Disclosures & Documents
During the buying process, there will be many disclosures and documents for you to review. Brad will be an invaluable source of information during this process. The purpose of having you review and approve these documents is to ensure that you are fully informed about all the aspects of the property you are about to purchase.
Brad will make certain that the purchase agreement includes specific contingencies in order to protect your interests during the due diligence process. Such contingencies include but are not limited to: having a home inspection, review of disclosure documents from the seller, review of disclosure documents from the Home Owner’s Association, and a preliminary title search to ensure the seller has a right to sell and to define any unpaid liens on the property. You will normally be given 17 days to conduct your due diligence, during which time the escrow officer will prepare escrow instructions and assist in obtaining the preliminary title report. Brad will assist you throughout the due diligence process by explaining each document’s content and purpose.
California real estate law mandates that the seller must disclose what he knows about the property at the time of offer acceptance. This simple straight forward obligation is in place for the seller to disclose everything known in the way of defects or risks to the buyer. If the seller knows about it, it must be disclosed on the appropriate disclosure document.
One of the first steps to take is to arrange for a physical inspection of the property by a professional licensed home inspector. Brad will provide you with a list of inspectors from which to choose. The purpose of this inspection is to find out all that you can about the physical condition of the property and includes inspection and/or operation of such features as plumbing, electrical service, gas service, heating and cooling units, flooring, exterior, and roof. If possible, you will want to attend this inspection so that the home inspector can show you what he finds. Once the inspection is complete, you will be provided with a thorough written report, usually the next day. The inspector will list and describe any defects he finds, and provide photographs to illustrate the findings. If you cannot be present, the report will be emailed to you. Typically the cost of the inspection is paid by the buyer. Home inspection fees are generally in the range of $200 to $500, depending on the size and type of the property.
Occasionally, the inspector will recommend that you to call a specialist in a given category, such as roofing, heating/cooling, or pool, for further inspection.
California real estate law also requires a wood destroying pest inspection report be prepared for the property. If any evidence of termite activity is found, the pest control company will treat and certify the property as being free from termites prior to the close of escrow. This report will also indicate any other type of related issue that may that may be present. Your purchase contract will specify who is responsible for paying for the inspection, along with any repairs. Typically the seller will pay for this service. It is customary that they do so, but not mandatory. Armed with the inspection results and other seller disclosure documents, you can then decide what, if any, repairs/replacements or allowances you would like to request from the seller. The seller may agree to correct any specific issues you request, or they may offer you an allowance or may negotiate with you over certain items. When an agreement is reached in resolution of the issues, you proceed with the process. If an agreement cannot be reached, you could choose to cancel the offer and have your good faith deposit returned. Please note that sellers of short sales, foreclosures and REOs very seldom will pay for inspections or repairs. Distressed properties are almost always sold in “as is” condition.
If you are purchasing a property in a planned unit development or common interest subdivision, you will receive a copy of the Home Owner’s Association (HOA) documents. Make sure that you are familiar with all obligations, rules and costs associated with the community before you remove this contingency.
While not common, a buyer can hire a real estate attorney to examine all documents before he signs them. This would be only in an advisory capacity to the buyer and, it does not replace the escrow process. If an attorney is engaged he or she will review all documents before they are signed. Brad will provide a list of attorneys from which you can choose, if desired.
Also, the buyer may elect to order an independent appraisal and use acceptance of the appraisals property value as a contingency to the purchase. This is possible but not common.
Release Of Contingencies
Once you are satisfied with the results of the due diligence process (usually required to be accomplished in 17 calendar days), and you are fully informed as to the condition of the property, you can proceed with your purchase by signing the release of contingencies form. At this point in the process, you are committed to the purchase and may put your earnest money deposit at risk if, at a later date, you do not complete your purchase.
Transfer Of Funds
At least one day before the closing, the funds must be received into escrow in U.S. dollars. The money may be sent by wire transfer (or bank certified check) to the escrow officer. If a certified check is used, an extra day or two must be planned to allow time for the check to be processed and the required funds deposited in the escrow account in time to post. Personal checks are not acceptable. The escrow officer will help coordinate the transfer of funds.
The escrow officer will finish the process by recording the deed with the County of Riverside Recorder’s office. The entire purchase process from offer acceptance to closing typically takes 30 days to complete in a cash transaction – and 30-45 days to complete when the purchase is financed. You do not have to be present at the time escrow closes.
Get The Keys!
Once your deed is recorded, the transaction is complete. You will receive from escrow a set of the escrow documents. Brad will arrange to transfer the keys to you for your new desert home!
Before the close of escrow, you will want to make sure that you have purchased Home Owner’s Insurance for your new property, and that the policy will be in effect by your date of closing. Brad will assist you in finding an agent experienced in insuring Canadians and second homes.
Purchase Transaction Costs
As a rule, the average transaction cost of buying the property will be the purchase price of the property, plus approximately an additional 1-2% of the purchase price to cover escrow and purchase transaction expenses. Additional costs include the home inspection, which will average around $200 to $500, depending on the size of the property. These costs are estimates. If a lender is involved in your purchase transaction, additional lender fees will be included – the total lending cost will be identified by your lender, specific to your loan. Additional estimated expenses include prorated property taxes to complete the tax year, and prorated Home Owner’s Association fees, if applicable. Brad can provide you an estimate of your closing costs. Then, just prior to when your funds are required to be sent to escrow for closing, escrow will also provide you with the buyer’s estimated settlement statement.
Brad provides all his services to you the buyer at no cost. Brad will receive a commission for his services from the seller as a part of the seller’s selling expenses.