importance of keeping or improving your credit as you are completing the purchase. So avoid making any large purchases, such as furniture, until after escrow completes and you have the keys to your new home.
The final step in getting your new home is recording ownership with the county recorder’s office. This legally notifies everyone that you are the new owner of the home and that the previous owner no longer has a claim on it. At the same time this is happening, the escrow company has received funds from the lender to forward to the seller in exchange for the keys. When both these steps have been fulfilled, your realtor will have the keys to your new home.
Need someone to work with you every step of the way and help explain the paperwork and the process? I’m available and do this routinely for all my clients. Contact me at 760 622 5087 or email@example.com to get started.