Closing the deal
Once we have met to discuss your home needs, become pre-qualified, and found the just the right home, you’re ready for the final steps to formalize the home purchase transaction and guide it to escrow and closing:
• Making an offer and reaching Mutual Acceptance
• Having the home inspected and reading the seller’s Form 17
• Gaining final loan approval
• Obtaining a title commitment for the home
Make the offer:
Once you’ve settled on the home you want to buy, we help you determine the price to offer by analyzing recent sales of comparable homes. We will prepare the offer for you, a legal contract, and help you understand the most common contingencies that go with this agreement. There may be a counter-offer from the seller, which turns down your agreement and offers you something similar with modifications by the seller. After negotiations, when both seller and buyer agree to all terms and conditions of the contract, the resultant agreement is known as ‘Mutual Acceptance’.
Home inspection and Form 17:
After Mutual Acceptance, the next step is to have a structural inspection of the home. A licensed inspector examines the major systems for functionality and safety and prepares a detailed report with photos. You need not be present for an inspection, but most inspectors welcome the opportunity to meet with clients on-site at the conclusion of the inspection, and it is usually necessary to pay the inspector at the time the inspection is done. The Inspection portion of your Purchase Agreement gives you an optional three days after Mutual Acceptance to explore your new home’s neighborhood and assure yourself you like the new environs. You will also receive a “Form 17 Property Disclosure Form” that informs you of anything that the seller knows about the property that a buyer might believe would lower their perception of value; you will have three days to review this six-page questionnaire to determine if it holds anything to give you cause to reject the purchase of the home.
A typical ten-day period follows Mutual Acceptance, during which you engage the inspector to determine if there are any repairs you want to request the seller to make. If there are, you request these desired repairs and negotiate them before the contingency period expires. If you decide no repairs or alterations are needed, you then “waive” the inspection contingency to remove it from the purchase process.
Final Loan Approval:
The lender to whom you’ve applied for a mortgage loan will arrange for an appraisal of the home you’ve selected. A professional appraiser will examine the home closely and provide a written assessment of the home’s dollar value in today’s market. The mortgage lender uses the appraised value of the home to substantiate the amount of money you want to borrow. When the lender returns their preliminary approval, I will guide you through any conditions listed in it that must be met. Conditions are often requests for additional information or further documentation for a particular situation. When all conditions are met, to the satisfaction of the lender, the loan is given final approval and a set of loan documents is prepared.
I will order a preliminary Title Commitment, which sets forth the status of the title of the property you want to buy, and review it with you to answer any questions you may have about it.
Escrow is a neutral third party the buyer and seller agree on to use to keep all the details of the home purchase on track. An escrow agent receives the set of loan documents from your lender and combines it with other documents prepared by the escrow company. The escrow company will arrange an appointment for you to sign all the necessary closing documents. At least three days before this signing appointment, you will be given a copy of the “Closing Disclosure” to review, so that you will know exactly how much money you will need to deliver to escrow by the signing appointment, typically by wired funds to the escrow company’s account or by a cashier’s check. The seller will be signing at a different time.
Click HERE to view an escrow diagram.
Closing and recording:
Once all documents are signed by both parties, the escrow company arranges for the deed of trust, and other necessary documents, to be recorded with the county in which the property is located. This usually occurs by the first or second business day after you signed your closing documents. When the recording is complete and the escrow company receives the recording numbers from the county, this constitutes formal ‘Closing’ of the transaction and is when escrow can distribute money to the appropriate parties. You can now receive the keys to your new home.
Congratulations! You are now a proud new homeowner.
Contact me anytime to learn more about the local home buying process.