The Real Estate Market in Orange County is HOT right now! The main reason is this, SUPPLY VS. DEMAND……There are a lot of home buyers in the market and not a whole lot of inventory. So as a home buyer in Orange County Real Estate, you must be prepared at all angles so you leave no stone unturn. In recent weeks I reviewed the First 3 Steps in the Home Buying Process and also Steps 4 thru 6 in the Home Buying Process. Today, I will review the final steps, 7 thru 10.
7. Conduct inspections & Review disclosures
Just because you love a particular property doesn’t mean that it’s perfect. In fact, this is where reason has to trump emotion. You’ll need to have a property inspection (which we highly recommend you attend) that will expose any hidden issues. This way you’ll know what you are getting into before you sign closing papers.
- Your main concern is the possibility of structural damage. This can come from water damage, shifting ground, or poor construction when the house was built.
- Don’t sweat the small stuff. It’s the inspector’s job to mark everything discovered no matter how large or small. The inspectors report may be long, but, things that are easily fixed can be overlooked for the time being.
- If you have a big problem show up in your inspection report, you should bring in a specialist and if the worst-case scenario turns out to be true, you might want to walk away from the purchase.
- Even if your home passes inspection, you’ll still need to buy a home owner’s insurance policy that protects you against loss or damage to the property itself and against liability in case someone sustains an injury while on your property.
8. Remove contingencies
Simply put, it means that you are now saying that the particular contingency you are removing or waiving is no longer a part of the contract. Though waiving and removing an item from a contract are technically different legally, in real estate the end result is usually identical – you can no longer use that particular contingency as a way to back out of the contract gracefully. After a buyer has released all the contingencies in the contract, the buyer is obligated to move forward with the purchase. If the buyer decides to cancel the contract, after signing a release of contingencies, the seller has the right to demand the buyer’s Earnest Money deposit and may be entitled to liquidated damages. In C.A.R. contracts, if the buyer does not sign a release of contingencies within the specified time period, it is up to the seller to demand that the buyer perform. If the seller does not demand performance, the contingencies stay in place and do not expire. Not all sellers demand performance, and many real estate agents neglect to monitor contingencies.
9. Sign loan documents
Once your loan has been approved and all prior to loan document conditions have been received and approved by the Lender, the Lender will prepare loan document and send them to escrow for signing. Escrow reviews the loan documents to comply with the Lender’s requirements and reviews the escrow file for any outstanding conditions. Escrow will prepare the buyer’s estimated HUD1/closing statement and put together any required paperwork needing the buyer’s signature. Escrowwill make arrangements for signatures on these papers. Escrow will prepare the seller’s estimated HUD1/closing statement and put together any required paperwork needing seller signature. Escrow will make arrangements for signatures on these papers. In some instances the Lender may have documents that may also need signatures from the listing agent, selling agent or loan agent, so escrow will also make arrangements for these items to be signed. If still needed, escrow will order insurance, closing protection letter, etc as required by the lender. Once the buyer’s loan documents have been signed and/or received back into escrow, escrow will package the documents to be returned to the funding Lender. This package of documents is referred to as the loan package. Ideally, by this time, all paperwork that has been sent for signature to the seller, listing agent, selling agent and loan agent have been signed and returned to escrow to include in this package. Lender’s work differently, and some will be prepared to fund the loan when they receive the loan package, others will require 24-72 hours after the loan package is received by the lender to review the package prior to advising if there are any additional requirements/conditions to fund the loan (this is the most common scenario we run across on the West Coast). Buyers are advised to understand the time frame associated with funding the loan from the lender that they are working with. This time frame is outside the control of escrow.
10. Close Escrow
Once you’ve made your offer and have completed the inspection process, you’re in the “home” stretch! But, in order to ensure that you don’t put your closing date, or your mortgage at risk, you have a few pre-closing responsibilities that you’ll need to be mindful of. These include:
- Staying in control of your credit and finances. If you are tempted to make any large purchases during this time, it’s best to talk to your lender first.
- Keeping in touch with your agent and lender, returning all phone calls and completing paperwork promptly.
- Communicating with your agent at least once or twice a week, and verifying with your lender that all mortgage funding steps are completed.
- Conducting a final walk-through of the home with your agent.
- Confirming with your agent, home insurance professional, and lender that you have the settlement statement, certified funds, and evidence of insurance lined up prior to closing.
What are your thoughts on steps 7-10 or any part of the Home Buying Process? Do you agree completely or would you do it a bit differently? Do you want your own copy of the Home Buyers Handbook? Then like this blog post below and request it in the comment box below: